Evaluation of financing alternatives for Texas transportation

This report surveys different types of financing alternatives for highway and aviation expenditures. Included among the taxes and fees reviewed are motor fuel taxes, license and registration fees, weight distance taxes, congestion taxes, property taxes, assessments and impact fees, parking fees, and private donations. Criteria for evaluating different taxes were surveyed, and several standard criteria were used to evaluate financing alternatives. Criteria are divided into two groups: (1) basic criteria, including equity, efficiency, and revenue potential, and (2) practical criteria, including acceptability, administrative feasibility, and applicability. Motor fuels are found to score very high on all criteria. Even though most equity analyses find that motor fuel taxes are regressive with respect to income, evaluation with respect to total expenditures shows that expenditures on gasoline, and thus on gasoline taxes, tend to be quite proportional to total expenditures at all levels of income. Registration fees in Texas are found to be relatively high for passenger cars and relatively low for trucks. Congestion fees and weight-distance taxes are rated quite high on both equity and efficiency criteria, but are not currently rated as high on the practical criteria. Additional study of these taxes is warranted. Other types of financing alternatives that are discussed include toll roads, tire excise taxes, general sales taxes, property taxes and fees, severance taxes, income taxes, lottery revenues, special benefit fees, private financing and debt financing.