From KUT News:
Texas boasts a sprawling highway network with more than 200,000 miles of lanes — almost the distance from Earth to the moon.
Those roads aren’t cheap. The Texas Department of Transportation (TxDOT) outspends every other state, devoting more than $18 billion to highways in 2022 alone, according to Federal Highway Administration data.
As the Texas population expands, so do the state’s freeways. In the last decade, Texas has added at least 700 miles of new highway. Now, a decade-long project has begun to widen I-35 through Austin.
Ever wonder who foots the bill?
The money for highways comes from a mix of gas taxes, vehicle registration fees, state sales taxes, levies on oil and gas companies and federal funds — which includes a big chunk of money from personal income taxes.
Then there are the hidden costs of highways: polluted air, traffic congestion, the risk of being hurt or killed in a crash, government-seized property, forced relocations and increased greenhouse gas emissions.
User-pay ‘needs to be thrown out the window’
When the interstate system of criss-crossing superhighways was built in the 1950s, drivers were expected to cover the construction costs. A gasoline tax was funneled into a government account called the Highway Trust Fund. The fund generously shoveled out cash, offering states $9 for every $1 they invested in interstate construction.

I-35 at U.S. 290 in 1959. The Federal-Aid Highway Act passed by Congress in 1956 devoted $25 billion — $291 billion in today’s dollars — to construct a 41,000-mile interstate highway system.
TxDOT / TexasFreeway.com
Since then, the federal funding ratio has become less generous. Texas now gets only about a third of its highway money from the U.S. government, equating to nearly $6 billion this year — still a significant chunk of the $50 billion the U.S. government spends on freeways each year.
One challenge is the Highway Trust Fund keeps running out of money. The federal gas tax — now 18.4 cents a gallon — hasn’t risen since President Bill Clinton’s first year in office. The Texas gas tax is even older, frozen at 20 cents a gallon since 1991.
So for the past two decades, Congress has pumped other money to the Highway Trust Fund to make up the difference. The single biggest infusion was in 2021: a $118 billionbailout from the Infrastructure Investment and Jobs Act.
“There’s this big change that has happened when it comes to this ‘user pay’ concept, which basically needs to be thrown out the window,” said Robert Puentes of the Eno Center for Transportation, a century-old nonprofit think tank based in Washington, D.C.
“It’s not like it’s a free market that’s operating,” he said.
Still, while the Federal Highway Administration (FHWA) reports some data publicly, it’s hard to pin down the exact spending details — even for an expert like Puentes, who has been researching the topic for decades.
“Projects take a long time to be constructed, and so it’s very opaque, and it’s very frustrating because there’s not an easy way nationally to figure out where this money is going,” he said.

Since 1993, the federal gasoline tax has remained unchanged at 18.4 cents per gallon. The state gas tax has held steady at 20 cents a gallon since 1991.
Alyssa Olvera / KUT News
Federal cash covers 35% of TxDOT’s budget. The money comes not just from gas taxes, but also directly from the Treasury’s general fund, which is primarily funded by individual income taxes.
Where does TxDOT find the remaining 65%? The short answer is a blend of taxes and fees, most of which are required by the state constitution to be spent on roads.
So drivers directly pay for about a quarter of TxDOT’s budget through gas taxes and vehicle registration fees funneled through the State Highway Fund.
Starting in 2023, that includes an annual $200 fee on electric vehicles, whose owners don’t pay gas taxes. An official analysis predicted the new fee would earn the State Highway Fund more than $340 million a year by 2028. But that forecast will depend entirely on the rate of EV adoption.

Owners of electric vehicles in Texas must now pay a $200 registration fee each year, money intended to recoup lost gas taxes.
Gabriel C. Pérez / KUT News
With the state gas tax frozen at 1991 levels, Texas lawmakers went looking for new ways to pay for highways. About a decade ago, legislators asked voters to amend the Texas constitution so other streams of revenue could be committed to building, expanding and maintaining the state’s roads.
In 2014, Texas voters obliged, agreeing overwhelmingly to siphon a portion of the money sent to the state’s Rainy Day Fund — a bank account for emergencies funded by taxes on oil and natural gas producers — and dedicate the revenue to roads instead. Proposition 1 now generates more than $3 billion a year for the State Highway Fund.
The next year, a second constitutional amendment won by an even wider margin. Proposition 7 devoted part of the state’s 6.25% sales tax to roads, up to $2.5 billion a year.
Money dedicated by the two constitutional amendments pays for more than a third of the state’s highway spending.
“It makes up such a large chunk now that if we were not to have it, it would probably devastate the plans we have,” said Brianne Glover, a research scientist who leads policy analysis at the Texas Transportation Institute — a state-funded research agency at Texas A&M University. “It’s something we would definitely feel.”