USDOT REPORT Highway Cost Allocation Study favors tolls

USDOT REPORT

Highway Cost Allocation Study favors tolls

The “1997 Federal Highway Cost Allocation Study” (FHCAS), the first effort in 15 years to examine the vexing political and economic question of whether US roads are priced right. The enviros and the transit lobby attack roads as being grossly subsidized and argue that various social and external costs are not paid for by a very long shot. The FHCAS, put out under the name of USDOT (FHWA and the Transit Admin) puts the subsidization of roads overall at about 25% — that is to say, about 80% of the costs of US roads are paid for by road users, the same broadly for trucks and for light passenger vehicles. Most of the huge highway “subsidy” figures that get bandied about are gotten by charging up a huge chunk of the Pentagon’s budget to motorists on the grounds that if it weren’t for motorists the US wouldn’t need to maintain, say, a third of its armed forces. USDOT doesn’t buy that, accepting that a variety of national interests are served by the military, not just motorists. (People controlling the oil will surely want to sell it whoever they are, and whatever their attitude toward the US.)

Rather questionable is that the FHCAS charges to motorists all the subsidies going to transit, on the argument that transit subsidies are intended to relieve congestion on the highways (pV-19). That’s an odd argument. Over a half of transit (buses) uses the highways and constitutes part of the demand for road space just like other vehicles. It is exempted from almost all road use charges. It gets an almost free ride on the roads. Even so it cannot collect in revenue a half of what it costs to run, and the USDOT suggests that somehow that huge deficit (several billion-$s/yr) should be attributable to gas-tax paying road users, as well as the cost of providing its roadspace! Commuter/heavy rail is the other major part of transit whose deficits FHCAS says should be attributed to motorists. At least rail doesn’t use the roadways like bus. But it would make as much sense to attribute the costs of building and maintaining highways to transit users. After all if the highways weren’t there, there would need to be much more transit. So it could equally logically be said that highways relieve transit congestion, and the cost of the highways should be chalked up to transit users! This particular “cost” allocation is politics not logic.

Motorists probably come close to paying their way with user charges in the broad, once you discount for that bit of nonsense.

The trouble is not any aggregate subsidy but that there are quite huge cross-subsidies and perverse incentives within various classes of vehicles due to the accumulated hodge-podge of user charges. The report makes this point. In particular the study says the current charges “do a poor job reflecting costs at the heavier weights.” (pIV-22). Single unit trucks over 23t pay only 20% of the costs they impose, and combination trucks around the federal weight limit only about half their costs. Partially loaded tractor-trailers (under 32t) pay user charges greater than costs. It’s the heavy dump trucks, tanker trucks and concrete delivery trucks, heavy single unit vehicles, which stand out as imposing much higher costs on the road system than they pay in user charges. As axle loadings increase pavement damage increases to the 4th power according to the rule of thumb used in these assessments that derives from classic 1960s AASHTO research. (The USDOT doesn’t seem to take into account later research which suggests the 4th power rule only applies to certain types of pavement damage on certain types of pavement and that wheel arrangements and suspension are of great importance too — see D. Cebon “Interaction between heavy vehicles and roads” Buckendale Lecture, SAE SP-951)

The USDOT report examines adjustments of the existing user charges, such as increasing gasoline or fuel taxes, eliminating caps and exemptions to others, but concludes that each effort to eliminate one inequity and wrong incentive just creates another. The only charges which really make economic sense are weight-distance and axle-weight-distance charges. Cebon summarizes current research as being that pavement fatigue damage is related to axle weight but rutting (and of course bridge requirements) are related to gross vehicle weight. But wheel bounce harmonics and resulting dynamic forces need to be factored into road/vehicle design. And into charging?

The study devotes much space to the discussion of congestion costs. It estimates that cars on urban highways impose external costs ranging between 1c and 11.5c/km, and trucks between 10c and 30c/km through adding to congestion. These are huge costs, the report notes, and there is no way appropriate charges can be levied via a national or federal system. It has to be done road by road at the local level. They don’t call it a toll, but that’s what it is!

Nowhere does it quite spell it out, but this report makes the case for abolishing fuel taxes, tire taxes, heavy vehicle use taxes, the diesel premium etc and charging road by road with time variable and weight/axle-load based tolls. The Pennsylvania and Ohio turnpikes both weigh vehicles on toll plaza approach lanes and base their toll on weight classes by distance traveled — almost exactly the weight-distance user charge which the FHWA says is optimum for the nation’s interurban highways. This report makes the case for going to tolls but doesn’t spell it out. (USDOT “1997 Federal Highway Cost Allocation Study” Contact Jim March FHWA 202 366 9237)