TEA establishes an Infrastructure Bank and Infrastructure Financing, which extends either loans or a credit line to be repaid by project revenues. The definition of transit urban aid funds has been broadened to include preventive maintenance while the cap on their use for operations has been lowered. Federal funds flow from the FHWA to state DOTs and from the FTA to transit operators in response to annual requests from the state agencies. Actual funding levels have been subject to annual appropriations by Congress. Capital funds are typically leveraged by the states as backing for bonds which generate an up-front infusion of secure financing of long term projects.
Federal funds represent only a portion of total transportation funding on a state level.
State funding, from vehicle-related taxes, tolls and general revenues, is matched by local contributions, generated by property and sales taxes and parking fees and fines. Sources of state transportation funds Each of the three states in the New York region have a dedicated source of transportation funds, generated primarily by state petrol taxes and motor-vehicle related fees. Except for Connecticut, tolls are an important source of revenues. However, the levels of taxation are quite different, as are the sources and reliability of supplemental funds. Off-peak discounts for trucks are being proposed.