Federal transportation funding in Iowa

Information on this Web page was last updated in March 2013.


Transportation programs in Iowa are funded with a combination of local, state and federal dollars. This funding pays for a wide range of transportation improvements and operations for all transportation modes. Examples include constructing, maintaining and improving highways; improving airports, waterways and railroads; enhancing aviation, rail and transit services; and supporting motor carrier safety and enforcement activities.

Sources of funds

Most federal funds returned to state and local governments come from modal trust funds made up of various federal user fees. Many programs also receive a small percentage from the federal General Fund.

Federal transportation trust fund
  Total FY 2011 receipts Total FY 2012 receipts
Highway Trust Fund:
- Highway Account
- Mass Transit Account
$36.90 billion
-$ 31.98 billion
-$ 4.92 billion
$40.17 billion
-$ 35.17 billion
-$ 5 billion
Airport and Airways Trust Fund $ 11.7 billion $ 12.7 billion
Inland Waterways Trust Fund $ 0.84 billion $ 0.89 billion

Highway Trust Fund

The largest of the transportation trust funds was established in 1956 to ensure a steady flow of money to support the construction of the nation's interstate system. The Highway Trust Fund (HTF) and user fees have been continued and now support a wide range of transportation programs. User fees include fuel taxes, heavy vehicle use taxes, and retail taxes on purchases of trucks and truck tires. More than 90 percent of the revenue to the HTF comes from fuel taxes. HTF receipts are credited to two accounts: the highway account and the mass transit account. In 2012 (latest available) Iowa contributed $499.2 million to the highway account and $65.8 million to the mass transit account. This represents 1.42 percent and 1.31 percent, respectively, of the total receipts.

In addition to the construction, maintenance and improvement of the system of federal-aid highways, the highway account funds a wide range of motor carrier safety and enforcement programs, along with highway-railroad grade crossing programs. The mass transit account provides funds for the construction and operation of bus and rail transit systems.

Airport and Airways Trust Fund

Revenue to support Federal Aviation Administration programs comes from the Airport and Airways Trust Fund. This fund is generated by passenger ticket taxes, segment taxes, freight taxes, and fuel taxes. Taxes paid by passengers account for nearly 70 percent of revenues; the aviation fuel tax contributes 5 percent, freight waybills account for 4 percent, and the international enplanement tax contributes 21 percent.

Inland Waterway Trust Fund

The smallest of the transportation trust funds is the Inland Waterways Trust Fund. A tax on barge diesel fuel is the only revenue source for this fund. These funds provide 50 percent of the cost of major capital improvements on the inland waterway system.


Congress must give permission for federal funds to be expended. Transportation authorization legislation is the mechanism by which this permission is granted. Authorization legislation establishes transportation policy and areas of emphasis for spending by creating and defining programs and authorizing funding. The funding mechanism, including the various user fees, is established. Authorization legislation covers multiple years because transportation projects require a long time from planning through construction.

Surface transportation

The current multiyear surface transportation authorization act, Moving Ahead for Progress in the 21st Century (MAP-21), was passed June 29, 2012, and signed on July 6, 2012 (Pub. Law 112-141). In general, MAP-21 maintains FY 2012 investment levels for 27 months, until Sept. 30, 2014, with a small increase for inflation in FY 2014. These investment levels were made possible by supplementing Highway Trust Fund revenue with: an $18.8 billion transfer from the General Fund (offset by corporate pension changes) and transfer of the $2.4 billion balance of the Leaking Underground Storage Tank Fund.


On Feb. 14, 2012, the President signed a bill reauthorizing federal aviation programs and funding for four years. HR 658 provides $64 billion, including $13.4 billion for the Airport Improvement Program ($3.35 billion per year, a slight decrease from previous years).


An FY 2013 continuing resolution/appropriations bill was passed on March 21, 2013. For transportation, most highway, transit and safety program funding is increased to the levels authorized in MAP-21. Highway formula funding is set at $39.7 billion, a 1.4 percent over FY 2012. Transit formula and capital projects funding is set at $8.5 billion, a 1.6 percent increase over FY 2012. No funds were provided for discretionary surface transportation projects.

Distribution of funds

Most federal funds are distributed to state and local officials based on formulas. For example, Iowa receives funds to maintain the interstate system based on our share of the nation's interstate vehicle miles traveled and interstate lane miles, while we receive funds for urban planning based on our share of the nation's urban population. Funds for improving our airports are based on the number of passengers, population, and geographic area of the state; and a portion of the five-year capital improvement plan for general aviation airports. Transit funding is based in part on transit ridership. These formula funds are called apportionments. Other programs have no mandatory distribution formula, so distribution is based on competitive applications or another project selection process. These funds are called allocations. In general, as a condition of receiving federal funding the state or local jurisdiction is required to provide matching dollars. The most common matching requirement is 20 percent, but it can be as low as 0 percent or as high as 50 percent.

Transportation funding for Iowa

The following table identifies the level of FY 2011 and FY 2012 funding received by Iowa for some state and local projects and activities.

FY 2011 federal transportation funding to Iowa
  FY 2011 FY 2012
  Iowa total Percent of national Iowa total Percent of national
Highway projects $480.7 million 1.15 $460.9 million 1.16
Transit projects $52.3 million 0.53 $51.43 million 0.49
Airport Improvement Program $41.2 million 1.17 $62.6 million 1.19


For additional information, please contact the Iowa DOT's Office of Policy and Legislative Services at 515-233-7964 or, for specific funding program information, review the Iowa DOT's Funding Guide.