ACCESS 50, Special Issue: Transportation Finance

Introduction: Greatest Hits

Brian D. Taylor

Prior to the recent explosion of digital access to individual songs, greatest hits albums were a staple of the music industry. An artist with enough successful albums under his or her belt could repackage the best songs on each previous album into a greatest hits collection, which often then became a bestseller itself. Here at ACCESS, we have more than a few successful issues under our collective belt, so many that our first greatest hits album even has a theme: Transportation Finance. While it was hard to narrow it down, the six articles we chose for this ACCESS Finance Special Issue collectively consider creative approaches emerging in California and elsewhere to address our mounting financial challenges in transportation.

From Fuel Taxes to Mileage Fees

Paul Sorensen

For much of the past century, federal and state taxes on gasoline and diesel have provided the majority of funding for US highway construction and maintenance. Fuel taxes perform well in this role: they distribute the tax burden among drivers in rough proportion to their use of the road network, are inexpensive to administer, and offer a modest incentive to buy and drive fuel-efficient vehicles. Download the PDF.

SFpark: Pricing Parking by Demand

Gregory Pierce and Donald Shoup

In 2011, San Francisco adopted the biggest price reform for on-street parking since the invention of the parking meter in 1935. Most cities’ parking meters charge the same price all day, and some cities charge the same price everywhere. San Francisco’s meters, however, now vary the price of curb parking by location and time of day. Download the PDF.

Just Road Pricing

Lisa Schweitzer and Brian D. Taylor

Economists have long advocated road pricing as an efficient way to reduce congestion and improve the environment. Many critics, however, object to road pricing on the grounds that it unfairly burdens low-income drivers. Implicit in these objections is the idea that existing transportation finance methods burden the poor less, or at least spread the burden more fairly. Most of the equity concerns about road pricing stem from the fact that it is regressive; that is, poorer people spend a larger share of their incomes on tolls than do wealthier people. But in the US, road systems are financed primarily through fuel taxes, vehicle registration fees, property taxes, and, increasingly, sales taxes—all of which are also regressive. Thus the relevant question is not simply whether road pricing is regressive, or even if it will burden the poor. The relevant question is whether road pricing will burden the poor more than other ways of paying for roads.

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For Whom The Road Tolls: The Politics Of Congestion Pricing

David King, Michael Manville, and Donald Shoup

It is almost universally acknowledged among transportation planners that congestion pricing is the best way, and perhaps the only way, to significantly reduce urban traffic congestion. Politically, however, congestion pricing has always been a tough sell. Most drivers don’t want to pay for roads that are currently free, and most elected officials—aware that drivers are voters—don’t support congestion pricing.

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The Private Sector’s Role In Highway Finance: Lessons From SR 91

Marlon G. Boarnet and Joseph F. DiMento

The gap between needed highway-construction funds and gasoline-tax revenues threatens to widen further. Hybrid vehicles are a reality; alternative fuels are on the horizon; and the gasoline tax—long the workhorse of highway finance in the United States—will inevitably decline in importance. So the search is on for new funds. Can the private sector help fill the gap? Only a few privately financed highways have been built in the US in the past half century. Among them, California’s State Route 91 (SR 91) in Orange County stands out as one of the mature examples. It began as something of a public policy long shot. In 1989, when state legislators debated a bill to allow a limited number of private highway franchises, even the bill’s supporters doubted it had a real chance of passage.

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Local Option Transportation Taxes: Devolution as Revolution

Martin Wachs

Ever since the widespread adoption of automobiles, Americans have preferred to pay for highways and bridges with “user fees”—that is, money collected from those who use the roads. Tolls and fuel taxes, which are roughly proportional to travelers’ use of roads, have been the most common user fees. However, revenues from user fees have been falling for three decades, as legislators become ever more reluctant to raise them to meet inflation. It has been easier to try new kinds of fees, such as sales taxes, to pay for transportation infrastructure. In the guise of urgent solutions to immediate problems, seemingly modest local tax increases are setting a national trend. Without deliberating or consciously adopting a change in policy, indeed without much discussion at all, we are gradually devolving transportation finance back to local governments and reducing user fees. Without knowing it, we may be experiencing a revolution in transportation finance, and we haven’t stopped to ask whether this is good or bad.

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