In recent years highway revenues in Indiana have been eroding due to inflation, increased costs, and the increased use of fuel-efficient vehicles. It is necessary, therefore, to reliably assess the current and future needs for highway funding in order to facilitate informed fiscal planning. This study provides a methodology for tracking current and future demand for highway financing, along with a systematic modeling approach for revenue projections such that financing plans can be developed for state and local highway networks. Highway infrastructure needs for pavements, bridges, safety, and capacity improvements for the 15-year period between 2006 and 2020 are assessed for both state and local agencies. Needs are primarily determined on the basis of pavement and bridge conditions. Revenue projections are made using the current allocation and funding mechanisms. The study results indicate that the 15-year financing needs for the state highway agency are in the range of $30 billion (2002$) and the total expected revenue during the same period is $16.87 billion, creating a financing gap in the range of $0.86 to $0.89 billion per year. The local agencies will face a revenue gap in the range of $0.83 to $0.98 million annually during the same period.

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highway finance, highway need assessment, HERS-ST, funding gap, revenue forecasting methodology, state highway revenue, local highway revenue, motor fuel taxes, registration, SPR-2637

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Performing Organization

Joint Transportation Research Program

Publisher Place

West Lafayette, IN

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