An Equitable and Integrated Approach to Paying for Roads in a Time of Rapid Change

Research Team: Alexandre Bayen (lead), Susan Shaheen, Edward (Teddy) Forscher, and Jessica Lazarus

UC Campus(es): UC Berkeley

Problem Statement: Charging motorists according to the distance they travel as opposed to the fuel they use moves transportation finance more closely in line with user-beneficiary and marginal-cost pricing principles, though not fully. Vehicle miles traveled (VMT) charges that vary by time-of-day and that reflect motorists’ marginal contributions to traffic congestion could increase both the efficiency and equity of California’s urban transportation sector.

Project Description: The final report for this project provides a brief overview of transportation user fees (historically and in a contemporary sense) followed by a discussion on how segmenting travel into three categories – long haul, the last mile, and at the curb – creates a new typology for the ecosystem of transportation pricing mechanisms. A case study based up on California’s recent Road Charge Pilot Program demonstrates a quantitative example for a blended long haul / last mile approach using a parametric mileage-based user fee (MBUF); the case investigates distributional cost burdens under different pricing calibration scenarios. There are many ways to raise the same amount of money with a parametric structure, but compared to a gas tax and a flat mileage-based fee, a parametric structure may produce a better distribution of cost burdens. Technical, political, legal, and other considerations for implementing an MBUF are discussed, drawn from a literature review of current efforts; often these aspects can direct the development of a pricing mechanism as much if not more than empirically derived goals. The conclusion discusses how this approach can aid in the development of a pricing mechanisms that move closer to the user-pays principle.

Status: Completed

Budget: $226,213

Policy Brief(s):