The N.C. Department of Transportation has an annual operating budget of nearly $4 billion. This money comes from three primary sources: the Highway Fund, the Highway Trust Fund and federal funds. The following pie charts illustrate the sources and uses of these funds.

The Highway Fund

The Highway Fund dates back to 1921, when the North Carolina General Assembly first imposed the gasoline tax of .01 cents per gallon on all motor vehicles fuels sold or distributed in the state. Revenue for the Highway Fund comes from a variety of sources, including the state gas tax, motor vehicle registration fees, title fees and federal-aid appropriations. Traditionally, the Highway Fund has supported highway construction and maintenance, the State Highway Patrol and the Division of Motor Vehicles. In the 1990s, the fund also began supporting public transportation and rail programs.

The Highway Trust Fund

The Highway Trust Fund law was enacted in 1989 and identifies specific highways that will be four-laned or improved in order to complete a 3,600-mile intrastate system. In addition, the law provides funding for urban loops around seven of our largest cities, including Asheville, Charlotte, Durham, Fayetteville, Greensboro, Greenville, Wilmington and Winston-Salem. This fund also provides money to complete the paving of most of the state's secondary roads as part of the Secondary Road Improvement Program and provides extra money for the state's cities and towns to adequately maintain their streets through the Powell Bill Fund.

Federal Funds

Additional funds come from federal highway dollars, General Fund dollars and other federal funds that go towards transit, rail and airports.

The Gas Tax

The gas tax tax is an amount levied on each gallon of gasoline and diesel sold in North Carolina. The state gas tax is currently capped at 29.9 cents per gallon; the federal tax is 18.4 cents per gallon. Motorists pay these taxes at the gas pump.

The Equity Formula

The equity formula was created in 1989 by the General Assembly. It requires that State Transportation Improvement Program funds be distributed equitably among regions of the state. Monetary distribution is based 50 percent on the population of a region, 25 percent on the number of miles of intrastate highways left to complete in a region and the remaining 25 percent is distributed equally among the regions for the STIP. Urban loop, congestion mitigation and air quality funds, and competitive/discretionary federal grants are exempt from the formula.