Tolling and Road User Charges in
the U.S.
October 28, 2015
Presentation to the Japan Road Congress
Darren Timothy, Senior Technical Advisor
Federal Highway Administration
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Outline
• Highway Finance in the U.S.
• Tolling in the U.S.
• Mileage-Based User Fees
Highway Finance in the U.S.
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Revenue Sources for Highways
Highways in the U.S. are funded from a variety of sources
Government Revenue Sources for Highways, 2012
Highway Revenue, Billions of Dollars
Source
Federal
State
Local
Total
Percent
User Charges
Motor-Fuel Ta xes
$28.1
$32.8
$1.0
$61.9
28.6%
Motor-Vehi cl e Ta xes a nd Fees
$5.8
$22.1
$1.8
$29.7
13.7%
Tol l s
$0.0
$11.8
$1.8
$13.5
6.2%
Subtotal
$33.8
$66.7
$4.6
$105.2
48.6%
Other
Property Ta xes a nd As s es s ments
$0.0
$0.0
$10.3
$10.3
4.8%
Genera l Fund Appropri a tions
$6.1
$6.7
$31.4
$44.1
20.4%
Other Ta xes a nd Fees
Inves tment Income a nd Other Recei pts
$0.4
$2.5
$8.9
$11.6
$5.5
$6.8
$14.8
$20.9
6.9%
9.6%
Bond Is s ue Proceeds
$0.0
$12.4
$8.9
$21.3
9.8%
Subtotal
$9.0
$39.5
$62.9
$111.4
51.4%
Total Revenues
$42.8
$106.3
$67.5
$216.6
100.0%
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Highway-User Revenues
Highway-user revenues are also used for public transit and
other purposes
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Revenue Sources for Highways
The share of total highway revenues drawn from highway
users has been smaller in recent years
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Revenue Sources for Highways
Revenues to the Federal Highway Trust Fund have not kept
pace with expenditures in recent years
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Highway Expenditures
Most expenditures for highway capital, operations, and
maintenance are made by State and local governments
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Highway Expenditures
Most Federal highway funding is provided to States for capital
expenditures
Tolling in the U.S.
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Tolling in the U.S. Today
• 5,433 miles of toll roads, bridges, and tunnels in
the U.S.
 Includes 150 toll bridges and tunnels
• Tolls account for 6.2 percent of total revenues
used for highways
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Toll Facilities in the U.S. Today
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Tolling as a Revenue Source
• Tolling is increasingly being considered as a
potential revenue source for transportation
investment in the U.S.
 Difficulty in raising revenues from traditional sources
to pay for major capital projects
 Ability to directly charge users who benefit from the
facility
 Use of variable tolling for congestion management
 Electronic toll collection reduces need for toll booths,
eases congestion and safety concerns
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Tolling in the U.S. Today
• Recent Developments
 New toll roads in large metropolitan areas
 New and converted tolled express/HOT lanes on
existing highways
 Increasing use of electronic toll collection
 Public-private partnerships for developing new toll
facilities
 Combining toll revenues and public funds to finance
new facilities
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Tolling as a Revenue Source
• Revenue potential depends on many factors
 Travel demand characteristics
• Traffic volumes
• Income and demographics
• Land use
 Quality and availability of alternatives and
connections
• Interchanges / intersecting routes
• Parallel routes
• Other modes
 Ease of collection and enforcement
 Toll rate structure
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Public Policy Issues in Tolling
• Potential impacts of tolling
 Traffic diversion from toll roads to other facilities
 Lack of toll-free alternatives
 Geographic and demographic equity
 Increased complexity of the highway system to users
 Interoperability of electronic toll collection systems
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Public Policy Issues in Tolling
• Revenues and Costs
 Perception of “paying twice” for roads
 Accountability in setting toll rates and policies
 Administrative costs
 Use of toll revenues on other facilities or for nonhighway purposes
 Reliability of revenue forecasts
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Federal Tolling Policy
• Tolling is generally prohibited on highways
funded by the Federal government
• Exceptions allowed through special
programs and provisions
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Tolling in the U.S. – Early History
• Toll roads and bridges were once common in the U.S.
 30-50,000 miles built between 1790 and 1900
 Long Island Motor Parkway (1908)—first superhighway for
automobiles
• Federal-aid Road Act (1916)
 “All roads constructed under the provisions of this act shall be
free of tolls of all kinds”
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Tolling and the Interstate Highway System
• Toll Roads and Free Roads Report to Congress (1939)
projected that interregional toll roads could not pay for
themselves
• Some states developed high quality, limited access highways
financed by tolls (1940s-1950s)
• Federal-Aid Highway Act (1956)
• Created funding mechanism (primarily from Federal motor fuel taxes) to
build the Interstate System
• Planned or existing toll roads incorporated into Interstate System if they
met the design standards, but Federal funds could not be used for their
construction
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Federal Tolling Programs
• Mainstream Programs (broadly available)
 Use of Federal funds on existing toll facilities
 Tolling of new capacity (new roads/bridges, added lanes)
 Reconstruction of bridges and non-Interstate highways
 Conversion of HOV lanes to HOT lanes
• Pilot Programs (limited participation)
 Congestion pricing on existing highways
 Reconstruction of Interstate highways
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Federal Tolling Program Requirements
• Limitations on the use of toll revenues
• Debt service / return on private investment
• Operation / maintenance / improvement of the toll facility
• Other surface transportation improvements (if toll facility is adequately
maintained)
• Mitigation measures for low-income drivers*
• Performance requirements (HOT lanes only)
• Application and USDOT approval (Pilot programs only)
• No regulation of toll rates
Mileage-Based User Fees
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Mileage-Based User Fees
• Mileage-based user fees (MBUFs) are seen as a potential
alternative to the use of fuel taxes as a primary highway
system funding source in the U.S.
 Concerns about long-term viability of fuel taxes due to
increasing fuel economy and use of alternate fuel vehicles
 Near term difficulties in raising fuel tax rates
 More directly align highway user charges with highway
system use
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MBUF Research in the U.S.
• Research and demonstration projects have been
conducted at the State level
• Examples: Washington (2006); Univ. of Iowa (2007); Oregon (2007, 2013,
2015); Minnesota (2013)
• Several other states exploring research and pilot programs
• Legislation passed in the U.S. Senate would fund research
on user-based alternative revenue mechanisms
 Study two or more such mechanisms
 Provide recommendations on adoption and implementation
 Would provide $115 million in funding over six years for grants to States or
other entities
 Legislation has not yet been passed in U.S. House of Representatives or
enacted into law
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Policy and Implementation Issues
• The Senate-passed research program would address
several key policy and technical issues in MBUFs
 Hurdles including implementation, interoperability, and public acceptance
 Protection of personal privacy
 Use of third party vendors to collect fees
 Equity concerns (income groups, geographic areas, urban/rural)
 Ease of compliance for different users
 Reliability and security of technology
 Flexibility and choices among various technology and payment options
 Administration costs
 Ability to audit and enforce user compliance
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Oregon Road Usage Charge Program
• Began July 1, 2015
• Allows up to 5000 participants (900 enrolled through Sept 2015)
 Limitations on the number of low MPG vehicles in the program
• Program Operation
 Rate set at 1.5 cents per mile
 On Board Units collect and report mileage and fuel consumption data
 Participants receive a bill with mileage charges and credit for State fuel tax
paid (30 cents per gallon)
• Vendor Choices
 Two commercial vendors provide GPS-enabled devices (track in/out-ofstate vehicle use) and value added services
 One public vendor tracks only mileage and fuel consumption
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Contact Information
Darren Timothy
Senior Technical Advisor
Office of Innovative Program Delivery
Federal Highway Administration
(202) 366-4051
[email protected]
Questions and Answers