On the state and community level, the major sources of funding transport infrastructure
investments are public budgets. The states receive major parts of their budget through tax
transfers from the federal institutions.
For example, vehicle taxes and part of the VAT are
redistributed based on fixed shares to the states and communities. In addition, a fixed budget
of € 1.67 billion is provided from the federal level for the improvement of transport
conditions on the community level, of which 0.22% can be used by the federal level for
research purposes according to the Gemeindeverkehrsfinanzierungsgesetz (Community
Transport Financing Law).
This fixed fund out of the general federal budget replaced the
earmarking of 0.03 DM per litre on the mineral oil tax which was introduced in 1967, and in
fact limited the available funds after 2002 (BMVBW, 2004). The budget for the states is
divided between them according to their share of registered vehicles with some adjustments
made for the “city states” (Berlin etc.) and new federal states. The funds are granted as a
subsidy and share of total costs. The states have to apply for these funds with programmes for
community road infrastructure investments (KStB Kommunaler Straßenbau) and for
investments into public transport (non-DB infrastructure and vehicles).
Besides, the federal level develops in cooperation with the states a complementary federal programme for
investments into the railways. Laaser and Rosenschoon (2001) analysed income from and
expenditure in the transport sector. General (without external costs) revenues are higher that
expenditure, however, even after transfer of funds between federal levels, communities show
a large deficit.