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Transportation Funding & Financing

Local Funding

Revenue from local government plays an important role in transportation finance. It provides about 36 percent of surface transportation funding in the U.S. and is expected to play an increasingly significant role as declining Federal and state budgets require local governments to spend more of their own dollars on roads and streets under their jurisdiction.

General fund appropriations represent the largest single source of local funding. The use of property taxes also distinguishes local transportation funding from that of the Federal and state governments. Other broadly collected taxes, such as hotel or rental car taxes may also be directed to transportation.

An increasing number of local county and municipal governments are making the decision to enact new taxes to generate revenue for transportation needs. These often require local referenda and result in increases to the local sales tax, which can be leveraged in the municipal bond market. A range of value capture techniques, including for example, tax increments and development exactions, also highlight local governments' attempts to direct non-traditional revenue to transportation improvements. Local debt initiatives have also seen greater use.


Local Motor Fuel Taxes
Local Motor Vehicle Registration Fees
Local Option Sales Taxes
Local Income/Payroll/Employer Taxes
Local Severance Taxes
Value Capture