Current & Future Alternative Funding for Surface Transportation

Paul F Hanley

Mid-America Transportation Center Fall 2012 Lecture SeriesSponsored in part by Union Pacific

September 7, 2012

Associate Professor, Civil & Environmental EngineeringDirector of Transportation Policy Research

How do we pay for roads and mass transit in our nation?

Video Clipped from Winning MATC sponsored Student Video Competition: Allie Reiter, “Road Scholars”

Taxes

Excise

Fuel Tires

Sales Tolls Property

Registration Title/License Real Estate

Funding

Revenue Finance

Taxes

Excise

Fuel Tires

Sales Tolls Property

Registration Title/License Real Estate

Property

Registration

Title/License

Real Estate

Federal Excise

Fuel

Tires

State

LocalProperty

Sales

General Funds

Tolls

Property

Registration

Title/License

Real Estate

Federal Excise

Fuel

Tires

State

LocalProperty

Sales

General Funds

Tolls

Strong tie to system usage

Weak tie to system usage

IowaRevenue

Video Clipped from Winning MATC sponsored Student Video Competition: Allie Reiter, “Road Scholars”

Would you be in favor of raising the fuel tax?

• Audience question 1

Video Clipped from Winning MATC sponsored Student Video Competition: Allie Reiter, “Road Scholars”

What if you knew you paid $250 per year ($25 per month)?

• Audience question 2

What if the money by law could only be spent on roads?

• Audience question 3

What if some money was spent on transit?

• Audience question 4

Fuel TaxYes29%

No60%Increase Fuel Tax? Yes

29%

Yes15%

No72%

What if you knew you paid $250 per year ($25 per month)?

Yes38%

Yes47%

No41%

What if the money by law could only be spent on roads?

Yes49%

Yes10%

No73%

What if some money was spent on transit?

Yes51%

Total % in favor

n= 1,659

Changing Emphasis on existing taxes

Taxes

Excise

Fuel Tires

Sales Tolls Property

Registration Title/License Real Estate

Alternatives

States with Local Option Sales Taxes

Increase Sales Tax?

• Audience question 5

California’s Experience25 year history

Voters in 20 counties approved Generate $2.5 billion per year

Four featuresSpecify the improvements to be financed

Require direct voter approval

Spent within the counties that enact them

Automatically expire

Sales Tax

Yes18%

No78%

Increase Sales Tax? Yes18%

Yes20%

No72%

Yes34%

Total % in favor

n= 1,614

What if the money by law could only be spent on roads?

Create New Tolls?

• Audience question 6

Increase existing tolls where they exist?

• Audience question 7

Interstate Bridge/Tunnel Tolls

Non-Interstate Bridge & Tunnel Tolls

Interstate Road Tolls

Non-Interstate Road Tolls

Proposed/Financed/Constructing Tolls

Tolling Interstates

• Yesterday...• Long standing prohibition on new tolls for existing Interstate Highways

• Today....• MAP-21 opens the door for tolling both Interstate and Non-Interstate

Highways

• Section 129 general toll program• Section 166 high occupancy toll program

Tolling Interstates & Non-Interstate Highways

• Section 129 general toll program• Allows toll on all new capacity added to the National Highway System

• Revenue used for • Debt service, • Private invest return, • Operations and maintenance, • P3 payments, • Other 23 programs

• Needs annual audits

• No toll agreements between USDOT and State & Local Gov

Tolling Interstates & Non-Interstate Highways

• Section 166 high occupancy toll program• Allows toll on all new capacity added to the National Highway System

• Revenue used for • Same as Section 129

• Must include• Enforcement, • automatic tolling, • tolls vary by congestion, • Interoperable between systems

• Needs annual audits

• No toll agreements between USDOT and State & Local Gov

I-394 in Minneapolis, Minnesota (HOT lanes)

Tolls

Yes31%

No63%

Increase Existing Tolls?

Yes31%

Yes30%

No62%

Yes50%

Total % in favor

n= 965

What if the money by law could only be spent on roads?

Yes32%

No61%

Create New Tolls? Yes32%

Total % in favor

n= 638

Property Taxes

Increase Registration Fees?

• Audience question 8

Registration Fees

Yes31%

No63%

Increase Fees? Yes31%

Yes34%

No57%

Yes53%

Total % in favor

n= 1,623

What if the money by law could only be spent on roads?

Introduce New Taxes

New Taxes/Fees

Mileage Based Charging

Adopt a mileage based user charge?

• Audience question 9

Vehicle w/ OBU

Cellular Data Network

Billing & Dispersal Center

$$

Participants

ParticipantsOver 81,000 eligible candidates volunteered

Enrolled 2,653Completed 2,511Dropped out 5.4%

Matched National DemographicsGender, Age, Education, Income, Commute

Travel Time, Self-identified Political Affiliation

Vehicle Miles Traveled

• Total 22,000,000 miles (8,400 mi/veh)

GPS Accuracy

Total VMTGPS Outage

MilesPercent of

Total

21,566,000 1,626,000 7.54%

Findings: Technology

Technically feasible using currently mature technologies.

•Reliably assigned VMT to federal, state, and local jurisdictions

–99.4% accountability

–No detectable urban or natural canyon effects

–No significant data loss using commercial cellular data

–Mature Technology used o designed and manufactured in the 2005-06 timeframe

Installation equipment into existing vehicles posed a daunting challenge.

• Complex process

Trained, professional installers, required an average of 90 minutes to complete

25% required a follow-up visit8% directly related to installation

1.3% had vehicle incompatibility issues

*OBU connected into electrical system and on-board diagnostic bus

Findings: Participant Acceptance

Perception was positively impacted by experience and exposure

• Initial perception – 42% favorable– 17% negative

• Final perception (10 month exposure)– 70% favorable– 19% negative

Privacy was a significant issue but is not an insurmountable barrier•60% believe – Government will track their travel

•34% want – Minimal travel detail collected

•Still, > 70% stated– The system was reliable, accurate, and fair– Viable replacement of the fuel tax

The ability to audit the accuracy of charges outweighed privacy concerns.

•66% favored– Summary of VMT by jurisdiction, and– Indifferent to oDaily summary, oroMonthly summary

•Strong desire to audit the system for accuracy

VMT Fee

Yes32%

No68%

In favor of a VMT fee?

Yes19%

No81%

What if the vmt fee was tied to your mpg?

n= 1,589

Yes57%

No43%

Would you still be in favor if GPS was used ?

n= 715

Yes45%

Yes45%

Total % in favor

Yes26%

Total % in favor

• Thank you for your attention!