| Funding of transportation infrastructure and highways in the United States is being discussed at the national level with aging infrastructure, increasing cost of replacement, and the decreasing revenue from the current motor fuel tax. There is a perfect storm where needs are increasing and revenue is decreasing. Local highways are often outside the national highway funding discussion. Receipts and disbursements data at the national, state, and local levels were reviewed for development of a local rural highway funding model. Ownership of local rural highways affects funding; thus, New York State, where 86 percent of local highways are owned locally; and North Carolina, where 80 percent of the highways are state owned, are interesting extremes and were reviewed in this report.;Revenue options that include an increase in property tax, sales tax, motor fuel tax, and a vehicle miles traveled fee were studied. A survey of experts in each state and a review of the revenue options resulted in conclusions that sales taxes targeted to highways might be acceptable if the public could be convinced that there would be no diversion. Motor fuel tax increases appear to be the best option, in many ways, but with the public and political opposition, this tax increase appears unlikely. In both states, the current diversion of motor fuel tax needs to be reviewed, with NYS having only 50 percent of motor fuel related taxes going to highways in any manner, for example.;Property tax increases appeared to be the most unlikely funding option reviewed. State ownership of local highways results in mostly direct funding, including motor fuel taxes, with known pavement conditions under a statewide pavement management system. Locally owned highway systems result in a reliance on indirect funding through primarily sales and property taxes with the need for an improved pavement condition survey and better review using life cycle cost for pavement management. The review of vehicle miles traveled (VMT) fees indicates that local rural highways would be in trouble with greatly reduced funding, if based on revenue generated on the low VMT on these highways. With over 50 percent of the national highway system consisting of local rural highways, future national discussions need to include the funding issues unique to local rural highways. |
