Financing Transportation Networks

Financing Transportation Networks

Transport Economics, Management and Policy series

David M. Levinson

Pollution, alternative fuels, congestion, intelligent transportation systems, and the shift from construction to maintenance all call for a reconsideration of the existing highway revenue mechanisms, especially the gas tax. David Levinson explores the fundamental theoretical basis of highway finance, in particular the use of tolls, and supports that theory with empirical evidence. The author examines highway finance from the perspective of individual jurisdictions and travellers, and considers their interactions rather than specifying a single optimal solution. Congestion pricing has long been a goal of transportation economists, who believe it will result in a more efficient use of resources. Levinson argues that if the governance were to become more decentralized, and collection costs continue to drop, tolls could return to prominence as the preferred means of financing roads for both local and intercity travel. An approach that creates the local winners necessary to implement road pricing is required before it can be expected to become widespread.

Chapter 13: Summary and Conclusions

David M. Levinson

Subjects: economics and finance, public finance, transport, environment, transport, urban and regional studies, transport

Extract

INTRODUCTION A reconsideration of the existing highway revenue mechanisms, in particular the gas tax, is in order. The original decision to utilize the gas tax for highway finance relied upon certain underlying fundamental conditions. This book’s introductory chapter identified several key changes under way that challenge the assumptions that were in place when the decision to employ gas taxes was made. These changes include the increasing importance of social costs, the shift in the vehicle fleet toward alternative fuels or electric power, the rise of congestion, the scarcity of financial resources and resistance to general taxation, the emergence of new, intelligent transportation technologies and electronic toll collection, and changing priorities (from construction to maintenance) associated with a mature technology while America’s highway finance system favors ribbon cutting to repairs. The prospects for the future success of toll roads depend on several factors, in particular the relative centralization of control of the highway sector and the costs of collecting revenue. This book has shown that if the governance were to become more decentralized, and collection costs continue to drop, tolls could return to prominence as the preferred means of financing roads for both local and intercity travel. Success further depends on the choices about what to do with toll revenue, whether they are in lieu of existing revenues or in addition to them. Proposals to price road use for infrastructure financing, congestion mitigation, or air quality improvement have been surfacing regularly over recent years. Congestion pricing has long been a goal...

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