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35 WEIGHT FEES AND OTHER SPECIAL FEES truck operators. This latter category included efforts to develop "one-stop shopping" services at specific locations or Unfortunately, many states charge weight fees and other spe- through on-line service, both for individual states as well as cial fees with little or no attention to cost responsibility of the on a multi-state regional basis. vehicles involved. Often these fees are based only on the administrative cost of issuing permits or registering vehicles Regional cooperation in this field could lead to the actual in special classes. conduct of regional HCASs in which most or all of the analy- ses described in the guidelines would be done on a regional As a result of this issue, a Special Vehicle Analysis Work- basis, including evaluation of options for improvement of the book was developed and refined in studies conducted for equity of highway taxes and fees. several states (California, Idaho, Oregon, and Vermont), and was incorporated in FHWA's State HCAS Model. The workbook provides estimates of cost responsibility and rev- DEVELOPMENT AND USE OF SIMPLIFIED enue generated for a user-specified vehicle based on the HIGHWAY COST ALLOCATION STUDY PROCEDURES results of the state's HCAS. The workbook can be used to answer many types of "what if" questions for any selected Unfortunately, relatively little has been done to develop and vehicle. A typical question might be: "What permit fees refine simplified approaches to HCASs with the exception of should be charged for a particular truck configuration oper- the work performed by Arizona as described in chapter three ating at x miles and y weight in order for it to fully cover its and summarized in Table 6. The comparison of equity ratios cost responsibility?" Another example might be: "How in that table shows that the simplified model produced equity much should the registration fee (or any other fee) be in- ratios that were in close agreement with the comprehensive creased (or decreased) in order to have a truck at x registered HCAS for autos and buses, and although not shown in that gross weight cover at least 95% of its cost responsibility?" table, were also close for the entire heavy-truck class. How- ever, because the results produced a much higher equity ratio In the workbook, the user can select any type of vehicle for single-unit trucks (1.41 versus 0.90) and substantially from a list and modify any of the characteristics associated lower ratio for combination trucks (0.81 versus 0.93) sug- with the selected vehicle as desired. Unless the user specifies gests that the simplified model might be improved by using different values, the special vehicle characteristics are deter- different sets of allocation factors for these two broad classes mined using default values based on the characteristics of typ- of trucks. The overall approach would appear to lend itself to ical vehicles operating in the state. The user can override any easy refinements along these lines. or all of these default values. At a minimum, the user must specify the levels of government for the analysis, the vehicle The Special Vehicle Analysis Workbook contained in the configuration, RGW, and fuel type. The workbook will then FHWA State HCAS Model described previously employs a provide default values for all other vehicle characteristics. different approach that also could be applied relatively easily to each vehicle class (as distinct from its application to REGIONAL ISSUES AND POSSIBLE REGIONAL special vehicles applying for permits or other special fee APPROACHES TO HIGHWAY COST ALLOCATION classes), and has the advantage of producing more accurate STUDIES equity ratios because that model utilizes all of the important results of a recent comprehensive HCAS in its internal cal- Experience has shown that state legislators, particularly in culations of both cost responsibility and revenue payments. geographically smaller eastern states, give major attention to the tax rates and fees in surrounding states. This is especially The other experience of note is the sensitivity analysis true for taxes and fees applied to heavier trucks, because of performed recently by Vermont in completing and refining pressure to standardize taxes and fees on a regional basis. its 2006 HCAS using the FHWA State HCAS Model. Very large proportions of heavy trucks operate on an inter- VTrans used the model to explore how sensitive the equity state basis and can easily change their base state to states with results were to a variety of input factors. VTrans suggests lower flat fees (as distinct from fees based on mileage oper- that this approach might be used in a more rigorously orga- ated in each state). nized manner to develop a simplified model. This suggests that some type of regional approach to the evaluation of tax structures might be useful. Examples of ALLOCATION OF EXTERNAL COSTS similar efforts in the past in related highway issues include the periodic regional conferences organized by AASHTO The term "internal costs" includes all costs of highway-related and its regional affiliates and the series of regional confer- programs and use of highways that result in public expendi- ences and studies organized by states with the financial tures. This is to distinguish such costs from "external" or "so- support of FHWA to establish mechanisms for regional co- cial costs." External costs considered in the HCAS literature operation in the administration of services to heavy interstate (e.g., congestion, crash costs, air and noise pollution) are

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36 somewhat mistakenly thought of as costs that are entirely to injuries, and property costs not covered by insurance. The external to user payments and, therefore, are borne by non- internal or external costs are often omitted entirely from highway users (the larger society). In reality, the costs that are HCASs, except for some studies where the small portion that usually thought of as external or social are mixed--partially shows up in highway patrol or other state agency budgets is external and partially internal. For example, congestion results included. in wasted fuel, which increases highway-user costs. Air pollu- tion is an example of an external cost that is borne by society Pollution costs vary widely depending on local environ- rather than the highway user, although in some highly polluted mental and congestion conditions. In most areas, only a rela- areas such as most of Southern California air pollution control tively small proportion of total external costs are pollution costs are significant public expenditures. These costs should be costs; however, they are a relatively high proportion in the included in every HCAS to the extent that they can be identi- Los Angeles basin and in several of the largest urban areas. fied in state, regional, and local agency budgets. Most pollution costs are true social costs. Extra fuel costs cover only a very small portion of these costs. The costs associated with congestion in large urban areas have grown significantly in recent years. In 2003, congestion Noise costs are localized and are largely internal rather resulted in 3.7 billion hours of travel delay and 2.3 billion than external costs. Some highway noise does negatively af- gallons of wasted fuel at a cost of more than $63 billion fect local communities, although its impact has been greatly (Schrank and Lomax 2005). Most but not all congestion costs reduced by noise walls and is nearly entirely internalized are borne by urban highway users through fuel costs, wasted now for most new construction. time, and vehicle maintenance costs. Allocating the external costs associated with congestion, air Highway users also impose the costs associated with ve- pollution, noise, and vehicle crashes would add to the breadth hicle crashes on society. How significant are these crash and completeness of HCASs, but these costs have not been costs? The Economic Cost of Motor Vehicle Crashes report historically included in federal and state studies. Arguments constitutes one of the major sources of crash cost information offered against the allocation of these social or external costs in the United States. The report estimated the economic cost have included that they are much more difficult to quantify of all motor vehicle crashes in the United States in 2000 at than direct costs and that states do not have in place a set of $230.6 billion (Blincoe et al. 2002). This study monetized the user charges to cover these costs (Stowers et al. 1998). costs associated with 41,821 fatalities, 5.3 million non-fatal injuries, and 28 million damaged vehicles. The study also In an addendum to the 1997 Federal HCAS, the U.S.DOT included a number of cost elements: estimated the costs associated with air pollution, crash costs, congestion, and noise (Table 12). The economic costs asso- Productivity losses, ciated with air pollution are tied to the mortality, chronic Property damage, bronchitis, and other heart and respiratory diseases resulting Medical costs, from the inhalation of particulate matter, ozone, nitrogen Rehabilitation costs, dioxide, carbon monoxide, and ozone in vehicle emissions. Travel delay, Air pollution costs were estimated based on EPA models Legal and court costs, used to estimate the economic benefits of the Clean Air Act Emergency services, and on other studies of the air pollution costs tied to vehicle Insurance administration costs, and emissions (McCubbin and Delucchi 1998). When applying Costs to employers. this methodology to vehicle emissions, the authors per- formed sensitivity analysis with respect to the costs associ- The costs included those associated with both police-reported ated with premature death. As shown, when including the and unreported crashes. The crash costs are stratified by time, fuel, and maintenance costs associated with congestion severity according to the Abbreviated Injury Scale. This study examined crash costs associated with all vehicles, including both automobiles and heavy trucks. The average crash TABLE 12 ESTIMATES FOR SOCIAL COSTS OF MOTOR cost when all vehicles are included is $14,102 (2002 dollars) VEHICLE USE ($ MILLIONS) per crash. High Mid-Range Low Although significant, crash costs are partly internal Congestion $181,635 $61,761 $16,352 because some of them are paid for by users or public agen- Crash Costs $839,463 $339,886 $120,580 cies (e.g., insurance costs, police and highway patrol expen- Air Pollution $349,100 $40,443 $30,300 ditures, and state and local government emergency response Noise $11,446 $4,336 $1,214 organizations). However, the external costs are usually much Total $1,533,344 $446,319 $170,246 larger than these internal costs. The largest of these in mag- nitude is the cost of loss of life, loss of productive life owing Source: US DOT 2000.