Myth Busted: Road Costs Not Covered by Gas Taxes

Media Contacts
Sonia Ashe


Des Moines, IA – A new report released today by the Iowa Public Interest Research Group disproves the common misperception that road building is paid for by user fees. The report, ‘Do Roads Pay for Themselves?’ finds that gas taxes cover barely half the costs of building and maintaining roads, and can be expected to cover an increasingly smaller percentage over time.

Among the findings of the report:

• Federal gasoline taxes were originally intended for debt relief, not roads.
• Highways, roads and streets have received more than $600 billion in subsidies over the last 63 years in excess of the amount raised through gasoline taxes.
• The amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes. Drivers pay gasoline taxes for the miles they drive on local streets and roads, even though those proceeds are typically used to pay for state and federal highways.
• Iowa’s gas taxes are partly offset by subsidies that exempt gasoline from sales taxes.

“Here in Iowa our state gas taxes can only be spent on highways. The road lobby promotes the idea that highways therefore pay for themselves, but the truth is that general taxes still massively subsidize our roads,” said Sonia Ashe of Iowa PIRG, “By earmarking those transportation funds based on false premises, our tax dollars don’t necessarily go where the needs and benefits are greatest.” Currently, many rural communities in Iowa have been forced to abandon road pavement projects due to lack of funding.

We have also heard from Governor Branstad that the question of funding for a high‐speed rail that is projected to bring more than 800 jobs to Iowa is still up in the air. This year, Congress will address funding for the nation’s Highway Trust Fund again, which has been bailed out four times with $35 billion from general funds since 2008.

Federal gas taxes have not increased since 1993 and revenues are expected to remain flat as Americans continue to drive less and use more fuel‐efficient cars. “Highway advocates often wrongly portray highway spending as financially conservative by falsely portraying gas taxes as “user fees” that pay for roads,” said Ashe. “It’s time to have some difficult debates about how we pay for transportation, and what our transportation goals are for the future.”

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Iowa PIRG is a statewide, non-profit, non-partisan public interest advocacy organization. For more information visit

staff | TPIN

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