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1 Equity and Transportation Finance To raise the revenues needed to sustain and renew the nation’s surface transportation system, policy makers are exploring a range of alterna- tives to current ﬁnance mechanisms. Among these alternatives are new toll facilities, including those developed and operated through private concessions; long-term leasing of toll roads to private concessionaires; high-occupancy toll (HOT) lanes, which have the dual objective of both raising revenue and managing congestion; sales taxes dedicated to new highway and transit infrastructure; and fees for vehicle miles traveled. Practical experience with these alternatives is limited, and, as a result, ofﬁcials charged with deciding whether to adopt alternative ﬁnance mechanisms have relatively few case studies and limited empirical data to inform their decision making. The equity implications of alternative and evolving ﬁnance mecha- nisms have captured the attention of politicians and the public. Most notably, concerns have been raised about the possibility of tolls pricing poor drivers off the road, leading to the popular moniker “Lexus lanes” to describe congestion pricing policies that charge drivers more to travel particular routes or use selected lanes at peak travel times (Schweitzer 2009). At the same time, questions have been raised about whether dif- ferent groups, who may be neither poor nor otherwise disadvantaged, are treated equitably by various transportation funding mechanisms. Equity in transportation ﬁnancing, as in other areas, means different things to different people. The many possible deﬁnitions sometimes over- lap with broader aspects of taxation and public ﬁnance, as well as with measures of transportation system performance unrelated to ﬁnance. Throughout this report, the authoring committee has followed precedent by treating equity as synonymous with fairness (see, for example, Pearce 5
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6 Equity of Evolving Transportation Finance Mechanisms 1994), thereby recognizing that the selection and application of equity goals require value judgments. Chapter 3 is devoted to assessing com- monly used deﬁnitions of equity and fairness and to showing how they can be made explicit and subject to empirical measurement. The equity dimensions of transportation ﬁnance have long been a sub- ject for academic research, and numerous articles on the topic have been published in the ﬁelds of social exclusion,1 environmental justice,2 and tax incidence3 (Schweitzer 2009). Noting the complex and multidimensional nature of equity, many articles compile alternative deﬁnitions and explore different classiﬁcation schemes in an attempt to analyze equity in a logi- cal and consistent manner. In general, however, these articles do not pro- vide readily accessible, practical advice for public ofﬁcials and other decision makers. This report seeks to bridge the gap between the academic research on equity and the needs of public ofﬁcials for guidance in practical decision making. It draws on the technical literature, on resource papers commis- sioned by the committee, and on information gathered during the committee’s meetings and symposium to develop guidance for public ofﬁcials and their advisors about assessing the equity of evolving trans- portation ﬁnance mechanisms. It also makes recommendations for fur- ther research that could enhance understanding of these mechanisms, thereby providing a more robust basis for future decision making. To set the context for the discussions in later chapters, the next section of this chapter examines the role of equity in the evolution of U.S. surface transportation ﬁnance, with emphasis on the focus areas of this report, namely, personal travel by automobile and transit. The legal protections 1 The term “social exclusion,” which is widely used in Europe, is a broader concept than poverty. It refers to the outcome of multiple deprivations that prevent individuals or groups from participat- ing fully in the economic, social, political, and cultural life of the society in which they live. 2 Environmental justice is deﬁned by the U.S. Environmental Protection Agency as the fair treat- ment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. According to the agency, environmental justice will be achieved when everyone enjoys the same degree of protection from environmental and health hazards and equal access to the decision-making process to have a healthy environment in which to live, learn, and work (www.epa.gov/environmentaljustice/). 3 Tax incidence is an economic term for the allocation of a tax’s burden among suppliers and con- sumers of a taxed item.
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Equity and Transportation Finance 7 and rights afforded Americans with regard to transportation ﬁnance equity are then discussed. The committee’s charge is presented, and its approach to its work described. ROLE OF EQUITY IN THE EVOLUTION OF U.S. SURFACE TRANSPORTATION FINANCE The extensive U.S. transportation system is administratively and ﬁscally complex, and collecting revenue for and spending money on transporta- tion regularly generates political debates over fairness. Questions fre- quently arise about who should pay and how much, and how revenues should be spent and where. The recent interest in various forms of road pricing has prompted some observers to reﬂect on the fairness of charg- ing travelers to use roadways. Such concerns over transportation ﬁnance equity are not new, however. In the United States, political debates over transportation ﬁnance have centered on questions of equity for more than a century and, as the following overview illustrates, have played a key role in shaping the ways in which the surface transportation system is currently funded. Local Streets Local streets make up the vast majority of the U.S. road system’s lane miles. They provide essential access to residential and commercial property for private, commercial, and emergency vehicles, thereby con- veying the value of connectivity to individual land parcels. They are also the most common channels for utilities such as electricity, gas, water, and sewer services, as well as for cable and fiber-optic networks. For these reasons, cities and counties have long provided and maintained such roads, financing them primarily by levying taxes on the properties that benefit directly from the access they provide.4 As land values are directly related to local street access, it has long been seen as fair and reasonable for property owners, rather than local street users, to pay for property-serving roads. 4 In some instances, land developers pay directly for local roads.
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8 Equity of Evolving Transportation Finance Mechanisms Highways In contrast to the land-serving focus of local streets, each of which may be lightly traveled, expressways and highways tend to carry longer- distance trips traveling at higher speeds and in greater volumes. Roads serving long-distance travelers have a lengthy history, but the develop- ment of modern highways started in the early part of the 20th century. With strong incentives from the federal government in the form of matching grants, states augmented local roads by creating major routes designed for heavy, longer-distance traffic. Costs for construction and reconstruction of urban and rural highways were (and still are) covered by issuing bonds. Early on, some debt service was financed by tolls, but most was paid from general revenues, which quickly strained state treasuries. Tolls on travelers have a long history as a source of highway ﬁnance, with privately ﬁnanced turnpikes appearing in the United States in the late 1700s. With the exception of bridges and a few heavily traveled turnpikes, however, tolls had been largely eliminated by the beginning of the 20th century, because the costs of collection absorbed a large pro- portion of revenues. Further, developing interconnected road networks required the construction and maintenance of both expensive-to-build links (over waterways or through mountain passes) and some lightly used links that could not be ﬁnanced entirely by locally generated toll revenues. An alternative approach to highway funding came when states, start- ing with Oregon in 1918, adopted motor fuel taxes—taxes that have paid most of the costs of building and operating major roads in the United States for nearly nine decades. In contrast to tolls, motor fuel taxes do not levy charges at precisely the time and place of road use; however, they charge for road use in rough proportion to motorists’ travel, and heav- ier vehicles pay more because they use more fuel per mile. In addition, when fuel taxes were introduced, they cost much less to collect and administer than tolls because the former were collected from a relatively small number of fuel distributors.5 5 Although toll collection costs have now fallen with the introduction of electronic tolling, the fuel tax remains much cheaper to collect than tolls.
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Equity and Transportation Finance 9 Most states reserved fuel taxes exclusively for transportation expendi- tures, and when the federal government decided in the 1950s to ﬁnance intercity highways on a national scale, it increased federal fuel taxes and created the federal Highway Trust Fund to secure these funds for highways, emulating the user-pays principle that had been successful in the states. Dedicating the revenues collected to road expenditures was viewed as fair because it charged the beneficiaries of roads for their use, an approach known as the user fee principle. Over time, public policy gradually came to favor a transportation sys- tem balanced in metropolitan areas between private vehicles and pub- lic transit. From 1964 onward, federal funding for public transit was provided from general funds, and the transfer of highway funds to tran- sit projects was ﬁrst permitted by the Highway Act of 1973. The Mass Transit Account was established within the Highway Trust Fund in 1983, thereby making a portion of highway user fees available for tran- sit systems.6 It was argued that improving mass transportation systems would in turn improve operating conditions on highways; hence, spending some portion of highway user fees on mass transit was deemed appropriate (McDaniel and Coley 2004). Some objected that this diver- sion of road user fees to other purposes was unfair because it violated the user fee principle; however, funding public transit, as well as bicycle and pedestrian projects, with highway user fees has been institutional- ized based on the rationale that drivers and their communities beneﬁt from such investments, at least indirectly. As this historical overview indicates, the U.S. notion of highway trust funds arose, at least in part, out of concern for equity. During the period from 1920 to 1945, highway ﬁnance shifted away from general instru- ments of taxation toward user fees in the form of motor fuel taxes. The user fee logic was codiﬁed during the period from 1945 to 1970 by putting motor fuel tax revenues into trust funds (Taylor 2006). Hence, the user pay principle is well established as an equitable policy for high- way ﬁnancing, even though the recent trend toward using sales taxes to fund transportation violates this principle (see Chapter 5). 6 In large urban areas, funds from the Mass Transit Account can be used only for capital or capital- related expenditures. In small urban and rural areas, however, these funds can also be used for operating expenditures.
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10 Equity of Evolving Transportation Finance Mechanisms Public Transit Most of today’s large publicly owned and operated transit systems have private, for-proﬁt origins. At the turn of the 20th century, most large U.S. cities were served by multiple private streetcar operators, often linked to real estate development on the fringes of urban areas; however, ﬁscal problems for private transit operators began to emerge shortly there- after. Contributing factors included service extensions and public regu- lation of fares to address concerns about unserved areas and unfair treatment of customers, labor agreements, and increased automobile ownership. The combined problems of rising costs and relatively ﬂat revenues continued to grow during the following decades. Despite an increase in transit ridership during World War II, transit system bank- ruptcies and public takeovers of private systems were commonplace. Once public-sector organizations acquired the assets of private ﬁrms, they were also required to subsidize operating costs, mainly from general revenues, including sales and property taxes. Federal subsidy of public transit began gradually in the early 1960s and accelerated rapidly in the 1970s. One of the arguments in favor of federal subsidies was that transit was key to ensuring mobility in cities, the pri- mary economic engines for much of the nation. Big city mayors and other urban interests also argued that an infusion of federal funding was needed to make up for years of private disinvestment in transit systems. Today, public transit receives federal subsidies for capital expenses, while operations are funded by local and state subsidies from general rev- enues or dedicated taxes (often sales taxes), direct user fees (fares), and, in some cases, indirect user fees (fuel tax revenues). This diversity of funding sources raises a host of equity questions, as do the multiple social needs that transit is asked to address. These needs include, but are not limited to, providing mobility for those without cars, providing alterna- tives to driving, reducing the environmental footprint of travel, provid- ing quality employment for workers with relatively little education, and making communities livable and sustainable. One of the sources of debate over ﬁnance equity is that transit ridership is not distributed equally across jurisdictions. Approximately one-third of all unlinked transit passenger trips in the United States are made in the New York metropolitan area, and the 10 largest U.S. transit systems carry almost
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Equity and Transportation Finance 11 60 percent of such trips (APTA 2010).7 The allocation of federal transit formula funding reﬂects these spatially asymmetric patterns of usage, for example, through the Urbanized Area Formula Program, instead of attempting to distribute transit resources somewhat equally across states and congressional districts according to principles of geographic equity. Further, transit riders, especially outside of New York City, are dis- proportionately low-income bus riders (Giuliano et al. 2000). Thus, equity questions arise about whether fares should cover as much of costs as possible or be kept low so as not to burden excessively the dispropor- tionately low-income transit riders. In recent years, two issues have dom- inated much of the debate about the equity of public transit ﬁnance. One issue concerns whether subsidies should go to capital-intensive invest- ments in new rail lines to higher income districts, so as to draw com- muters away from congested roadways, or to local bus services that serve larger shares of low-income riders.8 The other issue concerns the ways in which bus services are designed to capture discretionary riders at the expense of those who have no alternative means of transportation (see, for example, Sanchez et al. 2007 and Sanchez 2008). As discussed in the following section, a number of such equity questions are addressed, either directly or indirectly, by Americans’ legal protections and rights. LEGAL AND POLICY FRAMEWORK FOR EQUITY Legal Protections and Rights An array of constitutional protections, statutory mandates, presidential executive orders, and regulations accompanying federal grants or con- tracts collectively ensures that disadvantaged groups are included in transportation planning efforts, receive appropriate transportation ser- vices, and are given fair access to transportation infrastructure (see Appendix A for more detail). The protections provided tend to focus on persons with disabilities, the elderly, racial and ethnic minorities, and 7 An unlinked transit passenger trip is deﬁned as a trip on one transit vehicle, regardless of the type of fare paid or transfer presented. 8 Bus riders generally have lower incomes than rail riders, but there are exceptions (for example, on some transit services in the San Francisco Bay area). Thus, the speciﬁc characteristics of each indi- vidual case need to be examined when the equity of transit services is considered.
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12 Equity of Evolving Transportation Finance Mechanisms those disadvantaged by low income and, in the context of transportation ﬁnance equity, relate primarily to questions about ability to pay, bene- ﬁts received, costs imposed, and process equity. (These equity concepts are discussed in Chapter 3.) The principal U.S. law governing equity is Title VI of the Civil Rights Act of 1964, which forbids discrimination based on race, color, or national ori- gin. The U.S. Department of Transportation’s (DOT’s) regulations related to Title VI prevent local and regional recipients of U.S. DOT grant funds from directly or indirectly (through contracts, for example) discriminat- ing against people because of their race or national origin, but not neces- sarily because they have low incomes. The regulations speciﬁcally discuss how facilities and services are provided or located, although not speciﬁcally how they are paid for: [I]n determining the site or location of facilities, a recipient or applicant may not make selections with the purpose or effect of excluding persons from, denying them the beneﬁts of, or subjecting them to discrimination under any program to which this regulation applies, on the grounds of race, color, or national origin; or with the purpose or effect of defeating or substantially impairing the accomplishment of the Act. . . . (49 C.F.R. §21.5(b)(3)) In particular, U.S. DOT regulations define the phrase “effect of excluding persons” to mean that government actions cannot create what is called a “disparate impact.” Disparate impacts occur when transporta- tion services are delivered in ways that create beneﬁts for some users but not for others or create disproportionate beneﬁts for some system users compared with others. Disparate impacts are, however, a common occurrence—no trans- portation system is ubiquitous, service levels and quality vary substantially across an area in response to different ridership or trafﬁc patterns, and costs and beneﬁts are rarely distributed evenly or even in response to usage patterns. When these differences appear to have a racial compo- nent, however, even without the intent to exclude or harm speciﬁc racial or ethnic groups, Title VI and the U.S. DOT regulations issued pursuant to that legislation may apply. In practice, Title VI by itself, as interpreted by U.S. DOT and the federal court system, has generally not offered a remedy for equity claims made by
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Equity and Transportation Finance 13 racial and ethnic minorities who, even if not intentionally excluded from transportation system beneﬁts, receive inferior levels of service or pay more for the services they do receive. There is a lengthy list of court cases begin- ning in the 1990s in which advocacy groups sued their local transit systems, contending that these transit operators favored wealthy white users of their rail services over poor African-American and other ethnic minority and low-income riders of the bus system. Even where disparate impacts were obvious, the federal courts largely held that if transportation agencies were acting in good faith, making reasonable allocation and investment deci- sions, and not intentionally discriminating against groups on the basis of race or ethnicity, such disparate impacts were permissible (Thomas 2008).9 One area where Title VI—in conjunction with major presidential exec- utive orders and U.S. DOT regulations relating to environmental justice— has been effective is in giving disadvantaged groups more access to the process by which decisions about the transportation system are made. This increased access has, in turn, allowed disadvantaged groups to address other equity concerns. Over time, the concepts of environmental justice and environmental equity have expanded both legally and intellectually (Schweitzer and Valenzuela 2004). These concepts initially covered issues directly related to adverse environmental effects of transportation facilities (e.g., pollution and siting and transport of toxic hazards). Now, however, equity issues that can be addressed by environmental justice mandates include inequitable ﬁnancing or distribution of transportation services as well as exclusion of certain groups or communities from decisions about the location, ﬁnancing, and service parameters of transportation system improvements. Policy Questions Travelers who are neither poor nor otherwise disadvantaged (and who are not afforded protections under Title VI and related regulations) may 9 In February 2010, the Federal Transit Administration withdrew $70 million in federal stimulus funds from the proposed Oakland Airport Connector project following a complaint ﬁled under Title VI. The complaint alleged that Bay Area Rapid Transit (BART) had failed to conduct an equity analysis to determine how the beneﬁts of the project would be distributed (Brenman and Marcantonio 2010). A new funding package totaling $484 million and including $25 million in fed- eral New Starts funds has now been approved, however, and equity issues are being pursued further.
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14 Equity of Evolving Transportation Finance Mechanisms nonetheless be disproportionately affected by ﬁnance policies because they live in certain types of communities, have certain travel patterns, or drive certain types of vehicles. For example, Orszag (2008) notes that the incremental damage imposed by trucks on highways is not reﬂected in the current taxes on truck ownership and use; as a result, “there are wide disparities in the degree to which different types of trucks pay the cost of highway damage that is associated with their use” (p. 24). Another exam- ple is provided by Rosenbloom (2010), who notes that, on average, older drivers subsidize younger drivers because the former tend to avoid peak- period driving and major highways, but nonetheless pay the taxes needed to provide peak-period capacity on major roads. As these examples illus- trate, current ﬁnancing mechanisms raise questions about equity, even though such questions have attracted relatively little public scrutiny as compared with evolving mechanisms, notably road pricing. CHARGE TO THE COMMITTEE As the preceding discussion illustrates, equity is a fundamental issue in public decisions about transportation, both for investments in facilities and services and in ﬁnancing those investments. A broad legal framework prohibits discrimination in the collection and use of resources for trans- portation, at least at the federal level, although lack of discrimination may not itself assure equity. Within that framework, the courts have given administrative agencies considerable latitude in allocating resources in the fulﬁllment of their mandates. This observation underscores the notion that equity issues are neither cut and dried nor susceptible to formulaic resolution. Moreover, equity is rarely the sole criterion used to inform decisions about transportation investments. Public ofﬁcials make trade- offs among many criteria—efﬁciency, economic development, environ- mental protection, equity, and others—in arriving at a compromise solution. Addressing, and in some sense assuring, equity in transportation ﬁnance and investment will require understanding the issues, impacts, and options as well as balancing diverse interests to ﬁnd resolutions broadly viewed as fair. It is important to remember, for example, that the cost bur- dens imposed by a ﬁnance policy may be partially or totally offset, or even exceeded, by the resulting beneﬁts such as faster travel times, safer roads,
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Equity and Transportation Finance 15 and cleaner air. Therefore, equity is an ongoing and evolving concern that will need to be addressed over time through many and diverse decisions that will often involve trade-offs between beneﬁts and costs. In making such trade-offs, policy makers need to recognize that the transportation ﬁnance policies may bring net beneﬁts to some but impose net burdens on others. Furthermore, discussions of transportation ﬁnance equity are necessarily linked to broader discussions about the equity of the entire transportation delivery system, from funding sources through project selection and operating policies. Ways of raising the revenues needed to sustain and renew the nation’s surface transportation system have attracted considerable attention in recent years. Relevant reports include The Fuel Tax and Alternatives for Transportation Funding (TRB 2006), Future Financing Options to Meet Highway and Transit Needs (Cambridge Systematics, Inc., et al. 2006), and Transportation for Tomorrow (NSTPRSC 2007). A fourth report, Paying Our Way: A New Framework for Transportation Finance (NSTIFC 2009) was released while the present study was in progress. These reports consider aspects of equity in transportation ﬁnance, although none focuses on equity per se. Against this backdrop, the Transportation Research Board Executive Committee decided at its meeting in early 2008 that more time and effort were needed to understand the complexity of equity issues in ﬁnancing the nation’s surface transportation system (Rosenbloom 2009). As a result, the Committee on Equity Implications of Evolving Transportation Finance Mechanisms was tasked with providing guidance to public ofﬁcials about assessing the equity of evolving transportation ﬁnance mechanisms. To assist in its deliberations, the study committee was charged with holding a public symposium to discuss papers it would commission. Par- ticipants from a wide range of stakeholder groups were to be invited to that symposium. The committee was also charged with the following speciﬁc tasks: • Identifying the various dimensions of equity important for public policy debates about evolving ﬁnance mechanisms, • Suggesting speciﬁc issues for policy makers to consider when evolving mechanisms are proposed, and • Making recommendations for research.
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16 Equity of Evolving Transportation Finance Mechanisms COMMITTEE’S APPROACH The committee’s ﬁrst two meetings, held in Washington, D.C., in December 2008 and Irvine, California, in February 2009, were devoted pri- marily to talking with experts who have studied current and evolving trans- portation ﬁnance mechanisms and their equity implications (Appendix B). The committee also met with decision makers to gain a better under- standing of the ways in which equity in general, and ﬁnance equity in particular, enters into decisions about which transportation projects and programs to pursue and how to fund them.10 Armed with the information gathered from these meetings, together with its collective knowledge of the literature on transportation ﬁnance equity and of practical experience with evolving ﬁnance mechanisms, the committee commissioned four expert papers to inform its deliberations (Appendix C). During the course of its third meeting, held in Washing- ton, D.C., in May 2009, the committee discussed drafts of the papers with the authors and provided guidance for developing and completing these drafts in preparation for the planned symposium. The ﬁrst day of the committee’s fourth meeting, which was held in Washington, D.C., in September 2009, was devoted to the symposium on equity issues in ﬁnancing transportation. The primary purpose of the sym- posium was for the committee to explore various aspects of transportation ﬁnance equity with a wide range of experts and stakeholders. In develop- ing the symposium agenda (Appendix D), the committee sought to max- imize its opportunities to listen to and learn from participants on a range of topics, including • The politics of transportation ﬁnance and the roles of equity, • Public opinion on equity and transportation ﬁnance, • International experience, • Modeling travel and land use patterns to inform equity assessments, and • Remedies for problems of transportation equity. 10 Although the word “ﬁnance” is often used interchangeably with the word “funding” to mean a source of revenue, people also use “ﬁnance” in another sense: to mean how funding is managed (such as through debt). Finance can affect when funds are collected, which can have equity impli- cations. Therefore, the committee considered the equity implications of both funding (source of revenue) and ﬁnance (management of the revenue and disbursements). The word “ﬁnance” is used throughout this report in both of its senses.
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Equity and Transportation Finance 17 Invitations to the symposium were sent to academic and research organi- zations; professional associations; consultants; think tanks; congressional staff; federal, state, and local government organizations; transportation users and providers; and environmental and other stakeholder groups. Many of the 46 symposium participants were specialists in transportation policy and ﬁnance, and a number of participants represented groups that either provide or use transportation services (see Appendix D). The remainder of the fourth meeting and the ﬁfth and ﬁnal meeting, which was held in Washington, D.C., in February 2010, were devoted to committee deliberations and the development of this report. Taylor (2010) reports that public opinion research has consistently found most people’s idea of justice, and thus of equity, to be highly vari- able and complex. Studies comparing how people say they would act in a given situation and their actual behavior show that people “switch among characterizations of justice according to the situation” (p. 6). In the light of such observations, the committee agreed that its task was not to make the complex value judgments needed to select and apply equity goals. Rather, its task was to describe alternative equity deﬁnitions and concepts (e.g., criteria and impacts) and to explore the likely implica- tions of these deﬁnitions and concepts in the context of decisions about how to ﬁnance transportation projects and programs. Value judgments about what constitutes an equitable transportation system and how such a system should be ﬁnanced are the prerogative of elected ofﬁcials and are inherent in the broader political process.11 There is no clear consensus among the authors of articles and reports on transportation ﬁnance about what constitutes an alternative (or evolv- ing) ﬁnance mechanism. Nonetheless, most authors identify user fees col- lected through electronic tolling (generally referred to as “road pricing”) as an alternative ﬁnance strategy, the details of which continue to evolve as experience is gained with practical applications. For example, the authors of a report on the fuel tax and alternatives for transportation funding make 11 The committee recognizes that the choice of transportation ﬁnance mechanism may affect social equity in general, as well as equity within the transportation sector. For example, changes in trans- portation services resulting from a new ﬁnance policy may affect inequities in other sectors by making it easier or more difﬁcult (more time consuming, more expensive) for some people to access jobs, education, and health care services. An assessment of the impact of transportation funding on general social equity is, however, beyond the scope of the committee’s charge.
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18 Equity of Evolving Transportation Finance Mechanisms a distinction between ﬁnancial reforms within the present framework and alternative mechanisms based on toll road expansion and road use meter- ing (i.e., road pricing) (TRB 2006). Examples of these latter mechanisms include cordon tolls, HOT lanes, and distance-based pricing or mileage fees. The technical feasibility of such options depends on information technologies that make it “easier and cheaper to measure and record vehi- cle travel by road segment and time of day across different jurisdictions” (Wachs 2009, p. 9). Road pricing has been the subject of much discussion by professionals, policy makers, and the public, and much of the ﬁnance equity research deals with pricing (Schweitzer 2009). This focus on the income-equity implications of road pricing is similarly reﬂected in the committee’s report, particularly in the sections examining lessons learned from research, but should not be interpreted as advocating for road pricing. ORGANIZATION OF THE REPORT The next chapter discusses sources of surface transportation revenues in the United States and presents a taxonomy of transportation funding approaches, with emphasis on evolving mechanisms. This discussion is directed primarily to transportation ofﬁcials who are not familiar with the topic. Transportation experts already familiar with surface transportation ﬁnancing are likely to skip to the second part of the chapter, which intro- duces the idea of tax shifting. The discussion of who ultimately pays out- lines the process whereby a tax imposed on one party is actually paid by another. Such shifting has important implications for the fairness of a tax. Chapter 3 discusses the equity concepts public ofﬁcials may encounter when considering the use of evolving ﬁnance mechanisms to raise revenues for transportation projects and programs. Examples illustrate the range and complexity of equity issues that may arise and highlight the importance of looking at these issues from different perspectives. The ﬁnal section of the chapter discusses tax shifting as illustrated by two examples—the gas tax and a weight-distance tax on trucks. Examining who is affected by these taxes and by how much provides useful lessons for assessing the equity implications of transportation ﬁnance mechanisms in general. Chapter 4 summarizes the evidence about equity in road and transit ﬁnance, with emphasis on what has been learned following the practical
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Equity and Transportation Finance 19 implementation of evolving ﬁnance mechanisms. The chapter then dis- cusses possible strategies for remedying inequities associated with trans- portation ﬁnance mechanisms as well as the accompanying challenges. The ﬁnal section of the chapter identiﬁes opportunities to ﬁll gaps in cur- rent knowledge about the equity implications of transportation ﬁnance mechanisms. Chapter 5 addresses the ways in which equity has entered into debates over road pricing. Public opinion about equity issues can play a decisive role in determining the success or failure of road-pricing proposals, and the results of an analysis of public opinion surveys on the acceptability of road pricing are discussed. The chapter concludes by summarizing important lessons learned about the role of equity during real-life efforts to implement road pricing in the United States and overseas. The ﬁnal chapter presents the committee’s ﬁndings and its recom- mendations for public policy makers and their staff and for researchers and analysts. The chapter concludes with a discussion of possible sources of funding for the recommended actions. REFERENCES Abbreviations APTA American Public Transportation Association NSTIFC National Surface Transportation Infrastructure Financing Commission NSTPRSC National Surface Transportation Policy and Revenue Study Commission TRB Transportation Research Board APTA. 2010. 2010 Public Transportation Fact Book, 61st ed., April. Washington, D.C. http:// apta.com/resources/statistics/Documents/FactBook/APTA_2010_Fact_Book.pdf. Brenman, M., and R. A. Marcantonio. 2010. Transportation Victory for Social Equity. Planetizen, February 22. www.planetizen.com/node/42991. Cambridge Systematics, Inc., Mercator Advisors LLC, A. E. Pisarski, and M. Wachs. 2006. NCHRP Web-Only Document 102: Future Financing Options to Meet Highway and Tran- sit Needs. Transportation Research Board of the National Academies, Washington, D.C. Giuliano, G., H.-H. Hu, and K. Lee. 2000. The Role of Public Transit in the Mobility of Low Income Households. Final Report. Award No. 53-6600-4005. METRANS National Center for Metropolitan Research, University of Southern California, Los Angeles. McDaniel, W., and M. Coley. 2004. History of the Highway Trust Fund. In Transporta- tion Research Record: Journal of the Transportation Research Board, No. 1885, Trans- portation Research Board of the National Academies, Washington, D.C., pp. 8–14.
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