Alternative Approaches to the Taxation of Heavy Vehicles Applications Manual (1997) / Chapter Skim
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6.0 Equity
6.0 Equity
Pages 47-62
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From page 47... ...
The second section discusses the attribution of user~harge revenue to the various vehicle classes. The Bird and final section discusses the conversion of estimates of highway cost responsibility by operating-weight range to estimates by reg~stered-weight range - a conversion that is required in order to compare cost responsibility with user-charge payments.
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From page 48... ...
Estimates of over- or underpayments may be expressed as totals for each class, or they may be made more comparable by dividing by vehicle-m~les of travel for each vehicle cIass.4 Revenues and Expenditures to be Measured An equity analysis of a given user-charge system should focus on the equity of that system. The equity ratios to be developed should compare revenues obtained from these user charges to cost responsibility for highway expenditures funded by these revenues.
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From page 49... ...
For this reason, local roads usually are financed mainly by general revenue or by specific types of non-user taxes such as property taxes. Only when states and/or local governments have a significant Interest In local highway user revenue options is there a strong reason for including local programs in state cost allocation studies.
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From page 50... ...
However, when all levels of government are considered, there is significantly more non-user revenue used for highways than user revenue diverted from highways. If total highway user revenue does not exceed total highway expenditures, it is desirable to include diverted revenue in the analysis in order to provide a co "mplete accounting of user payments and cost responsibility.
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From page 51... ...
Since annual mileage has almost no effect on cost responsibility per mile, there is no need for highway cost-allocation studies to clishnguish vehicle classes on the basis of annual mileage. However, user fees paid per mile can vary quite significantly with annual mileage, so equity analyses should incorporate at least some representation of annual mileage.
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From page 52... ...
>SO,OOO pounds Overall Overall - AD Vehicles Source FLORA, 1997 Federal Highway Cost Allocation Study, August 1997, p.
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From page 53... ...
6.2 Attribution of User-Charge Revenue Analyses of the equity of highway user charges require that revenue obtained from these charges be attributed to the various vehicle classes that are distinguished in the equity analysis. To the extent that these attributions are performed on the basis of estimates of VMT by vehicle class, it is important that the VMT estimates be the same ones used in the corresponding cost avocation.
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From page 54... ...
Investigate past studies to determine if estimates have been made of factors that can be useful in the revenue attribution process, such as special surveys of registered vehicle owners, analysis of trends In components of the revenue, or studies of possible chances in the revenue collection process. v Based on an analysis of recent and historical user revenue data, make trend-based projections for the analysis period, which is typically the currently adopted five to ten year construction program period, for each category of user revenue to be attributed to vehicle classes.
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From page 55... ...
The major difference is that the revenue attribution process required for equity analyses involves a top-down process of attribution of a given amount of total revenue actuaby codectec] for each class of revenue to vehicle classes, as contrasted to the bottom-up process of independently estimating revenue for each class and adcling these estimates to estimate~total revenues that should be collected for each revenue class.
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From page 56... ...
39 and 40. 56 Cambridge Systematics, Inc.
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From page 57... ...
Gross Receipts Taxes Gross receipts taxes that are uniquely applied to motor carriers usually are relatively small and can be attributed to commercial vehicles in an approximate manner. A reasonable approach in these cases is to assume that gross receipts are proportional to commercial vehicle VMT, and therefore this revenue can be attributed to vehicle classes in proportion to commercial vehicle VMI.
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From page 58... ...
This may be desirable if the fee rates are substantially higher for heavier vehicles and if there are substantially more licenses per vehicle for heavy vehicles. Permit Fees Permit fees usually include several types of permits, but the amount of revenue involved usually is small enough so that it can be attributed to all commercial vehicles on the basis of commercial vehicle VMT in each vehicle class.
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From page 59... ...
The tools that FHWA win provide are expected to include default values for ah required parameters (tax rates, fuel efficiencies, fuel prices, etc.~. In order to attribute HTF highway-account revenue to vehicle classes, a state would have to supply forecast or estimated revenue from each tax source attributable to highway users in the state (from Highway Statistics for recent years)
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From page 60... ...
Source: FHWA, 1997 Highway Cost Allocation Study, Appendix B: Highway Revenue Forecasting Model (HRFM - ) , draft, June 1997, p.
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From page 61... ...
The use-tax revenue also should be aggregated, as appropriate, to the smaller number of vehicle-type/a~deconfiguration classes used in the equity analysis. 6.3 Converting Between Operating Weight and Registered Weight Conversion matrices are required to convert cost responsibility results developed by operating weight into results by registered weight in order to compare results in the form Of equity ratios for vehicles by registered weight.
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From page 62... ...
Checks should be made when applying the matrices to assure that total cost responsibility for each matrix is unchanged, and that the resulting cost responsibility per vehicle-mile increases with registered weight in a relatively smooth fashion. Cambridge Systematics, Inc.
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