Evaluating Alternative Transportation Financing Approaches: A Conceptual Framework and Analytical Methods

As states continue to consider taking on more responsibility in transportation, a major issue State Departments of Transportation (DOTs) face relates to financing future transportation investments. At present, many state transportation policymakers and State DOT administrators are considering alternative financing approaches to generate future revenue sources for transportation investments. This dissertation focuses on several user fee based approaches currently being considered by state transportation policymakers and administrators in the U.S. Examples of such approaches include: increasing the current fuel tax and indexing the fuel tax to inflation; implementing an odometer based vehicle miles traveled (VMT) fee approach through vehicle inspection programs in selected states; establishing a global positioning system (GPS) based VMT fee approach for heavy vehicles where privacy and implementation costs are less of a concern; and increasing existing tolls and charging tolls on existing roads that do not have tolls, preferably with open-road tolling (ORT) and all-electronic toll (AET) payment systems. Meanwhile, major questions of interest relate to the potential impacts or consequences of such financing approaches. Central to this dissertation is the development of a conceptual framework and analytical methods to aid state transportation policymakers and administrators in the planning and formulation of alternative financing approaches suitable for consideration in their state. The application of the framework and methods is illustrated in a case study. This case study includes an evaluation of alternative toll scenarios on a section of Interstate 93 in the Boston Metropolitan area where at present tolls are not charged. A major conclusion of the case study is that placing tolls along interstate highways where tolls are not currently collected has the potential to provide a significant source of revenue for State DOTs but that other impacts including route diversion, privacy, and equity need to be considered and addressed in the decision-making process. It is expected that the results of the dissertation will be of interest to state transportation policy makers as well as State DOT administrators currently involved in the development of a comprehensive transportation finance policy