New GAO Report: All States are “Donees” When it Comes to Highways

You’ve probably heard some grumbling or chuckling — depending on where you live — about the way federal highway funds are distributed to states.

And it’s true that for quite some time, the country was divided into “donor” and “donee” states, each group either contributing more revenue than they received from the Federal-Aid Highway Program or vice versa.

But that is no longer the case, according to a new report from the Government Accountability Office. Between 2005 and 2009 every state in the union received more Federal-Aid Highway dollars than it contributed through fuel taxes and other fees.

But while that might sound great, the truth is it’s bad news no matter where you live. This was only possible because the roughly $200 billion in Federal-Aid spending over that time period included $30 billion from the general fund — a trend that presents some rather obvious sustainability concerns, to say nothing of equity for non-drivers.

“A significant amount of highway funding is no longer provided by highway users,” GOA stated in the report.

Discrepancies in “rate-of-return” were also mitigated by the 2005 SAFETEA-LU which offered an “equity bonus” to donor states. The program guaranteed a minimum return to states, resulting in a higher rate-of-return for all states, and as much as a 25 percent increase for some.

That doesn’t mean funding discrepancies have been eliminated, as the map above illustrates.