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Transportation Funding Sources

Funding is an integral part of transportation programming. On average, Pima Association of Governments receives about $20 million per year from the Federal Highway Administration (FHWA) and $22 million from the state Highway User Revenue Fund (HURF). Most of the funds received are from federal and state motor fuel taxes.

Federal Funds
As the federal designated MPO, PAG receives Federal Highway Administration (FHWA) funds that are made available to PAG member jurisdictions for transportation projects. On average, PAG receives approximately $17 million of Surface Transportation Program (STP) funds. The program is a flexible funding source that can be used on a variety of transportation projects. In addition to STP funds, PAG also receives approximately $1 million each for safety projects (Highway Safety Improvement Program), bike/ped programs and infrastructure projects (Transportation Alternatives), and FHWA and state planning funds. An additional $5 million of federal funds are indirectly distributed from the Arizona Department of Transportation (ADOT) to PAG through ADOT subprograms, such as bridge inspection or safety programs. For the most part, federal funds must be used on federal designated roads. (A portion of the STP may be exchanged for transit funding).

State Highway User Revenue Fund (HURF)
State statute provides PAG with a share of the state Highway User Revenue Fund. On average, PAG receives approximately $22 million per year, from two different HURF funding sources: HURF 12.6% and HURF 2.6%. The HURF 2.6% account, which consists of roughly one-fifth of the HURF amount received, must be spent on state-owned facilities. The HURF consists of state-collected fuel taxes and other user fees, such as operator's licenses, vehicle registration and taxes assessed on commercial trucks. Highway User Revenue Funds are made available to PAG member jurisdictions for transportation projects and must be used for streets and roads within the region.

Transportation Revenue Forecasts
In 2002, PAG developed a model to assist in forecasting regional transportation funds. Because population is a key factor in transportation funding distribution, the model incorporates the latest U.S. census data and the Arizona Department of Economic Security's (DES) population forecasts for the state and region. The model also can estimate funding distributions based on legislative changes. As bills are introduced that may impact transportation funding, features of a bill or budget plan can be incorporated into the model forecasts.

Federal fund forecasts are based on multi-year transportation bills. Historical values from prior federal legislation are used to develop forecasting trends. The model also has the capability to run various federal scenarios and compare proposed changes on the federal level.






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