ECONOMIC IMPACTS OF COST-BASED HIGHWAY FINANCING

Highway financing is emergining as one of the more pressing concerns in the realm of public policy at the state level. As an example, much of Iowa's highway system is in an advanced stage of its life cycle, and the surface condition of many segments is becoming poor. A variety of policy actions has been suggested to contend with the fiscal shortage that is precluding needed rehabilitation efforts. Before significantly redirecting public policy in so crucial an area as highways, it is important to understand the likely impacts both positive and negative of potential changes. This article examines the probable economic impacts of increasing highway user charges and shifting the cost burden so that heavier vehicles would pay proportionally more.