Road User Fees Research Articles

How to achieve less emissions from freight transport in Sweden

Purpose For the case of Sweden, this paper aims to determine how a range of different infrastructure fees and taxes influences modal split, port throughputs, air emissions, societal costs of greenhouse gas (GHG) emissions and air pollution, as well as logistics costs. Design/methodology/approach The Swedish national freight model is used to simulate a range of different proposed infrastructure fees, one by one and in combination. The volume of emissions of CO2-equivalents, NOx, SOx and PM under the different scenarios is calculated in both volume and monetary terms, by applying national emission factors and EU values for external costs. Findings Road user fees are calculated to have the largest impact on the modal split, GHG emissions and air pollution. The impact increases slightly when road user fees are combined with higher fees for sea and rail and/or gate fees in all Swedish ports. The imposition of gate fees over €30 per truck in all ports leads to shifts in cargo to land-based modes and to ports outside Sweden. The logistics costs in Sweden are found to be three to ten times higher than the benefits of reduced GHG emissions and air pollution, although other benefits to society need to be considered as well. Research limitations/implications Methods which attempt to evaluate alternative approaches to the internalisation of the external costs caused by transport need to be further developed. In particular, they need to encompass a more holistic perspective on “benefits to society”, other than merely reductions in GHG emissions and air pollution. To facilitate international acceptance and adoption, such methods require agreements to be reached on common definitions and routines. Practical implications The results can be used as basis for policy-making. They illustrate the environmental impacts of the fees and taxes one by one and in combination and to what extent these reinforce each other and should be co-ordinated. Social implications The outcomes are relevant to national and international policymakers and authorities, as well as port authorities, shippers and transport companies who need to determine unilateral strategies on how to reduce GHG emissions and air pollution, without undermining their wider business objectives. Originality/value The approach is original in facilitating the testing of policies which impact on the transport system and the environment across different dimensions. The work has additional value in informing policy because of its use of Sweden’s national freight transport model.

What Explains the Recent Calls for the Reinstatement of a Tax Considered Unpopular? An Analysis of Graduated Tax in Uganda

Successful decentralization relies heavily on the ability of subnational government to generate its own revenue. In many African countries, subnational government is authorized to collect a variety of taxes and user fees, including trade licensing taxes, property taxes, market fees, garbage collection fees and road user fees. With the exception of property taxes, which have the potential to generate significant revenue, most other taxes collectively fund a small proportion of subnational government budgets. Until recently, one of the main sources of own revenue for subnational government in Uganda was a poll tax known as graduated tax. Tanzania and Kenya had a similar tax, referred to respectively as the development levy and graduated personal tax. However, the tax was abolished in Kenya in 1974, in Tanzania in 2003 and in Uganda in 2005. The reasons for abolishing the tax in the three countries were similar, and included the fact that it relied on coercive enforcement, the costs of collection were high and it disproportionately affected the poor. In Uganda, however, there have recently been calls - within and outside government - for the reintroduction of the tax. This paper seeks to answer the question :what explains the calls for the revival of a tax that was largely unpopular? There are two main explanations. First, graduated tax was the main source of revenue for local government in Uganda and there has been no adequate replacement for it. Second, the tax was a symbol of pride for some men and encouraged economic productivity. Women, particularly in the rural areas, feel that its abolition reduced such productivity.

Highway-user fees for overweight trucks: Consequences of deviations from the fourth-power law

ABSTRACTIn updating road-user fees, highway agencies are motivated by the twin objectives of equity and efficiency. The concepts of marginal pavement consumption cost (MPCC) and the fourth-power law have been used in past research in a bid to establish efficient and equitable user fees. Over the past few decades, the use of the fourth-power law has faced some criticism that the actual power of the relationship between loading and pavement deterioration deviates significantly from 4.0. In addressing this issue, this article presents a methodology that investigates the consequences of the power variations to the estimated MPCC and the distributional (equity) impacts of road-user fees for overweight (OW) trucks. The methodology incorporates practical schedules of highway maintenance, rehabilitation, and reconstruction. The analysis suggests that there are extremely small differences between the MPCC values that result from using different values of the exponent in the power law. However, different values of the exponent in the power law result in significantly different equity impacts. This article demonstrates that the equity impacts are moderate in the case of OW trucks whose individual axles are loaded close to standard axle weights. For OW trucks that are loaded within 10% of the maximum permissible weight, this article estimates that variation of the power value from 3.0 to 5.0 results in a 1%–10% surplus or deficit of their road-user charges.

Road User Fees Instead of Fuel Taxes: The Quest for Political Acceptability

In light of recent regulatory changes in federal fuel economy standards for cars and trucks, the consensus forecast is that motor fuel taxes will not be an adequate source of dedicated funding for roadway maintenance and construction. This article accepts the notion that mileage fees are a promising replacement for the fuel tax and considers steps that might be taken to enhance the political acceptability of such a reform. The authors argue that simple, low‐tech ways of implementing mileage fees are possible in the near term and should be complemented by a well‐developed audit mechanism. Current trends in the automotive and auto insurance industries as well as social media are likely to reduce opposition to more technologically advanced mileage taxes in the long run.

Vehicle Mileage Fee on Income and Spatial Equity

Because of concern about the declining purchasing power of gas tax revenue due to inflation, public opposition to tax increases, and the improved fuel efficiency of new vehicles, the 2001 Oregon legislature created the Road User Fee Task Force (RUFTF) to make recommendations for a potential replacement for the gasoline tax. This paper estimates the distributional impact of the statewide vehicle miles traveled (VMT) fee policy proposed by the RUFTF on individuals with different incomes and residential locations. The methodology employs both vehicle ownership and type choice models and regression-based vehicle use models. This allows an examination of both short- and long-run responses from the affected households. The measures of the distributional impact of the proposed VMT fee include changes in consumers’ surplus, fee-collection agency revenue totals, and overall welfare changes by income and location groups. The results show that the distributional effects of a $0.012/mi flat VMT fee are not significant in either the short or long run and suggest that distributional concerns should not be a hindering factor in the future implementation of the proposed VMT fees.

An RFID-Enabled Road Pricing System for Transportation

Fuel efficiency of Oregon's automobile fleet has eroded fuel tax revenues over the past 30 years. Further improvement of automobile fuel efficiency, particularly with the adoption of the hybrid electric vehicle engine, will have an even more dramatic effect on fuel tax revenues in the near future. In 2003, Oregon State University in collaboration with the Oregon Department of Transportation and the Road User Fee Task Force began investigating a vehicle miles traveled-based alternative to the fuel tax. The culminating phase of this four year effort was the execution of a pilot test involving approximately 250 volunteer drivers. The objective of this paper is to discuss the lessons learned in the design, development, and testing of the vehicle miles traveled-based technology configuration used to support Oregon's pilot test, especially the challenges faced with the use of radio frequency identification technology to identify and collect vehicle miles traveled data from equipped vehicles.

Technology Evaluation of Oregon's Vehicle-Miles-Traveled Revenue Collection System

Many states in the United States rely on fuel taxes to maintain roads. In 2005 eighty percent of Oregon's road revenues depended either directly or indirectly on fuel taxes. However, Oregon has seen this flow of revenue slowly decline during the past 30 years. It is envisioned that further improvement of automobile fuel efficiency will have an even more dramatic effect on fuel tax revenues in the near future. In 2001 the Oregon Legislative Assembly passed House Bill 3946 mandating the Oregon Department of Transportation to examine alternatives to the current system of taxing highway use through fuel taxes. Since 2003 Oregon State University, in collaboration with the Oregon Department of Transportation and the Road User Fee Task Force, has investigated a vehicle miles traveled (VMT)-based alternative to the fuel tax. The design, development, and testing of the VMT-based solution was broken down into several phases, the last of which required the execution of a pilot test from June 19, 2006, to March 25, 2007, involving approximately 250 volunteer drivers. The main objectives of this paper are to present the technology performance results of the VMT-based solution gathered during the pilot test and to share the lessons learned from its subjective evaluation.

Don't Increase Federal Gasoline Taxes - Abolish Them

Many experts believe that gasoline taxes should be increased for a variety of reasons. Their arguments are unpersuasive. Oil is not disappearing, and when it becomes more expensive, market agents will substitute away from gasoline to save money. The link between oil price shocks and recessions, although real in the 1970s, has been much more benign since 1985 because of the termination of price controls. Market actors properly account for energy costs in their purchasing decisions absent government intervention. Pollution taxes, congestion fees, and automobile insurance premiums more closely related to vehicle miles traveled are better remedies for the externalities associated with automobile travel than a simple fuel tax. Gasoline consumption does not necessarily distort American foreign policy, impose military commitments, or empower Islamic terrorist organizations. State and federal gasoline taxes should be abolished. Local governments should tax gasoline only to the extent necessary to pay for roads when user charges are not feasible. If government feels compelled to more aggressively regulate vehicle tailpipe emissions or access to public roadways, pollution taxes and road user fees are better means of doing so than fuel taxes. Regardless, perfectly internalizing motor vehicle externalities would likely make the economy less efficient - not more - by inducing motorists into even more (economically) inefficient mass transit use. The arguments advanced against increasing gasoline taxes are applicable to the broader discussion about America's reliance on oil generally. The case for policies designed to discourage oil consumption is nearly as threadbare as the case for increasing the gasoline tax - and for largely the same reasons.

Performance evaluation of an RFID-based vehicle-miles-travelled revenue collection system

In 2001, Oregon State University (OSU) in collaboration with the Oregon Department of Transportation and the Road User Fee Task Force (RUFTF) began investigating a Vehicle Miles Travelled (VMT)-based alternative to the fuel tax. The culminating phase of this five year effort is the execution of a pilot test involving approximately 280 volunteer drivers. A specific VMT-based technology, referred to as the Pilot Test Technology Configuration (PTTC) will be used in the pilot test. This paper discusses the lessons learned in the design and development of the PTTC, especially the challenges faced with the use of RFID technology to identify and collect VMT data from equipped vehicles.

Development and Performance Evaluation of a Revenue Collection System Based on Vehicle Miles Traveled

The State of Oregon is heavily dependent on fuel tax revenues to maintain roads. Several technological developments, including the introduction and use of more fuel-efficient vehicles, will have a dramatic effect on fuel tax revenues in the near future. In response to these trends, Oregon House Bill 3946 mandates that the Oregon Department of Transportation (ODOT) begin implementing pilot systems to test alternatives to the current system of taxing highway use through fuel taxes. The Road User Fee Task Force (RUFTF) was created as part of the bill with the mission of developing a revenue collection design funded through user pay methods, acceptable and visible to the public, that ensures a flow of revenue sufficient to annually maintain, preserve and improve Oregon's state, county and city highway and road system. One alternative being considered by the RUFTF employs a fee based on vehicle miles traveled (VMT). This paper describes the development of two working VMT-based prototype technology configurat...

Development and Performance Evaluation of a Revenue Collection System Based on Vehicle Miles Traveled

The State of Oregon is heavily dependent on fuel tax revenues to maintain roads. Several technological developments, including the introduction and use of more fuel-efficient vehicles, will have a dramatic effect on fuel tax revenues in the near future. In response to these trends, Oregon House Bill 3946 mandates that the Oregon Department of Transportation (ODOT) begin implementing pilot systems to test alternatives to the current system of taxing highway use through fuel taxes. The Road User Fee Task Force (RUFTF) was created as part of the bill with the mission of “developing a revenue collection design funded through user pay methods, acceptable and visible to the public, that ensures a flow of revenue sufficient to annually maintain, preserve and improve Oregon's state, county and city highway and road system.” One alternative being considered by the RUFTF employs a fee based on vehicle miles traveled (VMT). This paper describes the development of two working VMT-based prototype technology configurations. This development effort was necessary because commercial-off-the-shelf technology with the functionality required by RUFTF was not available. Multiple concepts for on-vehicle mileage collection devices (using both odometer and Global Positioning System technology) and systems for fee calculation and collection were developed, integrated, and tested as part of the two prototype technology configurations. Results indicate that a VMT-based fee collected via radio frequency communications at service stations is technologically feasible.

Transportation Utility Fee: Oregon Experience

Ten Oregon agencies have adopted transportation utility fee (TUF) programs to augment shrinking roadway maintenance revenues. Four additional agencies are investigating the feasibility of TUF programs this year, which would generate about $6,000 per road mile annually through this new mechanism. Clackamas County (population 345,000), in the process of investigating a transportation maintenance fee (TMF) program, will become the largest agency in the state with this type of finance system if the fee is adopted. Initial annual revenue estimates were $20 million for eligible maintenance activities, but these were scaled back to $4.2 million through the public review process. If adopted, this funding shift could provide opportunities to transfer a portion of the gas tax funds to capital project investments, which are substantially underfunded. The TMF development process in Clackamas County included a convergence of traditional travel demand forecasting with near-term traffic impact techniques to create a road user nexus at a parcel level. To accomplish this, trip estimates were done with ITE methods with a cross-check of the regional travel demand model. A major challenge was to make a reasonable assessment of travel activity for every building in the county. Each of the 97,000 residential and 7,000 nonresidential tax lots was evaluated by using tax assessment and state employment records to estimate travel activity and proportionately allocate fees. Lessons learned in this project include the trade-offs between road user fee market value and technical and legal defensibility and justification for better interagency land use data organization.

Extent to Which User Fees Cover Road Expenditures in the United States

The extent to which road users pay, through user fees, the full cost of the infrastructure and services they consume has been an issue for several decades. In contrast to most previous studies, a recent American Petroleum Institute (API) report concludes that payments by road users exceed direct government road expenditures by 50 percent. The API study points out that conventional accounts of road finance data report only revenues used for highways, thereby excluding funds from other automobile-related transactions (such as vehicle sales taxes) that are not specifically spent on roads. Two major issues with the accounting methodology used by API are identified: incorrect attribution of general taxes as user fees and neglect of various road-related costs. Combined, these shortcomings inflate the revenue side of the ledger and hold down the expenditure side. A more detailed accounting of the revenues generated by road users as well as the public costs, both direct and indirect, that are attributable to the road system and its use is presented. Reexamination of the 1992 accounts indicates that total public expenditures on road-related items were $97.2 billion, whereas public revenues specifically raised from road users amounted to $75.5 billion. The result is a gap of $21.7 billion that was spent on road-related items that were not covered by road user fees. Thus, road user fees covered only 78 percent of public road-related costs in the United States in 1992.