Government funding for highways in the US - Data and Analysis (1980-2032)

In 2026, government funding for highways in the United States is estimated at $244.2 billion, marking an increase of 0.9% from the previous year. The current year marks the final year of authorization under the Infrastructure Investment and Jobs Act, and state transportation departments are working to obligate remaining formula and advance appropriated funds before authority lapses at the end of September, keeping outlays elevated. Persistent growth in vehicle registrations and total miles driven continues to strain the road network, encouraging federal and state governments to sustain maintenance and construction budgets. A cooling in highway construction cost inflation, which had surged through the middle of the period, is allowing each dollar to purchase more physical work than in recent years. Even so, elevated tariffs on steel, aluminum and copper are lifting material costs, while uncertainty over the shape of the next surface transportation bill is discouraging new long-term commitments.Government funding for highways has climbed over the past five years, although real gains have been far smaller than headline spending totals imply. The Infrastructure Investment and Jobs Act, alongside the advance appropriations it carried, delivered the largest sustained increase in federal road funding in a generation and underwrote a deep pipeline of state projects. Pandemic-era disruption immediately before the period set a low base, as collapsing traffic volumes gutted fuel tax and toll receipts and prompted emergency federal relief for state transportation departments to keep projects moving.The dominant story of the period has been cost inflation. The Federal Highway Administration's construction cost index accelerated sharply from 2021 and peaked in 2025, eroding a large share of the purchasing power of federal highway dollars and forcing states to rescope or defer projects. Tariff actions on metals in 2025 compounded pressure on bridge and paving inputs. As a result, real funding growth has lagged nominal appropriations and has failed to keep pace with the wider economy, leaving a persistent gap between assessed infrastructure needs and committed resources.Funding has also become structurally more dependent on general revenue. The federal fuel tax has not changed since 1993, and improving fuel economy alongside rising electric vehicle penetration has pushed Highway Trust Fund receipts well below outlays, requiring repeated Treasury transfers. States have responded by indexing fuel taxes to inflation, introducing or raising electric vehicle registration fees and issuing record volumes of municipal debt. Growth in state tax receipts, supported by rising incomes, consumer spending and population, provided a solid base early in the period but moderated as revenue settled into a slower post-pandemic trend. Federal policy churn added volatility, with funding pauses and grant conditions imposed in 2025 subsequently vacated in court.