From flailing transit systems to inadequate maintenance, states throughout the country are struggling to adequately fund their transportation infrastructure. Making the problem more difficult is the fact that one of their primary funding mechanisms, the gas tax, is failing to cover added costs. Due to projected revenue decline from increased fuel efficiency and EVs, the political aversion to raising the tax, and looming fiscal cliffs, some state legislatures are beginning to consider how to supplement gas tax revenue to sustainably fund their transportations systems.
Congestion pricing seeks to better manage the capacity of urban highways by shifting some travel away from peak periods in order to improve traffic flow. For drivers who are low-income, have no alternative but to drive at peak times, and would be financially burdened by paying tolls, this has the potential to be regressive and inequitable. However, a new report from the Institute of Transportation Studies at UCLA suggests that the establishment of congestion pricing affords an opportunity to design the system from the ground up in an equitable way. The authors state that, “Congestion pricing can be introduced with a mechanism in place to protect the most vulnerable drivers.”
California is among the states that have added a special registration fee for zero emission vehicles. However, research commissioned as part of the enacting legislation casts doubt on the efficacy of the fee in paying California’s infrastructure costs, instead pointing to a road user charge as the most effective solution.
New reports have indicated unanticipated disruptions caused by ride-hailing services such as Uber and Lyft. Previously, SSTI discussed the positive and negative impacts ride-hailing services have on our transportation systems. Although these new reports focus on changes to ambulance services and airport revenues, they highlight again that ride-hailing services are fundamentally changing our transportation systems.
A new paper suggests that while gas taxes or similar revenue sources might be well-suited for maintaining our interstates, urban transportation will thrive more on local resources and must focus on two guiding principles: value capture and livability.
The first program to charge a per-mile fee to drivers will launch July 1 in Oregon. Although beginning with only 5,000 volunteers, the program will continue to expand as an alternative to reliance on the gas tax. Three payment and processing options have been authorized for participants.
California’s longstanding principle of relying on locally generated funds and suballocated state fuel taxes to improve the state highway system poses a principal-agent problem: Local funders have every incentive to fund expansions while leaving costly owner-operator responsibilities, including eventual reconstruction, to an increasingly cash-strapped state DOT. This month Transportation Secretary Brian Kelly published an op-ed urging a life-cycle approach that prioritizes system preservation.
The recent economic recession reduced available funding for every transportation mode. For transit, however, these funding reductions coincided with marked increases in ridership. This has pushed agencies to take a broad look at available funding options. Tapping agency-owned real estate as a revenue generator is one option.
Development of creative financing and new revenue sources for transportation projects remains a hot topic in transportation circles. Public-private partnerships exist in highway transportation, often using tolls as the revenue source to attract private investment. Transit P3s, however, remain behind the curve in development of policies and best practices. A P3 proposed for the Purple Line light rail in the Maryland suburbs of Washington, DC, illustrates new opportunities for funding a major capital transit investment with a combination of public and private funding.
When Governor Bob McDonnell signs HB 2313 into law, Virginia will become the first state to completely eliminate the retail fuel gas tax. As revenues from per-gallon fuel taxes continue to drop, states are searching for ways to bolster their transportation revenues.