Dedicated Revenue Mechanisms for Freight Transportation Investment (2012) / Chapter Skim
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Pages 77-109
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77 Leading Revenue-Generation Options Development and evaluation of a revenue mechanism to fund freight infrastructure entails a multilevel series of choices and tradeoffs. At the highest level is the basis of fees or taxation itself -- the activities, assets, or transactions that will be taxed, tolled, or surcharged.
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78 through a $0.001 per gallon excise tax on gasoline and other motor fuels, which produced $188 million in 2009. Revenue is collected through the Highway Trust Fund (highway and rail)
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79 investment efforts. There is very limited evidence, however, on the amount of new private investment that is induced by ITCs.
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80 Federal Collection and Enforcement Costs Estimates of federal collection and enforcement costs are summarized in Table 52. The lowest estimates are for the diesel fuel taxes with non-freight tax refunds, because that option uses the existing fuel tax system.
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81 Table 53 provides estimates of these adjustments and net federal revenue for 2012, assuming pass-through to customers is complete by then. The results are shown graphically in Figure 11.
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Table 53. Revenue targets and net revenue.
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83 The loss of revenue is limited by the underlying inelasticity of demand for freight transportation. As the economic impacts and analysis suggest, the adverse impact on commodity production and consumption would be relatively small.
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84 Table 54. Forecasts of U.S.
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85 Table 55. Long-term revenue estimates.
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86 Figure 13. The impacts of inflation and fuel economy on federal motor fuel taxes.
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87 Figure 14. Comparison of highway construction cost indexes.
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Table 57. Implementation cost estimates.
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89 net present value (NPV)
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1 2 3 4 5 6 7 8 9 10 NPV Diesel fuel tax with non-freight refunds -$ 4,995$ 4,995$ 4,995$ 4,995$ 4,995$ 4,995$ 4,995$ 4,995$ 4,995$ 33,812$ Diesel/gas tax with non-freight refunds -$ 4,757$ 4,757$ 4,757$ 4,757$ 4,757$ 4,757$ 4,757$ 4,757$ 4,757$ 32,202$ Diesel fuel tax with vehicle ID (300)
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91 implementation and collection costs that dilute their revenue-generating effectiveness. • The lowest ratio is for the diesel/gas fuel tax with tax refunds since it would require the great majority of vehicle owners -- about 240 million -- to file for refunds.
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Annual Industry Cost (billion) Ratio $/Gal Net Annual Federal Revenue (billion)
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93 For all three candidate mechanisms, low-tech implementation approaches result in lower implementation, collection, and compliance costs; shorter implementation timelines; and greater revenue-generation efficiency. In all three cases, low-tech collection methods could build on existing systems.
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94 Table 63. 2008 estimated vehicle counts.
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95 tor in the need for infrastructure capacity and in the wear and tear on roads. Most highway vehicles would rarely travel significant distances off public roads, but there are obvious exceptions for vehicles used in agriculture, resource extraction (e.g., mining and lumber)
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96 • If graduated by size or weight, an annual registration fee could encourage users to choose the smallest (and presumably most fuel-efficient and lowest-emissions) truck that will perform the task at hand.
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97 trucks; in reality, the truck population includes a wide range of vehicles used for many purposes. This issue is treated at greater length in Appendix B
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98 service vehicles have been used in the past for urban delivery and will likely become a practical possibility with continued advances in battery technology. Applying fuel taxes to electricity is difficult.
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99 trips within Mexico are a mirror image, handled by Mexican truckers to and from drop lots south of the border. Under the North American Free Trade Agreement (NAFTA)
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100 In 2007, ATRI estimated an overall fuel tax revenue loss of $900 million annually due to these exemptions, as shown in Table 68. The federal portion was $570 million.
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101 agencies, funding fees would presumably entail offsetting increases across the whole mix of federal revenue sources. Unless federal agencies accepted a net budget loss, the impact of federal agency freight fees would be spread across the general population.
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102 trucking industry, whose members would bear the brunt of the increase. ATA has also proposed an increase in the diesel tax and tied it to proposals to reduce diversion, reduce evasion, and narrow exemptions.
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103 Table 70. 2005 Mineta Institute survey findings.
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104 Table 71. Mineta Institute study summary of mileage tax survey results.
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105 Figure 17. Results from Mineta Institute survey.
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106 Table 72. MBUF public opinion study results.
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107 Table 73. Support for vehicle registration fees.
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108 There are marked differences in implementation time and cost, with the high-tech variations on VMT fees and fuel tax surcharges taking longer and costing more. A federal registration fee would be the quickest and least expensive option.
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109 the industry has recently experienced. Freight and service truck operators already have stronger cost incentives to minimize mileage and fuel use, so any new incentives would be slight.
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