ATRI study offers transportation financing solutions, pinpoints tax exemption losses

July 1, 2007
In a recent study, the American Transportation Research Institute proposes new transportation funding options and identifies losses exceeding $900 million

In a recent study, the American Transportation Research Institute proposes new transportation funding options and identifies losses exceeding $900 million annually in critical transportation funding resulting from state and federal fuel tax exemptions.

The loss from fuel tax exemptions is just one of several implications for highway funding explored in ATRI's Defining the Legacy for Users: Understanding Strategies and Implications for Highway Funding.

In response to state and federal efforts to pursue tolling and highway infrastructure privatization as the answer to the financing shortfalls, ATRI's research is among the first to examine highway funding from a system user perspective. While collection costs for fuel taxes range from 3 percent to less than 1 percent of revenue, ATRI has documented toll collection revenue-to-cost ratios exceeding 21 percent.

This study also highlights the threat to rural America resulting from the push toward tolling and privatization. Rural corridors lack the population densities and financial base to attract private sector investors focused on profit. Yet these same corridors are critical links in the US supply chain.

The motor fuel tax is recommended as the most effective strategy for increasing transportation funding for the short- to mid-term.

A copy of the study's Executive Summary is available at www.atri-online.org/research/results/, where a copy of the full report can also be requested.

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