The National Academies Press

Currently Skimming:

Pages 169-198

The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.

From page 169... ... 6 Investment Funding Options Chapter 5 provides estimates of the annual investment needed to renew and modernize the Interstate Highway System over the next 20 years under a nominal and two excursions of traffic growth rates. As discussed in that chapter, if investments are made in all improvements that are cost-beneficial, spending in the nominal case will be $57 billion annually, with higher and lower derivative cases of $45 billion and $70 billion, respectively, or in the range of 2 to 3 times current spending. Read the entire page →
From page 170... ... 170 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM 1993. However, HTF receipts have been stagnant, failing to keep pace with inflation and growth in motor vehicle travel in recent years (see Figure 6-1) Read the entire page →
From page 171... ... INVESTMENT FUNDING OPTIONS 171 Concerned about a pending shortfall in fuel tax revenues to the HTF, Congress established two separate commissions in 2005 to examine future surface transportation funding needs and recommend options for funding the system in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) Read the entire page →
From page 172... ... 172 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM BACKGROUND Beginning in 1916, the federal government began sharing in the cost of investing in new highways with the states on a 50/50 basis. In 1956, as described above and in Chapter 2, Congress established the HTF to pay for the federal government's new commitment to build an Interstate Highway System in partnership with the states. Read the entire page →
From page 173... ... INVESTMENT FUNDING OPTIONS 173 NATIONAL COMMISSION RECOMMENDATIONS At a Glance • Under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, Congress created two commissions that made recommendations for funding federal-aid highways. • Both commissions focused their recommendations on fuel taxes and other user fees, including raising and adjusting of taxes for inflation, evaluation of mileage-based user fees, and updating of truck-related fuel and excise taxes. Read the entire page →
From page 174... ... 174 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM evaluating mileage-based user fees (MBUFs) to augment or replace fuel taxes. Read the entire page →
From page 175... ... INVESTMENT FUNDING OPTIONS 175 USER FEE–BASED OPTIONS At a Glance The committee evaluated the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users commissions' recommendations for user fee–based solutions. The recommended options include • Increasing motor fuel taxes and other existing federal user fees; • Allowing states and metro areas to toll existing general-purpose Interstate highways; and • Instituting mileage-based user fees for Interstate use to replace other user fees. Read the entire page →
From page 176... ... 176 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM 10 years, assuming that VMT grows 1.5 percent per year (making certain other assumptions regarding changes in fleetwide average fuel economy and form of energy used by vehicles in the fleet) Read the entire page →
From page 177... ... INVESTMENT FUNDING OPTIONS 177 approach suggests it could lead to large swings in revenue because of retail fuel price volatility.) Fuel tax revenues, however, are becoming increasingly decoupled from highway use, both because of rising vehicle fuel economy in general and increased use of electric power and alternative "fuels" that are not now subject to federal taxes for transportation purposes. Read the entire page →
From page 178... ... 178 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM (though diminishing over time) that could be dedicated to specific aspects of the highway federal-aid program. Read the entire page →
From page 179... ... INVESTMENT FUNDING OPTIONS 179 travel. The tire tax is an amount that varies across weight categories that applies to specific vehicle weight ratings. Read the entire page →
From page 180... ... 180 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM trucks pay consistent with the costs they impose on the system is important for both efficiency and equity reasons. Federal fuel taxes and truck taxes are integral parts of the existing federal–state partnership for funding highways that serve state and interstate travel and increases in fuel and other related taxes would build on this long-standing relationship. Read the entire page →
From page 181... ... INVESTMENT FUNDING OPTIONS 181 are most applicable to Interstates (as explained below) Read the entire page →
From page 182... ... 182 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM consume 8 to 13 percent of gross revenue. However, Fleming and colleagues (2012) Read the entire page →
From page 183... ... INVESTMENT FUNDING OPTIONS 183 "double-taxation," whereby users pay both a fuel tax and a toll, although the rationale for using only one type of funding mechanism to achieve a given revenue stream is not obvious and there are means by which this specific concern could be addressed. For example, fuel taxes paid on toll facilities could be rebated to consumers, although this would increase the administrative cost of tolling. Read the entire page →
From page 184... ... 184 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM would need to be mitigated.11 To date Congress has not granted authority to the U.S. Department of Transportation or any other federal agency to regulate toll rates. Read the entire page →
From page 185... ... INVESTMENT FUNDING OPTIONS 185 Option 3: Instituting Mileage-Based User Fees for Interstate Use to Replace Other User Fees The SAFETEA-LU national commission reports both recommend evaluating and moving toward VMT fees to ultimately replace motor fuels taxes. Since those reports were published in 2007 and 2009, the term "VMT fee" has been replaced by "mileage-based user fees" (MBUFs) Read the entire page →
From page 186... ... 186 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM similar systems on all roads. In this proposal, passenger and freight users of the Interstates would be required to have an electronic transponder, such as used by E-ZPass, TxTag, Fastrack, and other vendors, to gain access. Read the entire page →
From page 187... ... INVESTMENT FUNDING OPTIONS 187 could be socially beneficial (Austin 2015) Read the entire page →
From page 188... ... 188 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM fuel tax [Kirk and Levinson 2016, 4; see also Appendix J] Read the entire page →
From page 189... ... INVESTMENT FUNDING OPTIONS 189 The proposal to add a mileage fee to trucks for use of all roads could have ramifications for the share of freight moving on highways compared with rail. For a 500-mile trip today, the typical truck pays about $19 in federal diesel taxes. Read the entire page →
From page 190... ... 190 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM Option 4: Dedicating More of Existing Federal Aid to the Interstates If it proves impracticable to raise user fees significantly to sustain the Interstates, one option would be to shift federal-aid funding eligibility in favor of greater investment in the Interstate System at the expense of other programs. In recent federal surface transportation authorizations, Congress has moved away from funding specific highway systems to more of a "block grant" approach, in which states have a great deal of discretion in the types of projects to which funds are allocated, as long as they are devoted to eligible facilities. Read the entire page →
From page 191... ... INVESTMENT FUNDING OPTIONS 191 the Interstates and other NHS routes during peak periods, it frees up these highways for through traffic. Institutional and Policy Considerations Because of the likely magnitude of funds needed for renewing and modernizing the Interstate Highway System, reallocating more federal aid for this specific purpose would not be sufficient overall if the required Interstate investment significantly exceeded $40 billion per year. Read the entire page →
From page 192... ... 192 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM spending at the state level. As the General Fund contribution to the HTF grows, the "donor" states to the federal treasury may be expected to exert pressure for HTF allocations to match individual states' contributions to the General Fund. Read the entire page →
From page 193... ... INVESTMENT FUNDING OPTIONS 193 cap-and-trade revenues to the Interstates to facilitate adoption of zero- or low-carbon emission electric-drive technologies, including hydrogen fuel cells. For example, such revenues could be used to subsidize the cost of recharging and refueling stations (as is the case in California [Green 2018] Read the entire page →
From page 194... ... 194 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM fees, however, are far past due for an increase to account for inflation, rising fuel economy, and increased use of highways. Congress could address the disadvantages of the current flat taxes (e.g., gasoline and diesel taxes) Read the entire page →
From page 195... ... INVESTMENT FUNDING OPTIONS 195 mileage-based user fee for the Interstates would enhance efficiency and could replace motor fuel taxes. Revenues gained would be returned to the states for Interstate renewal and modernization on a pay-as-you-go17 basis. Read the entire page →
From page 196... ... 196 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM increasingly difficult choices are now confronted, especially concerning how to pay for the discretionary parts of the federal budget. A sound argument can be made that using General Fund revenues is an appropriate way for Congress to pay for routes in rural states that are essential to the overall transportation network and carry mostly through-state travel. Read the entire page →
From page 197... ... INVESTMENT FUNDING OPTIONS 197 Austin, D Read the entire page →
From page 198... ... 198 NATIONAL COMMITMENT TO THE INTERSTATE HIGHWAY SYSTEM National Surface Transportation Infrastructure Financing Commission. Read the entire page →

From page 169...

... 6 Investment Funding Options Chapter 5 provides estimates of the annual investment needed to renew and modernize the Interstate Highway System over the next 20 years under a nominal and two excursions of traffic growth rates. As discussed in that chapter, if investments are made in all improvements that are cost-beneficial, spending in the nominal case will be $57 billion annually, with higher and lower derivative cases of $45 billion and $70 billion, respectively, or in the range of 2 to 3 times current spending.