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.
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 spend 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 2012 authorization bill – known as the “Moving Ahead for the Progress in the 21st Century, or MAP-21 — allows the federal government to invest in highways, bridges and mass transit. MAP-21 is scheduled to expire at the end of October 2015.
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.