Transportation funding shortfalls have been in a near constant state of crisis for more than a decade. State legislatures, left hanging by declining assistance from the federal government and  higher costs of road construction and maintenance, have responded emphatically and creatively in their approaches to create new transportation revenue streams.

States have enacted and implemented increased gas taxes, indexed those gas taxes to an economic indicator such as CPI, created new tolling programs, enhanced vehicle registration fees and undertaken efforts to “lock-box” transportation revenues solely for transportation purposes. States are also pioneering new approaches to fund and finance needed transportation investment, such as studying and creating road usage charging programs, enacting fees on electric and hybrid vehicles and utilizing public-private partnerships for large transportation capital projects.

States face three big hurdles to repairing faulty bridges, maintaining roads, building new transit lines and maintaining existing infrastructure so it remains safe and efficient.

First. When it comes to fuel efficiency, the cars Americans drive today are drastically different than they were a decade ago. National fuel economy standards were 27.5 miles per gallon in 1982, 30.2 MPG in 2011, 37.7 MPG in 2019 and will go up to 49.7 MPG by 2026 for passenger vehicles and light-duty trucks, according to the final rule published by the Environmental Protection Agency and the National Highway Traffic Safety Administration in 2012.

According to a 2018 report by the Iowa Department of Transportation studying the impact of electric vehicles to highway funding, “Even the most cautious forecasts of long term EV growth estimate EV market share to grow beyond 10% of the total light duty fleet.” A 2018 report by the Edison Electric Institute projected electric vehicle sales to exceed 3.5 million in 2030 and more than 20 percent of annual vehicle sales.

Second. Americans’ transportation habits are changing, and further disruption may be approaching. New mobility options continue to roll out at a dizzying pace. Uber, Lyft and other shared transportation services continue expanding throughout the U.S. Telecommuting rates are on the rise, keeping people plugged in remotely (and out of their cars). Baby boomers, the generation that loves driving the most, are reaching the age where they just don’t do it as much. Urban centers are being flooded with electric bicycles and scooters, shifting how urban Americans get from point A to point B. As technology continues rapidly advancing, the deployment of autonomous vehicles will undoubtedly alter travel and commuting patterns.

Third. In 2015, Congress finally passed a long-term transportation funding bill for the first time since 2005 (Read  NCSL’s FAST Act summary). Each year approximately $45 billion is sent to states for highway projects and another $10 billion to states and transit agencies for transit. Because the federal share often goes to capital projects, this has forced states to come to grips with a growing maintenance backlog. While there is wide support from states and industry for a renewed long-term federal investment in all types of transportation infrastructure, the FAST Act will expire in 2020. A long-term reauthorization is not assured.