Selection between the two tax schemes would be a policy choice that weighed the trade-offs involved. The potential economic benefit under ideal pricing would be greater, and the option would have the practical attraction that both shippers and highway agencies would gain. Potential savings from the simplified pricing system would be only a little less, and the fee scheme would be easier to administer, but the high fees required to gain the pavement savings might make the option politically unattractive.
This example is presented here not for the significance of its quantitative results [the authors of the study acknowledge that their estimation methods are very approximate, the data are now old, and the magnitudes of some impact estimates may have been distorted by problems in the U.S. Department of Transportation (USDOT) data employed)] but to illustrate the kind of comparison of economic consequences that ought to be the basis of evaluations of all transportation user fee schemes. Projections of economic impacts will always be uncertain; however, in practice, once an initial evaluation is made and a fee change put into effect, the consequences can be monitored and fees readjusted on the basis of new information.
In summary, the tax policy studies show that the criteria that the states and Congress recognize are revenue adequacy, fairness, and administrative practicality. Actual tax policies are driven by the objective of meeting revenue targets; however, in enacting transportation funding arrangements, governments generally have respected the user fee finance principle because it is seen as practical and fair. Explicit consideration of how changes in user fees and other funding arrangements will affect transportation system performance or the economic benefits derived from transportation programs seldom enters into finance or fee decisions. Nonetheless, it would be possible to compare fee alternatives on this basis and gain useful guidance for policy if a program were put in place to evaluate systematically the impacts of fees on the behavior of highway users and on the costs and benefits of the highway program.
This section summarizes estimates of the return earned by highway investments in recent decades. This information will help decide whether present finance arrangements are promoting sound decisions on capital spending levels and project selection. It was argued above that one mechanism by which present finance arrangements may affect system performance is through limiting total spending. A facility that provided a service whose value to users was less than the cost of providing the service probably could not generate enough revenue from user fees to sustain itself in the long run. Also, because fee levels are tied to spending, users have an incentive to oppose spending on a facility that is worth less to them than the