A QUIET REVOLUTION IN TRANSPORTATION FINANCE

For ninety years, the principal means of financing transportation facilities in America has been through user fees, primarily motor fuel taxes and tolls. Motor fuel tax revenues have been plummeting for a variety of reasons, but there is no longer the political will to increase motor vehicle taxes. Rising costs and decreasing revenues have combined to bankrupt the transportation program, especially at the state level. At the same time, local governments all over the country, led by the example of California, have been enacting local option transportation taxes; gradually, the locus of transportation decision making has been shifting to local governments. Is this trend in finance good? Do most Americans even know that it is happening? What does the longer term future hold? In this seminar, Professor Wachs will argue that the recent trend is significant yet not viable in the longer term. While a variety of electronic user fees hold more promise, the transition to this approach will take decades and should be carefully planned starting now.