MAKING TRUCKS PAY THEIR WAY

In an attempt to improve the equity of their highway financing methods, 11 states have adopted weight-distance taxes, and seven other states are considering them. Weight-distance taxes take into account a vehicle's registered (permitted) weight, as well as the disstance the vehicle travels within a state. The taxes typically are applied to vehicles weighing over 26,000 pounds, and they replace traditional motor fuel taxes while lowering vehicle registration fees. Cost allocation studies, based on engineering data on the pavement damage caused by various axle loads and vehicle configurations, are used to determine the vehicle's relative cost responsibilities. Analysis shows that in Iowa the net economic impact of a weight-distance tax with rates set to generate $100 million in additional revenue annually would be relatively minor. If most of the cost burden were passed on to shippers, the effect would be approximately a half percent increase in shipping rates. This increase could slow economic growth slightly in the short run. IN the long run, however, a well-preserved highway system is likely to lower shipping costs and thus bolster economic growth. (Author)