Self-Financing and Distance-Based Highway Pricing Scheme: State Highway System Perspective

Abstract

A distance-based highway pricing scheme has been considered a means to tackle highway revenue shortfalls as an alternative to the current taxation on motor fuels. To establish fee rates for a distance-based pricing scheme, this study argues that maintenance and management of the highway system be self-financed by its users, who are responsible for maintenance, repair, and rehabilitation of the highway system. Each user’s highway cost responsibility is determined by its vehicle class, road functional class, types and frequency of interventions, and other technical parameters. This paper uses the State Highway Cost Allocation Study (HCAS) tool to analyze expenditures, revenues, and usages of a state highway system to obtain cost borne by various user groups. On the basis of Indiana State Highway data, cost responsibility of each highway user varies between 0.66¢/km and 25.05¢/km among 20-vehicle types. Sensitivity analysis was carried out considering several technical parameters including load equivalency factor, non-load-related impacts on pavement, and minimum requirements for construction and rehabilitation to reveal the reasonable ranges of cost responsibility of different users.