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News from the National Academies
Date: Jan. 23, 2006
Contacts: Patrice Pages, Media Relations Officer
Chris Dobbins, Media Relations Assistant
Office of News and Public Information
202-334-2138; e-mail <news@nas.edu>

FOR IMMEDIATE RELEASE

Fuel Tax Is a Sound Way to Fund Highways in the Short Term,
But Different Long-Term Revenue Sources Are Needed

WASHINGTON -- Fuel taxes can remain the primary funding source for the nation's highways for at least another decade, but eventually replacing them with a system that meters road use and charges drivers accordingly could benefit travelers and the public, says a new report from the National Academies' Transportation Research Board. Although the current funding system helps build and maintain highways and ensures that users pay most of these costs, it does not help transportation agencies alleviate congestion or target investment to the most valuable projects.

"To improve highways, we should rethink the way revenues are raised instead of only increasing them," said Rudolph Penner, senior fellow at the Urban Institute, Washington, D.C., and chair of the committee that wrote the report. "The present highway finance system can remain viable for some time, but the right reforms might give us a system that not only pays for roads, but also allows us to manage traffic flow and ensure that scarce funds are invested in projects with the greatest public benefit."

Drivers could be metered for the use of roads in the same way consumers are for other utilities, such as water and electricity, the report says. While trials will be required to determine the best approach to metering, any system should allow fees to be higher during periods of congestion and to vary depending on vehicle size and weight. The fees could be used to cover the cost of highway maintenance and traffic services such as police. But on crowded urban roads, the fee's major purpose would be to alleviate the intangible cost that each motorist imposes on other travelers by entering a congested road and thereby slowing down other vehicles.

Over the coming decade, states should start imposing tolls -- including a congestion charge -- wherever they would be practical and valuable for managing congestion on expressways and contributing to operating costs. Although current law prevents states from imposing tolls on most federal aid highways, this restriction should be relaxed, the report says. In the long term, state and local highway agencies would start metering road use and charging based on use.

Creating the metering system would take a decade or more, but its evaluation must begin immediately to determine public acceptability, demonstrate costs and benefits, and allow transportation agencies to develop ways to manage and operate the system. In particular, the public and elected officials might be concerned that the new metering system could be used to track individuals' movements, unfairly favor some categories of road users, or be disadvantageous to the poor, the report notes. Agencies developing the system should address these concerns as early as possible, the committee said. Once technically proven and publicly acceptable designs are available, the federal government should support one or more large-scale trials.

Since commuting by car during rush hour would become more expensive and bus travel would be faster and more reliable, more people might decide to use public transportation. Transit agencies could attract more riders and at the same time charge fares that cover a larger share of their costs. Additional broad-based tax support in the form of sales or property taxes could fund expansions of transit services as well, the report says.

Highway agencies should create a joint federal-state program to plan and evaluate new funding systems, the report says. The program's organization and scope should be defined by the National Surface Transportation Policy and Revenue Study Commission, which Congress created in 2005.

The study was sponsored by the U.S. Department of Transportation's Federal Highway Administration, state departments of transportation, and the Transportation Research Board. The Transportation Research Board is a division of the National Research Council, which is the principal operating arm of the National Academy of Sciences and the National Academy of Engineering. The Research Council is a private, nonprofit institution that provide science and technology advice under a congressional charter. A committee roster follows.

Copies of The Fuel Tax and Alternatives for Transportation Funding will be available in the early spring from the Transportation Research Board's Business Office; tel. 202-334-3213 or on the Internet at http://www.trb.org. Reporters may obtain a pre-publication copy from the Office of News and Public Information (contacts listed above).

[ This news release and report are available at http://national-academies.org ]


TRANSPORTATION RESEARCH BOARD

Committee for the Study of the Long-Term Viability of Fuel Taxes for Transportation Finance

Rudolph G. Penner (chair)
Senior Fellow
Urban Institute
Washington, D.C.

Carol Dahl
Professor
Division of Economics and Business
Colorado School of Mines
Golden

Martha Derthick
Julia Allen Cooper Professor
Department of Government and Foreign Affairs
University of Virginia (retired)
Charlottesville

David J. Forkenbrock
Director
Public Policy Center
University of Iowa
Iowa City

David A. Galt
Executive Director
Montana Petroleum Association
Helena

Shama Gamkhar
Assistant Professor of Public Affairs
Lyndon B. Johnson School of Public Affairs
University of Texas
Austin

Thomas D. Larson*
Transportation Consultant
Lemont, Pa.

Therese J. McGuire
Professor of Management and Strategy
Kellogg School of Management
Northwestern University
Evanston, Ill.

Debra L. Miller
Secretary
Kansas Department of Transportation
Topeka
5
Michael Pagano
Professor of Public Administration, and
Director
Public Administration Graduate Program
College of Urban Planning and Public Affairs
University of Illinois
Chicago

Robert W. Poole Jr.
Director of Transportation Studies
The Reason Foundation
Los Angeles

Daniel Sperling
Professor and Director
Institute of Transportation Studies
University of California
Davis

James T. Taylor II
Managing Director
Public Finance Department
Bear Stearns & Company Inc.
New York City

Martin Wachs
Professor of Civil and Environmental Engineering, and
Professor of City and Regional Planning
University of California
Berkeley

STAFF

Joseph R. Morris
Study Director


* Member, National Academy of Engineering