University of California Transportation Center

A complex partnership between many governmental bodies, continually influenced by numerous private, corporate, and civic interests, finances our nation’s transportation system. But the nature of the partnership is changing. Originally offset by a variety of user fees, such as tolls and fuel taxes, the burden of financing transportation programs is gradually being shifted to local governments and voter-approved initiatives. This shift to local transportation taxes raises interesting issues for public policy. This brief dissects the arcane and complicated system of transportation funding by describing the relationships that define the federal,state and local roles. It summarizes the most pressing problems facing the transportation network, and argues that expanded reliance on user fees remains the most promising way to promote equity and efficiency in transportation finance.