About CDOT

Federal Funding Sources

Federal Funding Sources

Highway Trust Fund (HTF)
The federal Highway Trust Fund (HTF) was established upon Congress’ enactment of the Highway Revenue Act of 1956 to ensure a dependable source of revenue for a national highway network, today known as the Eisenhower Interstate Highway System.  Today, the HTF remains the primary source of funding for the federal-aid highway program.

Similar to other federal trust funds, the HTF is a financing mechanism established by federal law to account for tax receipts that are collected by the federal government for specific purposes. Originally the HTF was dedicated solely for highways, but later Congress determined that a portion of the highway tax revenues collected should be used for transit needs.  To that end, the HTF Mass Transit Account was created and became effective in 1983. Approximately one-fifth of the HTF is dedicated for transit purposes through the Mass Transit Account; the remaining four-fifths is expended for highway purposes.

The HTF is funded primarily by a federal fuel tax, which is currently 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel. Of the motor fuel taxes, the Mass Transit Account usually receives 2.86 cents per gallon.

Surface Transportation Authorization
Congress must provide permission for any federal funds to be expended from the Highway Trust Fund. Legislation referred to as a “transportation authorization” is the means by which this permission is granted. Each transportation authorization bill establishes national transportation policy, defines federal programs, outlines areas of emphasis for spending, and authorizes funding to the states. Transportation authorization legislation covers multiple years because transportation projects take a great deal of time from planning through construction. ISTEA, TEA-21, SAFETEA-LU, and the Moving Ahead for Progress in the 21st Century Act (MAP-21) are the most recent examples of transportation authorization bills enacted by Congress. Currently, MAP-21 is the most recent authorization and remains the current statutory framework governing federal transportation law and spending. MAP-21 sustains current funding levels for now. Funding for the current authorization is reliant on General Fund dollars which continue to prop up the HTF. MAP-21 also had provisions for continuation of the Federal Gas Tax ($0.184/gallon).

Donor vs. Donee Funding
A recurring debate at the federal level is the issue of states receiving back the same amount of funding, or more, than their citizens remit to the federal government through the federal gas tax. This concept is informally referred to as the “donor/donee” issue. “Donor States” pay more into the HTF than received back, whereas donee states—receive more back from the HTF than paid in. In recent years, as the HTF continues to rely on significant transfers from the federal General Fund, all states receive more back from the federal government than funds paid in. Under MAP-21, all states now have a minimum return guarantee, in which each state shall receive a minimum $0.95 return per dollar.

Annual Appropriations
The annual congressional appropriations legislation places yearly limits on the amount of federal funds that can be spent within the multiple-year transportation authorization legislation. Federal transportation dollars are appropriated through the Departments of Transportation and Housing and Urban Development Appropriations Act. This bill provides annual spending amounts for each of the federal highway and transit programs, as well as specific allocations to state departments of transportation. Federal dollars are delivered to state DOTs in three ways: formula or block grants; discretionary grants; and legislatively directed grants (also referred to informally as “earmarks”). 

  • Formula grants, also referred to as block grants are lump sum payments to the states according to a specific formula, usually accounting for factors such as population, lane-miles, or other variables. 
  • Discretionary grants are received when an entity submits and application and competes for a federal grant award. 
  • Legislatively directed grants, also referred to as “earmarks,” are no longer permitted under recent congressional changes.
CDOT at a Glance
  • * Maintains, repairs and plows over 23,000 total lane miles of highway
  • * Maintains 3,447 bridges
  • * Oversees 28 billion miles of vehicle travel annually
  • * Plows about 6 million lane miles each year
  • * Spends $69 million annually on snow removal
  • * Keeps over 35 mountains passes open year-round
  • * Monitors 278 of 522 avalanche paths
  • * Administers about $11 million in federal grants for transit operators and $41 million in federal aviation grants for airports
  • * Manages over $5 million in federal grants for safe driving programs
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