FEDERAL TRANSPORTATION FUNDING IN IOWA
Information on this web page was last updated in December 2016.
Each year in Iowa, a wide range of transportation improvements and operations are carried out by state and local government. Examples include constructing, maintaining and improving highways; improving airports, waterways, and railroads; enhancing aviation, rail, and transit services; and supporting motor carrier safety and enforcement. These activities are funded with a combination of local, state and federal dollars.
Sources of funds
Most federal funds returned to state and local governments come from modal trust funds made up of various federal user fees. Many programs also receive a small percentage from the federal General Fund.
Federal transportation trust fund
Most “federal” transportation funds are actually dollars returned to state and local governments via modal trust funds made up of various federal user fees. Many programs also receive a smaller amount from the federal General Fund.
Federal tax revenue deposited into federal transportation trust funds
FY 2014 - latest available comprehensive data
||Total FY 2014 receipts
|Highway Trust Fund:
- Highway account
- Mass transit account
|Airport and Airways Trust Fund
||$ 13.5 billion
|Inland Waterways Trust Fund
||$ 0.8 billion
Highway Trust Fund
The largest of the transportation trust funds was established in 1956 to ensure a steady flow of money to support the construction of the nation's interstate system. The Highway Trust Fund (HTF) and user fees have been continued and now support a wide range of transportation programs. User fees include fuel taxes, heavy vehicle use taxes, and retail taxes on purchases of trucks and truck tires. More than ninety percent of the revenue to the HTF comes from fuel taxes. HTF receipts are credited to two accounts: the highway account and the mass transit account. In FY 2014 Iowa contributed $468 million to the highway account (1.37 percent of total national receipts) and $77 million to the mass transit account (1.37 percent of total national receipts).
In addition to the construction, maintenance and improvement of the system of federal-aid highways, the highway account funds a wide range of motor carrier safety and enforcement programs, along with highway-railroad grade crossing programs. The mass transit account provides funds for the construction and operation of bus and rail transit systems.
In recent years, increased fuel efficiency, less driving and other factors have significantly slowed the revenue stream going into the HTF. At the same time, inflation has eroded its buying power and investment levels have increased. The result is a significant HTF deficit, with shortfalls avoided in recent years only with substantial general fund transfers. The most recent, $70.3 billion beginning in December 2015, is expected to generally carry the trust fund through FY 2020, when the current authorization bill, the FAST Act, expires.
Airport and Airways Trust Fund
Revenue to support Federal Aviation Administration programs comes from the Airport and Airway Trust Fund. This fund is generated by passenger ticket taxes, segment taxes, freight taxes, and fuel taxes. Taxes paid by passengers account for nearly seventy percent of revenues; the aviation fuel tax contributes five percent, freight waybills account for four percent, and the international enplanement tax contributes twenty-one percent.
Inland Waterway Trust Fund
The smallest of the transportation trust funds is the Inland Waterways Trust Fund. A tax on barge diesel fuel is the only revenue source for this fund. These funds provide 50 percent of the cost of major capital improvements on the inland waterway system.