DECADES
WHAT THE TRENDS TELL US

Transportation

Declining Highway User Revenue Fund
By Kristin Borns
Senior Analyst
Morrison Institute for Public Policy
Arizona State University

Q: What were the most interesting and important trends in Arizona transportation that occurred
in the previous decade? What is the significance of these trends and what insights can we apply to
the new decade?

A: While the pace of growth has slowed, Arizona’s infrastructure needs will continue to

increase in the coming decade. One of the primary sources of transportation funding is the
Highway User Revenue Fund (HURF), a state fund administered by the Arizona Department
of Transportation (ADOT), which is rapidly declining in available dollars. While annual fund
growth was relatively healthy during boom times, the economic recession has exposed HURF’s
vulnerability to business cycle fluctuations.
HURF is funded largely by gasoline taxes, as well as motor carrier fees and vehicle licensing fees.
Just like state revenues across the board, the down economy has had a direct impact on HURF.
As more Arizonans are out of work, less commute miles translates to less gasoline purchased.
Additionally, a general reduction in spending impacted all household categories, including
gasoline purchases. Other components of HURF, including registration and licensing fees, also
took a hit as fewer Arizona families spent money on big purchases like new vehicles. Additionally,
the gasoline tax has remained constant at a flat $0.18 per gallon since 1991, not keeping up with
inflation or rising fuel costs. This is a problem that will persist even as the economy makes a slow
come back.

Percent Change

The fund’s balance was down 7% between fiscal year 2008 and 2009 and was 10% below
projected revenue. According to ADOT, the recently closed fiscal year was the worst performance
for HURF on record and
Percent Change in the Arizona Highway User Revenue Fund Balance
the first time there were
Last Updated: 2/8/2011
two straight years of
10%
negative growth. As Arizona
moves forward, we need
to determine if we want
5%
to augment these dollars,
and if so, how to best do
it. In addition to simply
0%
maintaining the status quo,
options include increasing
the amount of gasoline tax
-5%
collected, increasing the sales
tax to provide dedicated
funding, or entering into
-10%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
public-private partnerships to
build toll roads.
Source: Highway User Revenue Fund Fiscal Year 2010 Year-End Report

ARIZONA
INDICATORS

DECADES
VOLUME 1 / ISSUE 8
JANUARY 2010
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