State Highway Cost Allocation Studies (2008)

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46 Alternative fee—a fee that is charged to some vehicles in place of the usual fee (e.g., a lower registration fee for publicly owned vehicles). Arterial—a road or highway used primarily for through traffic. Attributable costs—costs that are a function of vehicle size, weight, or other operating characteristics and therefore can be attributed to vehicle classes based on those characteristics. Average daily traffic—average number of vehicles passing a given point or using a given highway per day. Average daily truck traffic—average number of trucks passing a given point or using a given highway per day. Axle-miles of travel (AMT)—product of VMT multiplied by the number of axles. Because trucks, on average, have roughly twice as many axles as cars (i.e., four versus two), their share of the total AMT on any given highway system will be approximately double their share of VMT on that system. Axle weight or axle load—gross load carried by an axle. Beltway—a controlled-access arterial encircling an urban area. Collector—a road that connects local roads with arterial roads. Common costs—expenditures that are independent of vehi- cle size, weight, or other operating characteristics and so cannot be attributed to any specific class of vehicles. These expenditures must therefore be treated as a com- mon responsibility of all vehicle classes and are most typically assigned to all classes on the basis of a relative measure of use such as VMT. Cost allocation—the analytical process of determining the cost responsibility of highway-system users. Cost-occasioned approach—one that determines responsi- bility for highway expenditures/costs based on the costs occasioned or caused by each vehicle class. Such an approach is not based solely on relative use, nor does it attempt to quantify the benefits received by different classes of road users. Cost responsibility—based on the principle that those who use the public roads should pay for them and, more specifically, that payments from road users should be in proportion to the road costs for which they are re- sponsible. It is the proportionate share of highway costs legitimately assignable to a given vehicle class user group. Cost-based approach—one in which the dollars allocated to the vehicle classes are measures of the costs imposed during the study period, rather than expenditures made during the study period. The difference between the cost- based and expenditure-based approaches is most evident when considering large investments in long-lived structures and when deferred maintenance moves the costs associated with one period’s use into another period. Cross-subsidization—a condition where some vehicles overpay and others underpay relative to their respective responsibilities. Dead load—load on a bridge when it is empty. Debt financing—funding current activities by issuing debt to be repaid in the future. Debt service—funds used for the repayment of previously incurred debt (both principal and interest). Deck—the roadway or surface of a bridge. Depreciation—the amount of decrease in the value of a physical asset owing to aging in a time period. Efficiency—the degree to which potential benefits are real- ized for a given expenditure. Efficient pricing—a system of setting prices for the use of highway facilities so that each vehicle pays the costs it imposes at the time and place it is traveling. It promotes the most efficient use of existing facilities and gener- ates the right amount of revenue to build the most efficient system and perform the optimal amount of maintenance. Equity—generally interpreted as the state of being just, im- partial, or fair. Horizontal equity refers to the fair treat- ment of individuals with similar circumstances. Vertical equity refers to the fair treatment of individuals in differ- ent circumstances. Equity ratio—the ratio of the share of revenues paid by a highway-user group to the share of costs imposed by that group. A user group that meets 110% of its cost responsi- bility would be assigned an equity ratio of 1.1. Equity ratios above 1.0 are assigned to user groups who are paying more than their cost-responsible share, where pay- ments from user groups assigned equity ratios of less than 1.0 fall short of the costs imposed by the group. Equivalent single-axle load (ESAL)—are calculated based on the pavement stress imposed by a single axle with an18,000-lb axle load. ESAL-miles are equivalent single- axle loads times miles traveled. Research has concluded that the relationship between axle weight and ESALs is an approximate third- or fourth-power exponential relation- ship; ESALs therefore rise rapidly with increases in axle weight. Excise tax—a tax levied on the production or sale of a spe- cific item such as gasoline, diesel fuel, or vehicles. Expenditure—the amount of money spent in a time period. External cost—one imposed on individuals who do not use the facility. Federal highway funds—those collected from federal high- way-user fees and distributed to states by the FHWA for spending on transportation projects by state and local governments. GLOSSARY

47 Functional classification—a system of classification of roads according to their general use, character, or relative impor- tance. Definitions are provided by the FHWA for Rural Interstate, Rural Other Principal Arterial, Rural Minor Arterial, Rural Major Collector, Rural Minor Collector, Rural Local, Urban Interstate, Urban Other Expressway, Urban Other Principal Arterial, Urban Minor Arterial, Urban Collector, and Urban Local. Functionally obsolete—a functionally obsolete bridge is one that no longer meets minimum standards, but may continue to operate with load restrictions. Gross vehicle weight—the loaded weight for a vehicle. Highway cost allocation study (HCAS)—a study that esti- mates and compares the costs imposed and the revenues paid by different classes of vehicles over some time period. Highway Performance Monitoring System—a system whereby the FHWA collects and reports data about a sample of road segments in every state in a common format. Highway user—a person responsible for the operation of a motor vehicle in use on highways, roads, and streets. In the case of passenger vehicles, the users are the people in the vehicles. In the case of goods-transporting trucks, the user is the entity transporting the goods. Incremental cost—the additional costs associated with building a facility to handle an additional, heavier (or larger) class of vehicle. Incremental method—one that assigns responsibility for highway costs by comparing the costs of constructing and maintaining facilities only for the lightest class of vehi- cles and for each increment of larger and heavier vehicles. Under this method, vehicles share the incremental cost of a facility designed to accommodate that class as well as the cost of each lower increment. Light (or basic) vehicles—the lightest vehicle class, usually including passenger cars, vans, and pickups. Live load—the additional load on a structure by traffic (beyond the dead load imposed by holding itself up). Load-related costs—those costs that vary with the load imposed by traffic on a facility. Marginal cost—the increase in total cost that results from producing one additional unit of output. With respect to highway use, the marginal cost is the increase in total highway costs that results from one additional vehicle trip. Economic efficiency is achieved when the price charged to the user is equal to the marginal cost. National Highway System—a set of highways throughout the United States that have been designated as national highways by the federal government. The FHWA sets design and maintenance standards and provides funding for national highways; however, the highways are owned by the states. National pavement cost model—a model of pavement costs that incorporates the wear-and-tear costs imposed by vehicle traffic of different weights and configurations as well as deterioration from age and environmental factors, taking into account the soil type, road-base depth, pave- ment material, pavement thickness, and climate zone. Non-divisible load—large pieces of equipment or materials that cannot be feasibly divided into smaller individual shipments. All states issue special permits for non- divisible loads that would otherwise violate state and federal gross vehicle weight, axle weight, and bridge formula limits. Operating weight—the actual weight of a vehicle at a par- ticular time. Overhead costs—costs that vary in proportion to the overall level of construction and maintenance activities, but are not directly associated with specific projects. Passenger car equivalent—a measure of road space effec- tively occupied by a vehicle of a given type under given terrain, vehicle mix, road type, and congestion conditions. The reference unit is the standard passenger car operating under the conditions on the road category in question. Registered weight—the weight that determines the registra- tion fee paid by a single-unit truck or a tractor. For a trac- tor, it is typically the highest of that vehicle’s declared weights. Revenue attribution—the process of associating revenue amounts with the classes of vehicles that produce the revenues. Right-of-way—the strip of land, property, or interest therein, over which a highway or roadway is built. Seismic retrofit—the work done on an existing structure intended to increase its resistance to earthquakes. Social (or indirect) costs—costs that highway users impose on other users or on non-users. Costs typically included in this category are those associated with noise, air, and water pollution; traffic congestion; and injury and prop- erty damage resulting from traffic accidents. Span—a section of a bridge. State highway system—comprises all roads under the juris- diction of state agencies. Statewide Transportation Improvement Program—a program where each state, following federal law guide- lines, produces and regularly updates a list of intended future transportation improvements. Structurally deficient—one that fails to meet the desired level of structural integrity. Weight limits often are placed on structurally deficient bridges. Tax avoidance—the legal avoidance of a tax or fee. Tax evasion—the illegal failure to pay a tax or fee. Truck—a general term denoting a motor vehicle designed for transportation of goods. The term includes single-unit trucks and truck combinations. User charge—a fee, tax, or charge that is imposed on facil- ity users as a condition of usage. User revenues—highway revenues raised through the impo- sition of user charges or fees. Value pricing—a system where prices are set in proportion to the benefits or value received by road users.

Vehicle class—any grouping of vehicles having similar characteristics for cost allocation, taxation, or other pur- poses. The number of vehicle classes used in a cost responsibility (allocation) study will depend on the needs, purpose, and resources of the study. Potential distinguish- ing characteristics include weight, size, number of axles, type of fuel, time of operation, and place of operation. 48 Vehicle miles of travel—equal the sum of vehicles divided by the number of miles each vehicle travels within a time period. Vehicle registration fees—fees charged for being allowed to operate a vehicle on public roads. Weight-mile tax—a graduated fee based on the weight of a vehicle and the miles the vehicle travels.