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32 T R A N S P O RTAT I O N F I N A N C E reauthorization period. Major opportunities exist for foreign affairs. This reliance on consumption means that increased fuel efficiency, including the possibility of technologies such as hydrogen fuel cells that improve air higher corporate average fuel economy standards, vol- quality, health, and productivity are actually threats to untary increases in fuel efficiency, increased use of transportation funding. hybrid vehicles, higher diesel vehicle share, and To find a better way, Ankner suggested that the par- improved emissions standards. With that said, the adigm needs to change. Instead of levying user fees hybrid vehicle's impact will be unclear over the next 10 based on the vehicle miles traveled by an individual car, years, but it is anticipated that hybrid market penetra- automobiles, for example, could be priced on the bases tion will rise between 4 percent and 6 percent by 2010, of their energy and environmental efficiencies. This with a possibility of up to 30 percent hybrid penetra- would align the transportation financing structure with tion. In the United States, increased diesel fuel use is not national priorities. seen as a significant threat, but 40 percent of light duty Ankner also offered the idea that transportation vehicles sold in Europe are diesel users. Also, new fuel should be looked at as a business. The assets the nation types--those currently not taxed for the Highway Trust has invested in the transportation system are significant Fund--while not a real threat in the next 10 years, may and generate value that has not been captured. While it be a more serious threat down the road. According to is important that responsibilities to the public are main- Reno, subsidies are a major threat. Such funding of tained, the value of transportation assets must be nontransportation investments with Highway Trust accessed and reinvested for the public good. One exam- Fund revenues raises questions among some about the ple is the use of variable message signs (VMSs) to gen- equity principle. erate advertising revenue. Ankner posed this question With these threats in mind, Reno suggested some to the group: "When a VMS is not displaying a conges- potential future revenue sources for the Highway Trust tion message, why isn't it advertising Coca-Cola?" Fund. Such revenue sources could include taxes on alter- Another missed opportunity Ankner mentioned is native fuels, elimination of subsidies (not a revenue EZPass, which could have been approached by states as source, but a means for creating additional funds for a business decision: "Why not partner with the private transportation), enhancement of traditional funding sector and capture a percentage of every transaction, off sources (including inflation-responsive taxes), gross the roadways?" domestic productresponsive taxes, price-responsive titling and registration fees, vehicle sales taxes, and new user-based fees (including taxes and fees based on vehicle Considering Transportation Finance Approaches miles traveled, congestion pricing, and tolls). Used by Other Governments No single new source or approach is a panacea, and when people look for new revenue sources, it is impor- Eva Molnar tant that they consider the following factors: equity, responsiveness to inflation, administrative costs, and Eva Molnar completed the panel by discussing the technological feasibility. According to Reno, in all like- potential to apply transportation finance approaches in lihood the desirable solution will be a mix of new and the United States that are used by other governments. refined current sources of revenue. Molnar explained that in Europe user fees provide a growing share of transportation funding. There is growth in private-sector funding but not as much as Conflicts Between the Current Federal was predicted in the 1990s. She explained that expecta- Transportation Financing Mechanism and Other tions were unrealistic and in most countries the envi- Domestic Policies Involving Energy, Land Use, ronment is not conducive to publicprivate and Environmental Protection partnerships. The forces of change in European transport funding William D. Ankner include public resource scarcity, reduced productivity of existing infrastructure, deregulation, expanding capital William D. Ankner spoke on the conflicts between the markets, and globalization. current source of transportation revenues (the gasoline She explained that cross-subsidies from freight to tax) and other domestic policies involving energy, land passenger rail will diminish and disappear in the future use, and environmental protection. At issue, according and discussed the range of user contributions currently to Ankner, is the fact that transportation funding is in place, including fuel taxes, annual vehicle taxes, reg- based on consuming a nonrenewable energy source, istration and sales taxes, road tolls (excluding tunnels which is inconsistent with the nation's energy, environ- and bridges), and taxes on vehicle insurance premiums. mental, and health policies and puts the nation at risk in She described Eurovignette, a toll system that encour-