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33 and the state should increase revenues from heavy vehicles analysis cannot be expected to be exactly equal, either as a by addressing the evasion issue. This argument is generally whole or for any level of government. Even in states where, not accepted by HCAS practitioners and evasion analysis is either by established legislative policy or by constitutional not a generally accepted part of a sound revenue attribution requirement, all revenues are dedicated for highway pur- process. Evasion studies are often extremely complex and poses, there will be differences, if only resulting from lags well beyond the scope of a typical HCAS. When construct- between revenue collection and obligations of funds or actual ing an evasion estimate, the simple analysis of VMT and expenditures. MPG is not an accepted method owing to the margin of error in VMT and MPG calculations. The margin of error in these In some states, and at other levels of government, users calculations typically exceeds the expected level of evasion. pay taxes or fees that are legally not considered highway rev- enues. In other cases, highway revenues are used for other modes based on the argument that those expenditures benefit DIFFERENT LEVELS OF GOVERNMENT highway users by reducing congestion and/or reducing the AND EQUITY RATIOS need for costly highway improvements. More often, highway programs are paid for in part by non-user revenues (generally Unfortunately, many state HCASs have not recognized the without regard to any local connection, such as when general importance that the level of government has in influencing revenues are used) or, alternatively, user revenues are diverted study findings. Many states' equity ratios depend on what for other purposes, such as deficit reduction or balancing levels of government are being considered. For example, in budgets. the case of the 2002 Idaho HCAS, when state and federal programs were combined, the typical 18-wheelers (combina- In any case, good practice requires proper accounting for tion trucks with registered weights in the 70,000-lb to all user fees on the revenue side, regardless of where they are 80,000-lb range) were found to be substantially underpaying used, and all highway-related expenditures, regardless of the with an unadjusted equity ratio of 0.74 and adjusted equity source of funds (at that level of government). HCAS practice ratio of 0.89 (percent of total state and federal revenue paid generally includes the reporting of these imbalances, and divided by percent of total cost responsibility for state and then to fairly assess the tax structure's degree of equity for federal programs combined). However, when only state each vehicle class, examiners generally modify raw equity programs were considered, these typical 18-wheelers were ratios to "adjusted" equity ratios by expressing each ratio as substantially overpaying (ratios of 1.23 and 1.27 for the the percent of total user revenue paid divided by the percent unadjusted and adjusted equity ratios, respectively). of total cost responsibility. Historically, state HCASs more often focused on the state The level of interest and responsibility that states have highway network, state taxes and fees, and state expenditures for local street and highway programs varies widely. How- for highways. However, once the Interstate network was ever, most states will at least include an analysis of cost completed and the use of federal and state funds became responsibility for state aid to local governments for high- more flexible, more studies have examined at least state and way construction or for highway construction, mainte- federal funds (Virginia and Wisconsin), whereas others have nance, and other highway-related programs. examined federal, state, and local funds as well (Arizona, Some states have also done separate analysis of cost re- California, Idaho, Indiana, Nevada, and Oregon). sponsibilities for local highway expenditures by local gov- ernments from their own local funds. For almost all states, Programmed expenditures are generally separated out by these expenditures by local governments are primarily from level of government for the source of funding, as the exam- local non-highway-user revenue sources--for example, ple provided in Table 10 illustrates. A sound highway cost general revenues or property taxes. Many states, however, allocation model should provide for separate allocation of do have some local highway-user taxes or fees, such as expenditures for (1) state funds used in state-level programs; vehicle registration fees or fuel taxes. However, these local (2) state aid to local governments; (3) federal aid and possi- sources usually yield a relatively small amount of revenue bly, depending on the level of state interest, policies, and the compared with total local highway-related expenditures size of the program, direct federal construction and operations from local funding sources. on federal lands; and (4) local expenditures from local fund- ing sources, again depending on the level of state interest and If a state wishes to perform an analysis of cost responsi- policies. Separate allocation of expenditures for each level of bility for local expenditures from local sources, practitioners government makes it possible to present results in different generally recommend that a parallel analysis of local highway- ways (e.g., state and federal separately or in combination). user revenues also be conducted, to the extent that such local highway-user taxes exist, to present a complete picture and Revenues from each level of government should be ana- produce local level equity ratios. Typically, these equity ra- lyzed separately for essentially the same reason. In general, tios will be small; for example, in the range of up to only revenues and expenditures for any selected period for the about 0.2 or less.