Donor states and donee states: investigating geographic redistribution of the US federal-aid highway program 1974–2008

In 2009, the US government spent more than $42 billion on the federal-aid highway program. Most of this money was raised from motor vehicle taxes, whose proceeds are deposited in the highway trust fund. Federal motor vehicle user taxes flow into the fund and aid expenditures flow out from it to build and maintain highways and other transportation infrastructure. With so much money at stake it should be no surprise that expenditure decisions are the subject of intense political debate. Chief among these debates is the conflict between donor states, whose residents pay more in highway user taxes than the state receives in federal highway aid and donee states, whose residents pay less in highway user taxes than the state receives in highway aid. While this geographic redistribution has been masked recently by infusions of general fund revenue into the trust fund, the debate nevertheless continues. This paper attempts to understand why some states are donors and others are donees by simultaneously testing four hypotheses about the geographic redistribution of federal highway dollars that relate to a state’s highway need, economic condition, level of urbanization, and representation on the key Congressional oversight committees. The analyses show that redistribution does not favor states with larger highway systems, more highway use, or lower median incomes, all of which are different indicators of need. Instead, states that are less urban and better represented on the four key Congressional committees generally benefit from redistribution. These findings indicate that the user tax revenues are not used in places where they are most needed. Thus they provide little empirical support for any compelling policy argument for continued geographic redistribution of federal highway user tax dollars.     

Highway finance and the private sector: Issues and alternatives

Private participation in all aspects of transportation has been prevalent throughout the history of the United States. The U.S. approach to transportation finance evolved from European influence. Particularly, the English economist Adam Smith described the role of public works in facilitating national commerce. The notion of user charges or tolls as opposed to general revenue as the source of financial support was offered as a means for constructing and maintaining roads. Highway and transportation development has undergone significant changes in the last few decades. The 1970s ushered in an era of escalating costs of highway development and maintenance. Dependency on imports of foreign oil, global economics, and related events affecting the supply and demand of motor vehicle fuel have had dramatic effects on contemporary means of funding highway programs in the U.S. In responses to this funding dilemma states highway officials began exploring various alternatives for funding transportation improvements. The role of transportation agencies has changed in emphasis since the 1950s. A variety of financial, legal, and logistical issues have forced governments to closely evaluate options for transportation development and finance. State responses to these issues vary. However, there remain a variety of funding alternatives including financing districts, impact fees, tax increment financing, toll financing, and private sector funding.     

Charge timing choice behavior of battery electric vehicle users

This paper aims to examine choice behavior in respect of the time at which battery electric vehicle users charge their vehicles. The focus is on normal charging after the last trip of the day, and the alternatives presented are no charging, charging immediately after arrival, nighttime charging, and charging at other times. A mixed logit model with unobserved heterogeneity is applied to panel data extracted from a two-year field trial on battery electric vehicle usage in Japan. Estimation results, obtained using separate models for commercial and private vehicles, suggest that state of charge, interval in days before the next travel day, and vehicle-kilometers to be traveled on the next travel day are the main predictors for whether a user charges the vehicle or not, that the experience of fast charging negatively affects normal charging, and that users tend to charge during the nighttime in the latter half of the trial. On the other hand, the probability of normal charging after the last trip of a working day is increased for commercial vehicles, while is decreased for private vehicles. Commercial vehicles tend not to be charged when they arrival during the nighttime, while private vehicles tend to be charged immediately. Further, the correlations of nighttime charging with charging immediately and charging at other times reveal that it may be possible to encourage charging during off-peak hours to lessen the load on the electricity grid. This finding is supported by the high variance for the alternative of nighttime charging.     

Measuring the equity effects of a carbon charge on car commuters: A case study of Manchester Airport

This papers attempts to quantify the equity effect of a hypothesized economic instrument, a carbon charge on car commuters, for reducing carbon dioxide emissions produced by commuters on airport surface access. Manchester Airport is taken as a case study using staff Survey data from 2008 and 2010. Consumer welfare change is analysed for measuring the equity effects of carbon charge by user group, which considers the changes of travel mode choice, the carbon dioxide emissions reduction, the revenue from a carbon charge and how it is distributed. First, the individual carbon footprint in terms of gram passenger kilometre, and the damage cost of carbon by commuters on airport surface access are estimated. Next, the impact of carbon charge on travel behaviour is investigated by the nested logit model. Finally, the net effect of carbon charges is assessed by travel mode user, gender, job type, and age group. The results show some impacts of the carbon charge on car users and carbon reduction, and the positive effects on lower income group and less carbon commuters. The quantified results provide the evidences for the mitigation policies to combine monetary incentives with disincentives for travel behaviour change, and demonstrate the different equity effects among commuter groups.     

Validity of weight-distance concept as a basis for highway taxation

Using an equity criterion based upon the cost-occasioned user charge principle, this article examines the validity of the weight-distance concept as a basis for highway user taxation. Two conditions that affect the validity of the weight-distance concept are identified. Four major areas, where the validity of the concept may be questioned, are singled out for discussion. In the conclusion, recommendations on the use of the weight-distance concept for highway taxation are presented.     

Taxation and revenue policies for future federal highway programs

In a word of tight budgets and growing investment needs, the question of how highways of national significance will be financed in the future has never been more important. This paper provides a background for addressing this question by tracing the development of current Federal highway tax and revenue policies, describing recent trends in Federal highway finance, and discussing several limitations on the productivity of existing Federal highway revenue sources. Principles of taxation that can be used to guide the search for future revenue sources are then described, current Federal highway user fees are reviewed within the context of those principles, and the additional revenue potential of the existing highway tax structure is discussed. Potential alternative sources of highway revenue are then discussed and selected alternative funding mechanisms are described.     

Why experience changes attitudes to congestion pricing: The case of Gothenburg

Many cities have seen public support for congestion charges increase substantially after charges have been introduced. Several alternative explanations of this phenomenon have been suggested, but so far little evidence has been available to assess the relative importance of these explanations. We study attitudes to congestion pricing in Gothenburg before and after congestion charges were introduced in January 2013. Attitudes to the charges did indeed become more positive after the introduction, just as in previous cities. Using a two-wave postal survey, we separate contributions to the attitude change from a number of sources: benefits and costs being different than anticipated, use of hypothecated revenues, reframing processes, and changes in related attitudes such as attitudes to environment, equity, taxation and pricing measures in general. We conclude that the dominant reason for the attitude change is status quo bias, rather than any substantial changes in beliefs or related attitudes, although some of these factors also contribute. Contrary to a common belief, nothing of the attitude change is due to benefits being larger than anticipated.     

Causal linkages between highways and sector-level employment

While transport infrastructure investments have usually been viewed to have long-term impacts on employment, what is perhaps not immediately clear is the direction of causality. This paper has sought to disentangle the causal relationship between highway infrastructure and employment, using panel data for the 48 contiguous US states from 1984 to 1997. Of particular emphasis in this analysis is the sectoral differences in the causal and spatial effects of highway capacity expansions for employment growth in alternative sectors of the economy. The results indicate that lane-mile additions of own-state major highways could increase state employment growth in the services sector while reducing growth in manufacturing. However, the causal relationship is also found to work the other way around. That is, both the rapid growth in services employment and the slowdown in manufacturing jobs temporally lead to increases in roadway capacity of non-interstate major roads. Our analysis also shows that highway infrastructure could produce both positive and negative employment spillovers across states. We find that improvements in non-interstate major roads outside the state border are beneficial to the manufacturing sector which generally serves regional and national markets. For the services sector, however, employment gains from interstate highways in the same state may come at the expense of other states as there is clear evidence of negative employment spillovers from interstate lane-mile additions.     

Transit pricing research

Several decades of research on transit pricing have provided clear insights into how riders respond to price changes in both the transit and automobile sectors. For the most part, riders are insensitive to changes in either fare levels, structures, or forms of payments, though this varies considerably among user groups and operating environments. Since riders are approximately twice as sensitive to changes in travel time as they are to changes in fares, a compelling argument can be made for operating more premium quality transit services at higher prices. Such programs could be supplemented by vouchers and concessionary programs to reduce the burden of higher fares on low-income users. Also, cross-elasticity research suggests that higher automobile prices would have a significantly greater affect on ridership than lower fares. Most research on transit fare structures shows that the common practice of flat fares is highly inequitable, penalizing short-distance and off-peak users. Free fare programs have proven quite costly for each new transit user attracted and have rarely lured motorists to transit. Free fares limited to downtowns have been more successful than systemwide free fare programs. While prepayment schemes have met with success in the U.S. and Europe, honor fares have suffered from excessive revenue losses in at least one case in the U.S. Some of the more noteworthy fare policy successes in North America have been Bridgeport's combined pass-fare program, Allentown's deep discounts, Ottawa's major fare reduction and differentiation, and Columbus's substantial midday discount. As paratransit and other new transit alternatives to conventional bus continue to emerge, new, more differentiated fare practices can be expected in the future.     

An evaluation of national road user charging in England

This paper explores the effects of road user charging throughout England. It develops a model to test charging scenarios including revenue raising and revenue neutral charging options, and economically efficient pricing. For each scenario we estimate effects on traffic volumes, user charges and fares, subsidies, environmental costs, benefits to consumers, government revenue, and overall net benefits. We show that appropriate charging structures coupled with compensating reductions in existing motoring taxes can make a real difference to traffic growth, congestion and environmental damage, and can relieve pressure to build new roads.     

Reaching decisions about technological projects with social consequences: A normative model

Among the crises facing our society is the public's loss of confidence in technical professionals and their ability to make decisions about large-scale projects (such as highways) in the public interest. To overcome this crisis of confidence, this paper hypothesizes a model for the role of the technical professional in the process of reaching decisions about public actions.In evaluating technological projects with social consequences, one key issue is the differential incidence of impacts. Typically, some groups are hurt in order that others may benefit. Social equity must be considered explicitly. Such presently-used techniques as benefit-cost analysis and point-rating schemes are unsatisfactory. New techniques are needed, reflecting a more comprehensive model for the role of the technical team in the political process.A normative model is outlined. First, the objective of the technical process is defined: to achieve substantial effective community agreement on a course of action which is feasible, equitable, and desirable. Second, a process for achieving this objective is proposed. A key element of this process is a four-phase strategy of technical and community interaction activities to achieve the objective. The basic premise of this approach is that the role of the technical team is to clarify the issues of choice, to assist the community in determining what is best for itself.This theoretical model has resulted in several practical products. A procedural guide for use by highway and transportation agencies has been prepared, and a number of specific operational techniques have been developed and are included in the guide. The procedural guide is now being field-tested in several state highway departments. The theoretical model has already been useful in identifying, in one highway department, opportunities for significant changes in the agency's mission, organization and procedures to enable it to be more responsive to public concerns. The theoretical model also has served as the basis for the development of federal guidelines for consideration of social, economic and environmental factors in highway planning and decision-making, in all of the state highway departments in the U.S.This is a revised version of a paper presented to the Seventeenth North American Meeting, Regional Science Association, November 6–8, 1970.     

Asymmetric responses of highway travel demand to changes in fuel price: An explanation via fuel price uncertainty

Previous research has examined asymmetric effects of fuel price uncertainty on energy demand. If we consider that energy demand is related to travel demand, the changes in fuel prices may have asymmetric effects on highway travel demand via fuel price uncertainty. In other words, when in general fuel price is steadily rising, the highway traffic volume decreases by a small percentage. On the other hand, the highway traffic volume increases by a large percentage when fuel prices are falling. We hypothesize that the uncertainty in fuel prices generates this kind of asymmetric effect on highway traffic volume in Korea. We use the Korean monthly fuel price and highway traffic volume data from 2001 to 2009, and define the intra-month (weekly) fuel price changes as monthly fuel price volatility which is a proxy for monthly fuel price uncertainty. We found that the direction of the change in fuel prices had asymmetric effects on highway travel demand and that the fuel price uncertainty led drivers to respond asymmetrically to the changes in fuel prices.     

Distance and time based road pricing trial in Dublin

The objective of the work was to evaluate the potential user response to distance and time based road pricing of a sample of individuals drawn randomly from a group of volunteers in Dublin. The road use pricing charge levels were selected to match the marginal external costs of car transport i.e. those costs not currently paid by the car user. Such costs include marginal external costs of congestion, air pollution and noise. The project formed part of the EU DGXVII EUROPRICE project where one of the objectives was to evaluate the impact of road use pricing on private transport demand. Estimates of the marginal external costs of car travel had been previously made for Dublin in an EU DGVII project entitled TRENEN II STRAN and the results were used to select the road pricing charges in the trial. The distance travelled and travel time of a particular individual's work trip were noted. Charges per unit distance and time were applied so that the individual would incur a total charge for their average peak period work trip of 6.4 euro; the average marginal external cost of a peak period trip in Dublin, as estimated by the TRENEN model. Although the sample of individuals was relatively small, the indications from the results are worthy of note and further investigation on a larger sample. A significant reduction in the number of peak period trips was evident, of the order of 22%, resulting from trip suppression and transfer to other modes. This revised version was published online in June 2006 with corrections to the Cover Date.     

Environmental charges in airline markets

Over the last two decades many airline markets have been deregulated, resulting in increased competition and use of different types of networks. At the same time there has been an intense discussion on environmental taxation of airline traffic. It is likely that an optimal environmental charge and the effects of a charge differ between different types of aviation markets. In this paper, we derive optimal flight (environmental) charges for different types of airline markets. The first type of market is a multiproduct monopoly airline operating either a point-to-point network or a hub-and-spoke network. The optimal charge is shown to be similar in construction to an optimal charge for a monopolist. We also compare the environmental impact of the two types of networks. Given no differences in marginal damages between airports we find that an airline will always choose the network with the highest environmental damages. The second type of market we investigate is a multiproduct duopoly, where two airlines compete in both passengers and flights. The formulation of the optimal charge is similar to the optimal charge of a single product oligopoly. However, we also show that it is, because of strategic effects, difficult to determine the effects of the charge on the number of flights.     

The Gothenburg congestion charges: cost–benefit analysis and distribution effects

This paper performs an ex-post cost–benefit and distribution analysis of the Gothenburg congestion charges introduced in 2013, based on observed effects and an ex-post evaluated transport model. Although Gothenburg is a small city with congestion limited to the highway junctions, the congestion charge scheme is socially beneficial, generating a net surplus of €20 million per year. From a financial perspective, the investment cost was repaid in slightly more than a year and, from a social surplus perspective, is repaid in < 4 years. Still, the sums that are redistributed in Gothenburg are substantially larger than the net benefit. In the distribution analysis we develop an alternative welfare rule, where the utility is translated to money by dividing the utility by the average marginal utility of money, thereby avoiding putting a higher weight on high-income people. The alternative welfare rule shows larger re-distribution effects, because paying charges is more painful for low-income classes due to the higher marginal utility of money. Low-income citizens pay a larger share of their income because all income classes are highly car dependent in Gothenburg and workers in the highest income class have considerably higher access to company cars for private trips. No correlation was found between voting pattern and gains, losses or net gain.

     

The impact of terminal handling charges on overall shipping charges: an empirical study

Before the introduction of terminal handling charges (THCs), traditional freight rates included both ocean freight charges and terminal charges at ports. Since the introduction of THCs in 1991, the freight rate has become a “port-to-port” charge that covers only the sea leg, while the on-shore costs of using the container terminals are charged separately as THCs. Although both THCs and freight rates are collectively set by conferences, in this study we argue that the former are easier to enforce because they are invariant to other attributes such as haulage distance, inland transport services and types of commodity being shipped. This argument is consistent with the empirical findings from this study that suggest the separation of ocean freight rates from terminal charges has increased the overall shipping charges. In addition, we find that THCs affect the Hong Kong container handling industry by lowering its throughput.     

Auction-based highway reservation system an agent-based simulation study

Based on previous studies of a highway reservation system, this paper proposed an auction-based implementation, in which the users can bid for the right to use a route during a certain period of time. This paper models the auction system with MATSim using an agent-based simulation technique. The agents adopt their own bidding logic in the auction, and the price converges after around 130 iterations, when the number of users using the reserved highway and the total collected revenue become stable. When the overall demand changes, the collected revenue ranges from 5 to 11 dollars per user, and from 0.7 to 1.5 dollars per mile. The auction system can transfer more consumer surplus to the toll road operators, since it is a personalized tolling mechanism. The users are using the reservation system as insurance of a guaranteed congestion-free travel. The auction-based highway reservation shows great potential as a new traffic management system.     

Efficiency and equity issues in special fees for financing transportation infrastructure

Theoretically, charges for building and operating facilities and services should be efficient (proportional to one's use of or benefit derived from the service) and equitable (proportional to one's ability to pay). A number of “innovative” financing techniques have been used recently, whereby the private sector (developers, property owners, businesses, and users) pays entirely or partially for the cost of building and operating transportation facilities or services. These techniques are particularly popular when the impact from the land use developments on the transportation system is such that substantial improvements are warranted in order to avoid serious congestion problems. The purpose of this paper is to investigate special fee assessments (a popular sub-set of “innovative” financing techniques) used for financing highway and mass transportation in order to determine their efficiency and equity implications. The need for such an investigation arises from the fact that everyone residing or doing business in a particular area does not benefit equally from a given transportation system, and neither is everyone able to contribute equally toward that system's building and operation. This paper presents some of the most commonly used special fee assessment techniques and suggests fee structures that are “optimal” on the basis of the benefits that contributors derive from the given transportation system, as well as their ability to pay for it.     

A dynamic modeling approach to investigate impacts to protected and low-income populations in highway planning

Environmental justice (EJ) assessment has traditionally focused on identifying distributive effects to protected populations. Federal and State highway improvement programs have been established to stimulate economic development for these populations. While this issue has long been recognized as part of EJ initiatives, no quantitative comparisons of highway construction impacts on protected populations have been reported in the literature. This paper presents a dynamic modeling approach to investigate impacts to protected and low-Income populations in highway planning using an integrated Geographic Information System (GIS) and Genetic Algorithms (GAs) optimization framework. Using census and county level parcel data, the model integrates various socioeconomic factors into a GIS while generating highway alignments using GAs. Examples using county level census data from North Carolina are demonstrated to test the sensitivity of generated highway alignments with constrained distances from protected populations. The results indicate that it is important to consider local social and economic effects, in addition to regional planning objectives when measuring the effectiveness of feasibility studies associated with highway construction. Within the proposed modeling framework attention is directed on various EJ initiatives, such as environmental health and safety laws in minority and low-income areas. The model would help planners, designers, and policy-makers understand the intricate interrelationships among local communities, while facilitating more scientific and economically equitable planning for highway construction projects.     

Strategies for managing highway transportation professional needs

Growth in highway spending and the loss of approximately one-third of the nation's professional engineers in state highway agencies will create significant problems and opportunities over the next decade. Careers in transportation will be attractive, rewarding and interesting, with promise for growing responsibility and advancement. This paper describes the dimensions of the problem and suggests approaches that should result in dynamic future-oriented organizations. Recruitment, education and training, compensation, professional satisfaction, skill requirements and other aspects of human resources management must be carefully matched to meet changing needs and skill requirements.