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https://nap.nationalacademies.org/catalog/27432/critical-issues-in-transportation-for-2024-and-beyond

SOURCES OF REVENUE FOR LOCAL TRANSPORTATION: WHAT ARE THE POTENTIALS AND THE IMPEDIMENTS?

The most significant current sources of additional local revenues for transportation, beside the traditional ones, are highway tolls, motor fuel taxes (highway and transit). Tolls are user fees imposed on those who use a transportation facility. They are advantageous in that they produce sufficient revenues; their administrative capacity exists in other toll facilities or can be created; they are efficient, well accepted by the public, and equitable to users. Tolls, however, are also difficult to adjust for inflation; the facilities they fund must be noticeably better than nontoll facilities for public acceptance, which is critical; and their operation and management must be efficient. Their revenue and cost conditions are uncertain and their opportunities for application, relatively few. Federal funds are severely restricted in toll projects, and state legislative approval is needed. Motor fuel taxes, taxes assessed locally in addition to traditional federal and state taxes, provide a reliable stream of revenue, have good revenue potential, are a mechanism for collecting tax; they have high collection efficiency and are equitable to users. Such taxes are not often used, however, since state legislatures are reluctant to share taxes; such taxes may not be well accepted if their need is not evident; these levies do not adjust with inflation unless indexed; an they may produce border problems. Sales taxes are used primarily for transit financing. They produce much revenue, respond quickly to income changes and inflation, and are more acceptable politically than other taxes. Their administration is not usually a problem, and that task plus enforcement and redistribution are usually done at the state level. They, too, however, have disadvantages: revenues decline when consumer buying drops; they may encourage purchases outside the jurisdiction; and they are less related to transportation use. Other public services also compete for this revenue source. Beneficiary-based revenues refer to the following: joint development, benefit-assessment districts, and tax-increment districts. Examples of each are provided, as well as outlines of possible advantages and disadvantages. Each possible revenue source should be examined in light of local circumstances--in terms of what will work in the particular community involved. A number of questions helpful in such an examination are provided.

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    • Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved. This paper appeared in TRB Special Report 208, Proceedings of the Conference on Evaluating Alternative Local Transportation Financing Techniques. Conference was conducted by TRB and sponsored by FHWA and UMTA, November 28-30, 1984, Denver, Colorado.
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    Transportation Research Board

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  • Authors:
    • Brosch, Gary L
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  • Publication Date: 1985

Media Info

  • Media Type: Digital/other
  • Pagination: pp 27-29
  • Monograph Title: PROCEEDINGS OF THE CONFERENCE ON EVALUATING ALTERNATIVE LOCAL TRANSPORTATION FINANCING TECHNIQUES
  • Serial:

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Filing Info

  • Accession Number: 00451149
  • Record Type: Publication
  • Files: TRIS, TRB, ATRI
  • Created Date: Nov 30 1985 12:00AM