COMPARISON OF STANDARD INCREMENTAL AND RELATIVE-USE METHODS OF HIGHWAY COST ALLOCATION (ABRIDGMENT)

As highway costs increase more rapidly than user revenues, it is clear that most states must increase user taxes to prevent further deterioration of their roadway systems. As user tax rates increase, state highway and elected officials should become more concerned with the equity of their tax structure. Recently many engineers and economists have questioned the standard incremental method of highway cost allocation, used by most states for several decades to determine the cost responsibilities of different vehicle groups. This study developed a relative-use method, partly based on the methodology developed by the Federal Highway Administration for the national cost-allocation study completed in 1982. The method presented in this study uses the original equations from the American Association of State Highway Officials road test to develop the relative use or damage associated with a single repetition of a given axle loading and then aggregates the use factors to the vehicle classes on the highway system. The new methodology as well as the standard incremental method were applied to Maryland highways, roads and streets. Although both methods are cost occasioning in their conceptual framework, the relative-use method assigns more than twice the cost responsibility to heavy vehicles and subsequently reduces the responsibility of lighter vehicles when compared with the standard incremental method. The attempt was not to support either method nor to advocate a cost-occasioning method over marginal cost pricing; rather the paper develops a supportable method and presents the type of results obtained by its application to a typical state highway program. (Author)