TRB Special Report 303: Equity of Evolving Transportation Finance Mechanisms (2011) / Chapter Skim
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4 Transportation Finance Equity
4 Transportation Finance Equity
Pages 83-117
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From page 83... ...
The importance of involving all affected groups in identifying inequities and developing potential remedies is highlighted. The final section of the chapter identifies and discusses opportunities to fill gaps in current knowledge about the equity implications of transportation finance mechanisms, with emphasis on the need for robust empirical evidence.
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From page 84... ...
As discussed in Chapter 2, HOT lanes have been implemented in various locations in the United States, and there is some empirical evidence about the equity implications of these lanes, although modeling studies predominate (Schweitzer 2009)
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From page 85... ...
The results of such narrow studies provide one perspective on the equity implications of finance policies, but the full picture may look rather different. For example, Schweitzer (2009)
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From page 86... ...
Thus, while the incidence of the motor fuel tax is relatively well understood, the same cannot be said for many evolving transportation finance mechanisms. Findings Schweitzer finds that empirical studies of transportation taxes, fees, and charges converge on a basic range of estimates for how much different groups pay, "even though the studies involve significant variations in method, data, and assumptions" (2009, 2)
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From page 87... ...
Only when the gas-tax revenue is spent in a way that benefits everyone equally, such as by providing an equal per-household tax rebate, does the gas tax become progressive according to these analyses. In contrast, financing transportation services typically benefits different groups unequally, and so the net incidence of the tax could depend on just how those transportation services are distributed.
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From page 88... ...
is used as a baseline against which to assess the equity consequences of a new finance policy, variations in this baseline in different regions are likely to affect the assessment. Thus, introducing new road tolls in a region in which such tolls are already relatively common may have different equity implications than introducing road tolls in a region in which fees are not currently levied on road users directly (i.e., at the time and place of use)
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From page 89... ...
summarizes the evidence from a mix of modeling estimates and empirical data about the equity implications of voluntary and comprehensive toll policies. She finds both types of charges to be broadly regressive, with the variations in findings depending primarily on differences in policy design and distribution of revenues rather than on differences in study methods and data.
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From page 90... ...
Revenue recycling can be used to improve transit service. The net benefits of transportation are distributed less equally after Teubel 2000 Dresden, Germany Road user charges for the introduction of road pricing than before.
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From page 91... ...
HOT lanes achieve between 77 and 83 percent of the efficiency benefits (reduction in travel time) associated with com prehensive road pricing.
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From page 92... ...
Users with the lowest value of time harvest the least benefit (or Sioux Falls, South Dakota Road tolls 2008 suffer the most loss) from road pricing and investment decisions.
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From page 93... ...
Beyond the question of access to the system, HOT lane use generally rises with income, with some exceptions. On the I-394 MnPass lanes in Minnesota and the I-15 HOT lanes and the 91 Express Lanes in California, travelers from higher income households disproportionately use the lanes and pay tolls (Patterson 2007; Supernak et al.
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From page 94... ...
Most of the studies of comprehensive tolling systems find that road pricing introduces inequalities in payment burdens compared with nonpriced roads, at least if use of the road-pricing revenues is not taken into account. In general, tolls hit lower income groups harder than higher income groups as a share of income, although all income groups are likely to benefit from reduced congestion.
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From page 95... ...
. EVIDENCE ON EQUITY IN TRANSIT FINANCE Research on the equity of public transportation finance has generally taken two forms: • Demand-side studies have focused on the sociodemographics of tran sit passengers, often in comparison with users of other travel modes; and • Supply-side studies have examined who pays and who benefits from transit fares, subsidies, and service.
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From page 96... ...
Transit Fares, Subsidies, and Service Complementing research on the sociodemographics of transit riders are studies of the incidence of transit fares, the allocation of transit subsidies, and the distribution of transit service. A starting point for most of this work has been an examination of how transit fares, subsidies, and services affect choice riders vis-à-vis those who are transit dependent.
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From page 97... ...
. Like the fare research discussed above, the second and third sets of studies have tended to find that capital-intensive, commuter-oriented, and suburban transit services, such as commuter rail, tend to require larger per passenger subsidies and convey more higher income riders than less-capital-intensive, central-city transit services, such as urban buses (Luhrsen and Taylor 1996; Moore 1993a, 1993b; Rubin et al.
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From page 98... ...
In practice, however, the literature focuses almost exclusively on transportation remedies, with other solutions rarely considered explicitly as remedies for transportation finance inequities. Proposed Remediation Strategies Proposed transportation strategies for remediating inequities resulting from transportation finance policies fall into three main categories: • Altering the design of the finance policy; • Giving exemptions, discounts, subsidies, or rebates to parties adversely affected by the policy; and • Offering or improving alternative transportation services.
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From page 99... ...
Allowing different methods of payment of road user charges or transit fares could avoid or reduce some of the adverse impacts on lowincome travelers. As noted above, if road user charges have to be paid as a lump sum in advance or require access to a bank account or credit facilities, low-income groups are likely to be at a disadvantage.
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From page 100... ...
note that the choice of groups to receive an exemption or discount is often politically motivated, and not necessarily needs-driven; however, both the San Francisco and New York City proposals used established criteria to identify those entitled to rebates or credits -- namely, those qualifying for lifeline utility services from Pacific Gas and Electric and Pacific Bell in the case of the Bay Bridge, and those eligible for the federal earned income tax credit in New York City. Alternative or Improved Transportation Services The most direct and common government action to offset inequities in highway finance has been to improve public transportation services, using revenue either from general funds or from the proceeds of gas and other sales taxes or road user fees.
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From page 101... ...
Researchers and analysts generally agree that offering improved public transportation services to those unable to afford road tolls and taxes is not a panacea for offsetting inequities associated with highway finance policies. The equity nexus between highway taxes and tolls and transit use is relatively weak.
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From page 102... ...
For example, Ward (2005) undertook five case studies of environmental justice debates of planned public transit improvements.
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From page 103... ...
For example, legislation authorizing HOT lanes on I-394 in Minnesota stipulates that 50 percent
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From page 104... ...
review of the empirical research on equity implications of transportation user charges and taxes shows there to be very few comprehensive before-and-after studies that document the equity outcomes of road pricing. The studies that have been completed provide useful information about users, nonusers, operations, and revenues, as the analyses of the I-15 and 91 Express Lanes projects in California demonstrate (Sullivan 2000; Supernak et al.
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From page 105... ...
. Estimating Incidence Understanding a policy's incidence is of central importance to equity analysis, but burden shifting has not been considered adequately in most studies of equity implications of transportation financing mechanisms, with the exception of the gas tax.
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From page 106... ...
Future studies that consider burden shifting explicitly and do not limit their analysis to financial burdens alone should provide a more accurate picture of the equity implications of evolving transportation finance mechanisms. More Accurate Descriptions of Travel Behavior Changes in travel costs can affect the behavior of households and businesses in complex ways.
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From page 107... ...
Personal Global Positioning System tracking systems can reduce the response burden for surveys of travel behavior, but these systems are presently more expensive than traditional surveys. In the future, applying the most effective data-gathering techniques will be necessary to build an objective basis for analyzing, forecasting, and evaluating the equity impacts of evolving transportation finance strategies.
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From page 108... ...
. These models offer the potential to forecast changes in travel behavior with enough sophistication to support equity analysis.
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From page 109... ...
• The results of studies examining different road-pricing variants (e.g., HOT lanes, cordon tolls, and VMT fees) do not show any clear trends about the fairness (or unfairness)
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From page 110... ...
• Documenting practical experience with evolving transportation finance mechanisms, including information pertaining to equity, can provide robust empirical evidence with which to inform future deci sions about the use of such mechanisms. Comprehensive studies that record travel behaviors both before and after a mechanism has been implemented form a particularly valuable basis for equity analyses.
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From page 111... ...
In Transportation Research Record: Journal of the Transportation Research Board, No. 1864, Transportation Research Board of the National Academies, Washington, D.C., pp.
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From page 112... ...
Transportation Research Board of the National Academies, Washington, D.C. Dornan, D
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Measuring Spatial Patterns of Accessibility. In Transportation Research Record: Jour nal of the Transportation Research Board, No.
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From page 114... ...
In Transportation Research Record: Journal of the Transportation Research Board, No. 1932, Transportation Research Board of the National Academies, Washington, D.C., pp.
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From page 115... ...
In Transportation Research Record: Jour nal of the Transportation Research Board, No. 2163, Transportation Research Board of the National Academies, Washington, D.C., pp.
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From page 116... ...
In Transportation Research Record: Journal of the Transportation Research Board, No. 1735, TRB, National Research Council, Washington, D.C., pp.
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From page 117... ...
2005. Oregon's Mileage Fee Concept and Road User Fee Pilot Pro gram: Report to the 73rd Oregon Legislative Assembly on Proposed Alternatives to the Current System of Taxing Highway Use Through Motor Vehicle Fuel Taxes.
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