Federal transportation funding in Iowa

Information on this web page was last updated in January 2015.


Each year in Iowa, a wide range of transportation improvements and operations are carried out by state and local government. 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. These activities are funded with a combination of local, state and federal dollars.

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 2012 receipts Total FY 2013 receipts
Highway Trust Fund:
- Highway account
- Mass transit account
$40.17 billion
($ 35.17 billion)
($ 5 billion)
$36.47 billion
($ 31.82 billion)
($ 4.65 billion)
Airport and Airways Trust Fund $ 12.7 billion $ 12.85 billion
Inland Waterways Trust Fund $ 0.89 billion $ 0.85 billion
*Estimate in the 26th Annual Report by the Inland Waterways Users Board. No FY 2013 actuals were provided.

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 2013 (latest available), Iowa contributed $438.7 million to the highway account and $59.2 million to the mass transit account. This represents 1.38 percent and 1.27 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.

In recent years, increased fuel efficiency, fewer miles driven, and other factors have significantly slowed the revenue stream going into the HTF. At the same time, inflation has eroded its buying power and investment levels have increased. The result is a significant HTF deficit, with shortfalls avoided in recent years only with significant general fund transfers. The most recent, $10.8 billion in August 2014, is expected to carry the trust fund only to late summer or early fall in 2015.

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 maintained FY 2012 investment levels until Sept. 30, 2014, with a small increase for inflation in FY 2014. The FY 2014 levels were then extended by legislation passed in August 2014 (Pub. Law 113-159). As mentioned above, these investment levels have been made possible by supplementing Highway Trust Fund revenue with transfers from the General Fund (offset by corporate pension changes and other provisions) and the Leaking Underground Storage Tank Fund.


On Feb. 14, 2012, the president signed a bill reauthorizing federal aviation programs and funding until Sept. 30, 2015. Public Law 112-95 provides $64 billion, including $13.4 billion for the Airport Improvement Program ($3.35 billion per year, a slight decrease from previous years).


On Dec. 16, 2014, the president signed HR 83 (Pub. Law 113-235) providing funding through Sept. 30, 2015 for the US DOT and most other federal agencies. Formula obligation limitation was set at authorized levels (same as FY 2014) - $40.256 billion for highways, $8.595 billion for transit and $3.35 billion for the Airport Improvement Program. Also included was $500 million for the discretionary TIGER program for FY 2015.

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 the state’s share of the nation's interstate vehicle miles traveled and interstate lane miles, while urban planning funds are 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 twenty percent, but it can be as low as zero percent or as high as 50 percent.

Transportation funding for Iowa

The following table identifies the level of FY 2013 and FY 2014 formula funding received by Iowa for state and local projects and activities.

Federal transportation dollars flowing to Iowa through formula programs
  FY 2013 FY 2014
  Iowa total Percent of national Iowa total Percent of national
Highway projects $467 million 1.12 $485.5 million 1.13
Transit projects $37.4 million 0.36 $39.9 million 0.37
Airport Improvement Program $50 million 1.68 $24 million 0.75


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.