Revenue Generation Challenges

Moderator(s): Mehdi Shokouhian, PhD, M.ASCE, M.EERI, Assistant Professor, Department of Civil Engineering, Morgan State University

Transportation Infrastructure and the Traveling Public: How This Relationship Impacts Funding and Resource Allocation

• Erin Santini Bell, Department Chair and Professor, Civil and Environmental Engineering Professor, University of New Hampshire

In the United States as a whole, transportation infrastructure has pressing maintenance, rehabilitation and replacement needs. Addressing these needs will require substantial public investment, which will in turn require public awareness of the importance of infrastructure, infrastructure challenges and public understanding of the means to address them. Gasoline taxes were initially introduced to meet the financial need of expanding the U.S. transportation network — including roads, bridges, and highways — that was required when automobiles became popular and affordable and the previously used property tax was insufficient. In the early 1900s, states began using the gasoline tax to fund infrastructure projects, which made up about one quarter of all state expenditures by 1927. Gas taxes were subsequently raised to keep up with inflation and maintenance costs but stagnated by the end of the century. The last federal increase occurred in 1993 leading some states to address shortfalls in funding by increasing their own. Given the increase in electric vehicles and ride share programs, the reliance on gas tax revenue for infrastructure funding is not sustainable. Any change to this revenue model will require public buy-in. In connection with the Living Bridge project, an experimental “smart infrastructure” initiative in Portsmouth, New Hampshire, University of New Hampshire researchers analyze responses from four telephone surveys (2016-2018) regarding the perception of infrastructure condition and their willingness to support increase funding. This analysis provides insight into building public support of public transportation infrastructure funding.

Revenue Generation and Management Challenges in State Highway Infrastructure

• Jiseul Kim, Assistant Professor of Public Administration, Arkansas State University

Highway funding has been continuously declining at a faster rate. Gas tax revenues have declined over time due to changes in driving behavior, as well as more fuel-efficient or electric vehicles. The pandemic may exacerbate this, at least in the short run, as driving has been reduced during this period. Given a limited revenue pool, state and local governments often choose to defer routine maintenance, mainly because routine maintenance spending is not politically popular and deferred maintenance does not have an immediate backlash. In addition, under budget pressure, routine maintenance spending can be fungible with other spending items like capital spending. In this presentation, revenue generation challenges in state highway infrastructure and resource management challenges in state highway maintenance will be discussed. Some policy suggestions will be followed.

The Efficiency and Equity of Highway Cost Allocation — Threats and Opportunities in the Emerging Age of Vehicle Autonomy, Connectivity, and Electric Propulsion

• Samuel Labi, Professor of Civil Engineering, Purdue University

Highway asset managers continue to prepare to plan or invest in physical infrastructure to foster or at least accommodate the three key elements of emerging transportation technology — autonomy, connectivity, and electric propulsion (ACE). In this regard, the provision of new infrastructure and modification of existing infrastructure to support these elements are expected to cause changes in the efficiency of infrastructure cost recovery and the equity across the highway user groups (vehicle classes). On the side of the cost-allocation coin, it is recognized that the revenues typically earned from vehicle registrations and fuel tax will change due to the growth in electric propulsion and the changing demand for vehicle ownership and amount of travel. It is recognized duly that revenue and expenditure impacts are each expected to vary across the different technology elements. This presentation will discuss the extent to which expenditure and revenue changes and ultimately, the highway cost allocation outcomes (efficiency and equity) may occur as ACE technology elements are implemented over time and as their market penetration rates grow. The presentation will also discuss the future threats and opportunities to highway financing in the traditional highway environment. The expected outcomes of the research provide guidance towards any proposed changes to the fuel tax system to ensure that any new fee structure is revenue neutral in the era of new transport technologies, does not impair the equity of the specific user groups.

Bios

Erin Santini Bell is a professor and department chair of Civil and Environmental Engineering at the University of New Hampshire. Her research is in the area of structural health monitoring and bridge condition assessment including structural modeling, instrumentation, field testing and performance and remaining life prediction. Bell has led several research project related to field instrumentation and structural performance assessment funded by the Federal Highway Administration, New Hampshire Department of Transportation, Massachusetts Port Authority, and the National Science Foundation. She is a registered professional engineer in the states of Massachusetts and New Hampshire. Bell received a Bachelor of Science in Civil Engineering from the Georgia Institute of Technology, and a Master of Science and doctoroate in Structural Engineering, both from Tufts University.

Jiseul Kim is an Assistant Professor of Public Administration at Arkansas State University. Her current research interests are in public budgeting and financial management. Kim published several articles related to asset maintenance, state highway infrastructure, and capital budgeting and management. Her research has appeared in the following academic journals: Public Administration Review (PAR), Public Works Management & Policy (PWMP), Journal of Public Budgeting, Accounting, & Financial Management (JPBAFM). She was a co-investigator for a grant project from the Governmental Accounting Standards Board (GASB) on capital asset reporting and management in U.S. counties. She is currently serving as an executive committee member for the American Society of Public Administration (ASPA) Section on Transportation Policy and Administration.

Samuel Labi (Ph.D. 2001, Purdue), is a professor at Purdue University’s Lyles School of Civil Engineering, director of Purdue’s Next-generation Transportation Systems (NEXTRANS) Center, and associate director of the USDOT Region 5 Center for Connected and Automated Transportation. His research is guided by evolving trends on infrastructure development landscapes, including emergent threats (aging infrastructure, funding limitations, and infrastructure vulnerability) and opportunities (technological advancements and interdisciplinary synergies). He serves in editorial roles for journals including Computer-Aided Civil & Infrastructure Engineering, Safety Science, Infrastructure Systems, and Risk & Uncertainty. He chairs ASCE’s Economics & Finance committee, and is secretary of TRB’s asset management committee. Labi’s major research awards include American Society of Tests and Materials’ Mather Award for outstanding paper in concrete, TRB’s Woods for outstanding paper in design & construction, ASCE’s Masters Award (2014) for advancing transportation systems, and TRB’s Mickel award for outstanding paper in operations & maintenance.