How much does the government spend on transportation and water infrastructure?
Since 1956, the majority of water and infrastructure spending has been by state and local governments.
Americans and their water have something in common: they both rely on infrastructure to get from Point A to Point B.
In 2023, infrastructure supporting transportation and water received $626 billion in funding from federal, state, and local governments, over three times more than 1956 spending levels (adjusted for inflation).
Transportation and water infrastructure spending tripled since 1956.
Public spending for transportation and water Infrastructure, 1956–2023 (adjusted to 2023 dollars)
Funding for water infrastructure pays for water treatment plants, transmission pipelines, reservoirs, tanks, and towers. Transportation supports highways, public transit, and air, water, and rail transportation. Their funding is reported together. Why? They’re both subcategories of basic infrastructure and are predominantly funded through the public sector. And both involve large, long-lived physical assets managed largely by governments, so they use similar methods to measure the value of the infrastructure and how it depreciates over time.
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Many infrastructure assets such as highways, water systems, sewers, and some transportation facilities are owned and funded primarily by state and local governments. Federal spending is concentrated in conservation and development — things like dams, levees, retaining walls, seawalls, and erosion control structures.
In 2023, state and local governments spent $494.2 billion on transportation and water infrastructure, 79.0% of spending. The federal government spent $131.6 billion, or 21.0%.
In 2023, nearly 80% of water and transportation spending came from state and local governments.
Public spending on transportation and water infrastructure, by level of government, 1956–2023 (adjusted to 2023 dollars)
Does funding support new or existing infrastructure?
Priorities have shifted over the past 70 years. Initially, more funding went to capital improvements, changes that upgrade an asset by improving its performance, increasing its capacity, or extending its useful life. Recently, more’s been spent on operation and maintenance: the routine, necessary activities like replacing worn out parts that are required to keep infrastructure functional. Operation and maintenance are necessities; capital improvements are choices.
From 1956 to 1980, capital improvement spending exceeded operation and maintenance spending. Between 1981 and 2005, both categories grew gradually, and the higher-funded category shifted from year to year. Starting in 2006, more funding went to maintenance than capital investments, a pattern that held through 2023.
Operation and maintenance received 31% more funding than capital improvements in 2023.
Public spending for capital improvements, and operation and maintenance of transportation and water infrastructure, 1956–2023 (adjusted to 2023 dollars)
Operation and maintenance spending peaked in 2020 at $360.4 billion and has been above $300 billion since 2007.
Capital improvement spending peaked in 2003 at $331.9 billion. Spending dropped below $300 billion in 2006 and has been relatively stable since then, ranging between $244 billion and $293 billion. In 2023, $270.8 billion went to capital improvements.
Which water and transportation segments get the most funding?
Spending in 2023 followed historical trends: highway spending got the largest segment of transportation and water infrastructure spending: $249.2 billion, around 40% of highway spending. The next-largest segment, water utilities, got 28% of total spending.
Following those were mass transit and rail (16% of the total), aviation (8%), water resources (6%), and water transportation (2%).
Highways receive the highest share of water and transportation spending.
Public spending for transportation and water Infrastructure, by type of infrastructure, 1956–2023 (adjusted to 2023 dollars)
Where does this data come from?
Where does this data come from?
The Congressional Budget Office (CBO) is a nonpartisan federal agency created by the Congressional Budget Act of 1974 to provide objective budget and economic analysis to Congress. It serves all Congressional committees, with a primary responsibility to support the Budget Committees. CBO does not make policy recommendations.
Their report, “Public Spending on Transportation and Water Infrastructure,” is regularly updated and published by CBO, although it is not updated yearly. The most recent edition was released in 2023, and it has been published four other times: 2007, 2010, 2015, and 2018. The report uses data from the Office of Management and Budget, the Census Bureau, and the Bureau of Economic Analysis.
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