Transportation Finance Reform

Project summary:

Policy makers have been examining alternative transportation financing mechanisms because of concerns about the adequacy of future revenues and concerns about the fairness and efficiency of current financing systems. Previous research has examined transportation financing alternatives in the Twin Cities region and has identified research questions pertaining to the financing of low-traffic roads. Low-traffic roads include many local roads in urban areas and many streets and highways in rural areas. Much of the research on financing alternatives has focused on user fees to mitigate the external congestion costs of transportation. Because these and other external costs are often concentrated on high-traffic urban roads, this work has tended to ignore the fiscal implications for rural and other low-traffic roads. This research will identify financing alternatives that will improve the network of low-traffic roads. One focus will be investigating the claim that revenue from user fees may not adequately cover the fixed costs associated with such roads. In addition, this research will build on previous work for the Twin Cities area, and analyze the broader effects of transportation financing alternatives for statewide public finance.