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The National Academies

NCHRP 20-24(07) [Completed]

Alternatives to Motor Fuel Taxes for Financing Surface Transportation Improvements
[ NCHRP 20-24 (Administration of Highway and Transportation Agencies) ]

  Project Data
Funds: $300,000
Research Agency: Cambridge Systematics, Inc.
Principal Investigator: Arlee T. Reno and Dr. Joseph R. Stowers
Effective Date: 3/1/1992
Completion Date: 10/15/1994

A framework, applicable to all levels of government, is presented and demonstrated for evaluating alternatives to the motor fuel taxes. General assessments and recommendations on future scenarios and trends are given, and a contract between transportation agencies and their customers is proposed as an aid to generating adequate revenues.

Petroleum-based motor fuel taxes are the mainstay of the traditional user-charge approach to highway funding in the United States; they have been a reliable, economical, and comparatively popular method. The federal government and many state governments deposit these revenues in dedicated accounts embracing a user-fee approach to transportation improvements and producing a reliable flow of funds that facilitate long-range planning and programming. However, a number of factors has reduced the effectiveness of motor fuel taxes as primary financing mechanisms for highway and other surface transportation improvements.

Continued improvement in motor-vehicle fuel efficiency and the development of alternatives to petroleum-based fuels diminish the effectiveness of motor fuel taxes as a measure of highway use and have a net effect of reducing expected revenues. Furthermore, motor fuel taxes are often used to implement national policies on energy issues, on environmental concerns, and for budget-deficit reduction, which reduces the amount of motor fuel tax receipts available to transportation and erodes the concept of a dedicated fund comprised of user fees. Moreover, state and local governments are having to assume increasing responsibilities for funding the surface transportation. system

Cambridge Systematics, Inc., and Sydec, Inc., developed (1) a framework for evaluating revenue sources at all levels of government, (2) several future scenarios, and (3) a concept for a contract approach between transportation agencies and their customers. Project results have been published as NCHRP Report 377, Alternatives to Motor Fuel Taxes for Financing Surface Transportation Improvements.

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