Innovative Financing Sources for State Highways: Alabama Revenue from a Vehicle Mileage Road User Fee

Maintaining and constructing effective highway systems is important to mobility, public safety, and economic growth. Aging infrastructure, decreased revenue and increased construction and maintenance costs burden already declining transportation funding resources. This study investigates an innovative approach to highway funding and its potential for funding. Other traditional and innovative highway financing options are also noted. While several options are addressed, this paper focuses on the vehicle mileage road user fee as an alternate financing option for highways. Revenue source evaluation is based on revenue potential, equity, efficiency, and political acceptability. Using the state of Alabama as a case study, a sensitivity analysis of road user fee rates evaluates the revenue potential of a vehicle miles traveled based fee. An overview of the fee collection system and privacy issues are addressed. Based on the findings, recommendations are offered on the road user fee and other financing solutions with the best potential for implementation.