SPECIAL REPORT 285
The Fuel Tax
AND ALTERNATIVES FOR TRANSPORTATION FUNDING
Transportation Research Board
Transportation Research Board Special Report 285
IA planning and administration
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Copyright 2006 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America.
NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competencies and with regard for appropriate balance.
This report has been reviewed by a group other than the authors according to the procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
This study was sponsored by the National Cooperative Highway Research Program, the Federal Highway Administration of the U.S. Department of Transportation, and the Transportation Research Board.
Cover and design by Tony Olivis, Studio 2.
Library of Congress Cataloging-in-Publication Data
National Research Council (U.S.). Committee for the Study of the Long-Term Viability of Fuel Taxes for Transportation Finance.
The fuel tax and alternatives for transportation funding / Committee for the Study of the Long-Term Viability of Fuel Taxes for Transportation Finance, Transportation Research Board of the National Academies.
1. Transportation—United States—Finance. 2. Motor fuels—Taxation—United States. 3. User charges—United States. 4. Infrastructure (Economics)—United States— Finance. 5. Transportation and state—United States—Evaluation. I. Title.
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Committee for the Study of the Long-Term Viabilityof Fuel Taxes for Transportation Finance
Rudolph G. Penner,
Urban Institute, Washington, D.C.,
Colorado School of Mines, Golden
David J. Forkenbrock,
University of Iowa, Iowa City
David A. Galt,
Montana Petroleum Association
University of Texas, Austin
Thomas D. Larson,
Therese J. McGuire,
Northwestern University, Evanston, Illinois
Debra L. Miller,
Kansas Department of Transportation
University of Illinois, Chicago
Robert W. Poole, Jr.,
Reason Foundation, Los Angeles, California
University of California, Davis
James T. Taylor II,
Bear, Stearns & Co., Inc., New York
RAND Corporation, Santa Monica, California
Transportation Research Board Staff
Joseph R. Morris, Study Director
The Transportation Research Board (TRB) formed the Committee for the Study of the Long-Term Viability of Fuel Taxes for Transportation Finance to respond to concerns that present funding arrangements, especially fuel taxes, may become less reliable revenue sources for transportation programs in the future. At the same time, transportation agencies are interested in developments in toll collection technology and in public–private road projects that suggest opportunities to try fundamentally new approaches to paying for transportation facilities. The goals of the study were to assess what recent trends imply for the future of traditional transportation finance, identify finance alternatives and the criteria by which they should be evaluated, and suggest ways in which barriers to acceptance of new approaches might be overcome. The study was sponsored by the state transportation departments through the National Cooperative Highway Research Program, the Federal Highway Administration, and TRB.
The committee’s conclusions address the viability of present revenue sources, the merits of present transportation finance arrangements, and the potential value of various reform options. The recommendations propose immediate changes to strengthen the existing highway and transit finance system and actions to prepare the way for more fundamental reform in the long term. Because the impetus for the study was concern for the continued reliability of the revenues derived from the special fees and taxes paid by highway users, most of this report is devoted to questions about future tax revenue, alternative forms of highway user charges, how these charges affect highway system performance, and related aspects of highway finance. Problems relating to finance of public transit were not considered as comprehensively. An important feature of present transportation finance arrangements is the dedication of portions of highway user revenues to transit. The committee considered transit funding primarily insofar as it is linked in this way to highway user fee revenue.
The committee received briefings at its meetings from federal, state, and local government transportation administrators and from experts in various aspects of transportation finance. The committee thanks Tyler Duvall, Patrick
DeCorla-Souza, Michael Freitas, and James March of the U.S. Department of Transportation; Elizabeth Paris of the staff of the U.S. Senate Finance Committee; Charles Stoll of the California Department of Transportation; James Whitty of the Oregon Department of Transportation; Ellen Burton of the Orange County Transportation Authority; Brian Mayhew of the Metropolitan Transportation Commission; Marlon Boarnet of the University of California at Irvine; Helen Sramek of AAA; Darrin Roth of the American Trucking Associations; Greg Hulsizer of California Transportation Ventures, Inc.; Arlee Reno and Gary Maring of Cambridge Systematics; Dawn Levy of Cassidy & Associates; Arthur Guzzetti of the American Public Transportation Association; Jeffrey Parker; Alan Pisarski; and Arthur Bauer. The committee also thanks Paul Sorensen and Brian Taylor of the University of California at Los Angeles, authors of a resource paper prepared for the committee on road use metering systems. The executive summary of that paper is included as Appendix C of this report. The contents of the resource paper are the responsibility of the authors.
The report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s (NRC’s) Report Review Committee. The purpose of this independent review is to provide candid and critical comments that assist the authors and NRC in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. The committee thanks the following individuals for their participation in the review of this report: David L. Greene, Oak Ridge National Laboratory, Knoxville, Tennessee; Karen J. Hedlund, Nossaman, Guthner, Knox, & Elliott LLP, Arlington, Virginia; Herbert S. Levinson, Herbert S. Levinson Transportation Consultant, New Haven, Connecticut; David Luberoff, Harvard University, Cambridge, Massachusetts; Jeff Morales, Parsons Brinckerhoff Quade and Douglas, Inc., Sacramento, California; Ian W.H. Parry, Resources for the Future, Washington, D.C.; Arlee T. Reno, Cambridge Systematics, Inc., Chevy Chase, Maryland; and Paul P. Skoutelas, PB Consult, Inc., Pittsburgh, Pennsylvania.
Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the committee’s conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by John S. Chipman, University of Minnesota, and C. Michael Walton, University of Texas at Austin. Appointed by NRC, they were responsible for making certain that an independent examination of the report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.
Joseph R. Morris managed the study and drafted the final report under the guidance of the committee and the supervision of Stephen R. Godwin, Director of Studies and Information Services. Suzanne Schneider, Associate Executive Director of TRB, managed the report review process. Special appreciation is expressed to Norman Solomon, who edited the report; Jennifer Weeks, who prepared the prepublication copy; and Juanita Green, who managed the book design and production, all under the supervision of Javy Awan, Director of Publications. Frances Holland assisted with meeting arrangements and communications with committee members.