Wisconsin Transportation Builders Association

Federal Funding

Federal Funding

Federal funds account for approximately 25% of Wisconsin’s annual transportation budget, with the vast majority invested in highway and bridge capital improvements.


The vast majority of federal funding is generated by the federal fuel tax, which is 18.3 cents per gallon on gasoline and 24.4 cents per gallon for diesel fuel.  Other sources of revenue include a 12% truck sales tax paid by retailers, a heavy truck use tax paid by vehicle owners and a truck tire tax paid by manufacturers.


The federal fuel tax has not increased since 1993, allowing inflation to reduce the buying power of those revenues by more than 30%:

Proceeds from the federal fuel tax are deposited in the Highway Trust Fund, which consists of two accounts – a Highway Account and a Mass Transit Account.  Here is how those revenues are divided between the two accounts:


Gasoline:         15.44 cents – Highway Account

                        2.86 cents – Mass Transit Account

                        18.3 cents – Highway Trust Fund


Diesel:            21.44 cents – Highway Account

                        2.86 cents – Mass Transit Account

                        24.3 cents – Highway Trust Fund


Distribution of federal funding is governed by a two-step process:  Authorization and Appropriation.


Authorization is the process by which Congress and the President allow the federal government to collect taxes and spent it for a specific purpose.  These are normally multi-year bills that establish program policies, funding formulas and annual spending caps for individual programs.  For example, the 2005 authorization bill – known as the “Safe, Accountable, Flexible, Efficient Transportation Equity Act:  A Legacy for Users” (SAFETEA-LU, “Safety-Lou”) – allows the federal government to invest in highways, bridges and mass transit until 2009, when the program must be “reauthorized.”


Appropriation is the process by which Congress and the President pass annual spending bills for discretionary programs for the federal fiscal year, which runs from Oct. 1 to Sept. 30.  The President introduces an executive budget proposal for the upcoming fiscal year in February, after which the House and Senate must pass identical versions of the bills before submitting them to the President to be signed into law or vetoed.  A program must first be authorized in order to receive an appropriation.


Useful Links:


The Federal Budget Process

U.S. Department of Transportation

Federal Highway Administration

House Transportation & Infrastructure Committee

Senate Environment & Public Works Committee

House Appropriations Committee

Senate Appropriations Committee