In a new study, the American Transportation Research Institute proposes new transportation funding options and identifies losses exceeding $900 million annually in transportation funding resulting from state and federal fuel tax exemptions. The study identifies an additional $10 billion to $38 billion that could be raised in annual revenues for highway infrastructure.
Those are among several implications for highway funding explored in ATRI’s study — “Defining the Legacy for Users: Understanding Strategies and Implications for Highway Funding” — released Thursday, May 17. In response to numerous state and federal efforts to pursue tolling and highway infrastructure privatization as the answer to the nation’s transportation funding shortfalls, ATRI says its research is among the first to examine highway funding from a system user perspective.
While collection costs for fuel taxes range from 3 to less than 1 percent of revenue, ATRI has documented toll collection revenue-to-cost ratios exceeding 21 percent. “Every state legislator needs to understand that tolling is not an efficient way to improve transportation,” says George Billows, executive director of the Illinois Trucking Association.
The study also highlights the threat to rural America resulting from the push toward tolling and privatization. Rural corridors lack the necessary population densities and financial base to attract private sector investors focused on profit. Yet these same corridors are critical links in the U.S. supply chain, providing essential commodities and connectivity between states and metropolitan areas.
The research proposes that the U.S. Department of Transportation’s mission of providing a seamless transportation network requires holistic funding strategies that ensure continued support of rural corridors rather than focusing solely on high traffic metropolitan routes. “Pursuing funding strategies that knowingly fragment our national transportation system is simply bad business,” says Jack Shawn, senior operations manager for TFE Logistics. “Our products have their genesis in this country’s heartland, and we rely on those same connectors to deliver goods to American consumers.”
As the most efficient and equitable method for raising revenue, the motor fuel tax is recommended as the most effective strategy for increasing transportation funding for the short- to mid-term. To meet the increasing needs, ATRI’s research recommends increasing the fuel tax in conjunction with elimination of numerous costly fuel tax exemptions and diversions from the highway trust fund. In total, the study identifies an additional $10 billion to $38 billion that could be raised in annual revenues for highway infrastructure.
“ATRI’s study identifies many cogent issues which require public dialogue as we chart the future of surface transportation,” says Pat Quinn, co-chairman of U.S. Xpress Enterprises and a member of the National Surface Transportation Policy and Revenue Study Commission. “I look forward to sharing the findings with my fellow commissioners.”
ATRI is the trucking industry’s 501(c)(3) not-for-profit research organization. A copy of the study’s Executive Summary is available online by clicking here.