New Transportation Funding Sources (Road Usage Charge)
New transportation funding source(Road Usage Charge)
Develop a whitepaper on a new transportation funding source
Overview and Purpose:
To identify, assess and advocate for a specific new source of funding for the transportation program to replace the current dependance on fuel taxes.
Prepare a whitepaper on an alternative funding source for transportation. The paper should include an in-depth analysis of that proposed funding source. The paper should demonstrate an understanding of the funding challenge and the merits of the proposed solution. The paper should address the considerations and challenges of that funding source, any challenges related to political and public acceptance.
The proposed new funding source may be at the local, regional, state or federal level. Your funding source may be “global” in its application. The funding may also be specific to transit, active
transportation, rail or highway activities or even multimodal. The paper should identify the pros and cons of the new source, how the funding would be collected, include an estimate on the timeline to implement and a strategy to implement.
This assignment represents 50% of your grade.
Task 1 – Identify an alternative funding source for the transportation program or a specific modal activity within that program.
Task 2 - Assess eligible funding sources for the governmental level, jurisdiction, or mode. Consider the administration and distribution requirements necessary for your source of funding and briefly assess the political and social ramifications of your proposal. You shouldn’t be overly concerned as part of this exercise with the level of competition for a specific source, or available dollar amounts that may or may not exists for a particular proposal. However, your proposed source of funding needs to be appropriately sized to address a reasonable level of need.
Task 3 - Prepare a written funding proposal to include a cover page, an executive summary, the scope of your proposal, and sufficient detail to explain a viable implementation strategy. The proposal should include an advocacy plan to gain support for implementation. The Proposal should not exceed 10 pages, size 12 font and all sources should be cited.
This report presents a different way of paying for transportation given the decline in fuel tax. For many years, federal surface transportation programs have been funded by taxes on the money people put in their cars to buy gas. The fuel tax rates have been the same since 1993, but because people are using less fuel due to better fuel efficiency, the government is looking for other ways to fund transportation. The money from taxes on fuel is not enough to support the transportation programs that Congress has authorized. For example, the federal government and states understand that investing in surface transportation like railways, roads, and bridges is important. When these systems are running well, it makes the economy more competitive by making it easier for people to travel around and by making things safer. The government is looking for a new way to pay for its roads because the decline in fuel taxes has made it difficult to afford them. Some states are trying different ways to raise money, like charging people to drive on certain roads. The government and states have been using motor fuel taxes to fund the surface transportation system for a long time. Because of the decline in fuel, the State is looking for alternative sources to help fund its transportation infrastructure. Road usage charges are one of the possible replacements that the government is considering. The government could manage the transportation system effectively using RUC as an alternative for a funding source. This is because the current vehicles are electronic. The State is a key stakeholder of the transport system because it funds and maintains its transportation system. This is why the government needs a new financial solution to maintain the transportation system. The government faces competing priorities, and with the increasing demand for transportation, both states and the federal government need more resources. The solution for improving the nation's transportation system is identifying and implementing needed changes. It will require a strategic approach so that States can get the resources they need to maintain roads. Therefore, this paper aims to assess a new transportation system that relies on fuel taxes to replace our current system.
New Transportation Funding Sources (Road Usage Charge)
In-Depth Analysis of Funding Source
The revenue tax from gas has decreased a lot in the last 20 years because people are driving less, construction-related materials are more expensive, and cars use less gas. This has made it hard for states to keep up with the costs of running and improving transportation systems. States in the United States have looked for new ways to fund road projects. It includes charging people how much they use the roads based on how many miles they drive. The federal government uses the Highway Trust Fund to pay for most surface transportation projects. The main source of money for transportation is a federal excise tax on gasoline. However, the government has been getting less money from this for several years, so they are looking for new ways to fund transportation. Since there is a decline in transportation funds, road usage charges have helped to work as an alternative funding source for transportation. Because it has been able to come up with a strategical alternative that motorists can be charged based on the number of miles they cover rather than how much fuel they use (Chandra, Shailesh, et al., 15). The new transportation fund, RUC, explores the federal government's something. This new fund will help to increase transportation revenues, even if fuel purchases decrease. To have an efficient and reliable transport system requires adequate and sustainable funding methods. Many states in the U.S. are having trouble keeping up with the cost of maintaining their roads and bridges. This has caused some lawmakers to look for new ways to raise money for transportation projects. The federal government is looking for a long-term solution to transportation funding. One of the possible solutions is the RUC, in which a fee is charged to drivers based on how much they use the roads. This would be an alternative to the fuel tax, which is less effective at raising transportation money. Under the RUC source, drivers will be charged for the number of miles they drive. This means that the driver's pay will be directly connected to how much they use the transportation network.
Public transport used to be financed by the public. However, it has been supported by federal, local, and state funds for maintenance and sustainability over the past years. Now, because vehicles are becoming more fuel-efficient, transportation infrastructure's main source of money is declining. The FAST Act established programs to get more resources to finance transportation in America. One such program, known as RUC, has been embraced by the Department of Transportation as a funding mechanism to support the construction and maintenance of the transport system. The federal government has decided to use different alternative methods to pay for the maintenance of transport infrastructure. This is because there is a growing interest in using more equitable and sustainable methods. The RUC program was created to find new sources of money for transportation, as the growth in population and vehicle miles traveled has caused the fuel tax to continually decline. The federal government decided to use the RUC program because consumers have been buying more fuel-efficient vehicles, which means they pay fewer fuel taxes than before (Greene, 454). Although fuel prices have been going up, the government has not made as much money as it needs to pay for the roads. This is because most fuel in the country costs a fixed number of cents per gallon, which does not increase with inflation. The government has been trying to find other vital ways to cater to the road's maintenance, like charging programs. The Federal and State governments have been using a policy where drivers are charged for using a road system based on the drive mileage they travel. Although all states have not yet adopted this policy, the idea is growing in popularity, and a few states have already started pilot projects. Based on the program's statistics, it is clear that the RUC program is still in its early stages. Only the State of Oregon has made it a fully functioning program (Schank, Joshua & Nikki Rudnick-Thorpe 7).
The decline in fuel tax revenue means that more states will have to start using RUC programs to pay for their transportation infrastructure. It is important because the RUC program is a potential solution for policymakers. It taxes all motorists depending on the kilometers they drive, regardless of how much fuel they use. Another factor that has made the RUC program an alternative source of funding for transport is that in the near future, the federal government will be unable to collect fuel tax revenue to maintain infrastructure due to the widespread adoption of fuel-efficient vehicles. The states such as California, Delaware, Oregon, Minnesota, Washington, among others, have launched RUC pilot programs so far (Buxbaum et al. 13). Several states have used this program to help fund their transportation programs. Other states are looking into using the program to get money for their transportation projects. The federal government should use RUC programs to fund highways. This is because the government has been charging drivers based on how far they have traveled, which has led to an increase in fuel revenue in recent decades.
Eligible funding sources
The eligible funding of the RUC will come from the drivers, who will be charged based on the number of miles they drive. The use of RUC as an alternative funding source is important because it helps the government raise a significant amount of money that can enable the State to maintain its road infrastructure. It helps leaders from state transportation organizations come together and share the best ideas and information about getting more resources to maintain the roads. For instance, the current decline in the fuel tax funding system means that there will be less money for roads in the future. This is because people are using less fuel (because cars are more efficient), and more people use alternative fuel sources. Even though there will be less money for roads, the cost of maintaining them will still go up because of inflation. The RUC program is a potential solution to this problem. Nevertheless, with the limited revenue collection, the transportation system will continue to lose value due to declining purchasing power (Lindsey 485). The government has decided to use a new program to fund the maintenance of its roads and railways. This new program is called RUC. The Federal Highway Administration will ensure that the program is successful and meets the government's revenue targets. The U.S Congress and FHWA need to find new ways to pay for them to fund new roads. One possible solution is to implement a program like RUC, which could help pay for roads in a more structured way. The federal government took RUC as an alternative for transportation funding sources because, for decades, economists had predicted a decline in fuel revenue. RUC was seen as a significant alternative to fuel tax. The program charges a fee for every mile driven. This makes it an innovative funding mechanism that helps states and the federal government pay for improvements and maintenance of the nation's surface transportation infrastructure. The STSFA grant programs are new and offer a chance for the United States department of transportation and the State to work together to find ways that the RUC can help keep the Highway Trust Fund solvent.
Pros of Alternative Source
The use of RUC as a new funding source has several benefits for the federal government and the states. The main benefits are that it will help collect revenue from high fuel-efficient vehicles. Some governments, including foreign and American state governments, have been collecting money from drivers based on the number of kilometers they drive. This is called RUC. RUC has helped make high-mileage cars and electric vehicles more affordable because drivers now pay their fair share to the government. For instance, the government moved to an RUC system because they were worried that people were driving more fuel-efficient cars, making less money from gas taxes. Therefore, the government needed to find a significant alternative to funding transportation infrastructure. As an alternative source of funding transportation, RUC needed to ensure it did not cause a decline in Federal Highway Trust Funds revenue (Atkinson par 3). If transportation declines, the government will lose money from sources like property taxes, sales taxes, and income taxes. It will make it harder for the government to fund transportation projects. RUC has helped the government collect money from drivers even though there are fewer of them using fuel. This means that RUC played a big part in ensuring that vehicles are taxed based on how much they drive, which helps the government and states meet their revenue goals. Another important benefit of RUC as an alternative source is that it has helped improve our ability to use pricing to our advantage. Economists say that charging people to drive on roads will enable the government to collect money from the drivers using the roads. This includes the cost of things like pollution and traffic congestion. By implementing RUC, the government can use these charges to help fund transportation projects.
Using a GPS-based RUC system will help the government know how long trucks spend on the roads. This information will help the government reduce road damage from heavy trucks. The use of RUC as an alternative source of revenue collection means that heavy commercial vehicles will cause less pavement damage. Another way the government could make money from vehicles is by charging them per mile driven. This would be based on how much air pollution the car causes, how congested the roads are, and what type of road is used. It will help ensure that everyone uses their resources efficiently (Atkinson par 7). Therefore, the use of RUC as an alternative source of transportation funding has helped both states and the federal government. States and the federal government have collected enough revenue from highly fuel-efficient vehicles because of RUC. Looking at the benefit of RUC to the government and environment, it is true Congress should legislate on RUC as an alternative resource that DOT can use in the collection of funds. If the government uses RUC to collect revenue, it will maintain its roads and meet its target for maintaining transport infrastructure. Using RUC as a source of revenue is a good idea because even though people are using more fuel-efficient vehicles, the U.S Department of Transportation will still get the money it needs. People have been opposing the RUC system because they think it leads to double taxation. This is when people are taxed twice for the same thing. However, according to research, the states that have shifted to the RUC system say that the households with lower income will pay less than they would under fuel tax. RUC will help the DOT ensure that everyone pays their fair share for using the roads.
Challenges of Alternative Source
Even though using RUC as an alternative source of transportation funding is important to the government and states, there are some challenges. For example, people who use RUC sometimes have their privacy violated. This happens because the system is not perfect and sometimes makes mistakes. People do not understand how RUC would work, causing them to have misconceptions about it. Few people understand how technology would work, causing people to have misconceptions about it. The government needs to ensure that people are educated about the importance of their alternative source revenue collection before full implementation. This alternative source's main challenge is people's fear of privacy, even though it is based on a misunderstanding. Rural drivers think they will be more affected by the system because most of them think they travel for longer than urban drivers (Atkinson par 13). This is why rural elected officials, newspapers, and other stakeholders are against the state RUC pilot programs. Even though this is the reality, rural drivers have been paying more fuel taxes than urban drivers. Many drivers in the area are arguing about the new plan to change how the roads are used. Some people do not like the idea of moving to a new system because they think it will be bad for low-income people. They are also worried about how the new system will work. Many challenges need to be faced when using RUC as an alternative source of transportation funding, but it is clear that the benefits outweigh the challenges. The use of RUC as a source of revenue is important to the government because it will help maintain its roads and meet its target for maintaining transport infrastructure. It is also important to states because it will help them raise money for their own transportation needs. The main challenge that this alternative source faces is people's fear of privacy, even though it is based on a misunderstanding. The government needs to ensure that people are educated about the importance of their alternative source revenue collection before full implementation.
The best alternative source of transportation funding is a road user charge. It is a long-term option for the federal government to raise appropriate and adequate revenues to fund the NST. The RUC is the best program because it can bring in money for the government while also providing benefits, like reducing environmental and social problems. This is shown by both academic research and real-world examples. RUC can enable the State to raise the amount of money needed to improve transportation infrastructure. However, this change from FMFT (federal motor fuel taxes) to RUC has caused many political, technological, and technical challenges. These challenges need input from many people to be solved. For example, motorists need to be educated about the changes to cooperate and follow the new rules. States that have piloted the programs say that it is effective and can help the state and federal government collect money to help fund roads in the country. The policymaker needs to create an educational program to explain the benefits of road user charging programs. Even though there are some challenges with RUC, policymakers should not be discouraged from finding an effective way to implement the RUC system as a new way to fund transportation.
Atkinson, Robert D. "A Policymaker's Guide to Road User Charges." A Policymaker's Guide to Road User Charges, Information Technology and Innovation Foundation, 22 Apr. 2019
Buxbaum, Jeffrey N., Reema Griffith, and Jack Opiola. "Road Usage Charges in Washington State? Methodical Approach to Evaluating a Transition Away from the Gas Tax." Transportation Research Record 2450.1 (2015): 7-16.
Chandra, Shailesh, et al. "Accessibility evaluations of the proposed road user charge (RUC) program in California." Transport Policy 113 (2021): 12-26.
Greene, David L. "What is greener than a VMT tax? The case for an indexed energy user fee to finance us surface transportation." Transportation Research Part D: Transport and Environment 16.6 (2011): 451-458.
Lindsey, Robin. "Reforming road user charges a research challenge for regional science." Journal of regional science 50.1 (2016): 471-492.
Schank, Joshua, and Nikki Rudnick-Thorpe. "End of the highway trust fund? Long-term options for funding federal surface transportation." Transportation research record 2221.1 (2011): 1-9.
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