Transportation Funding Sources and Alternatives in the Southeastern States Now and in the Future

Most states collect the majority of transportation revenues from sources such as fuel taxes and vehicle registration fees, while relying on the federal government via the Federal Highway Trust Fund (HTF) for additional monies. More often than not, fuel taxes have proven the most resilient source of revenue, yet concerns over increasing fuel efficiency eroding this traditional source of revenue have magnified funding concerns. When examining total revenues adjusted for inflation, most states saw little or no growth in total revenues from 1995 through 2012. Additionally, the HTF has run a deficit in recent years and legislators have utilized general funds to replenish it, leaving future federal funding levels uncertain. Revenue alternatives examined in the literature included vehicle miles travelled fees (VMT fees), tolls, and public private partnerships. The feasibility of implementing an alternative revenue source is likely to depend upon public acceptance. Various surveys that were conducted are summarized on a number of alternative revenue options. Public opinion was often driven by a perception of benefits received, and many options, including tolling, received majority support. Current legislative initiatives are briefly discussed including fees for electric and hybrid vehicles, tolls, and an increased emphasis on local government involvement in transportation. Based on the public opinion surveys reviewed and the alternative revenue options, there are several steps that states may consider. Conducting public outreach to gauge various revenue options will assist in implementation and public understanding of new revenue regimes, should they be deemed necessary. Pilot projects to test various administrative methods for a chosen revenue alternative will also assist in determining an alternative’s viability and potential administrative costs. At the very least, it would be prudent for states to consider potential revenue alternatives to fund the transportation infrastructure of the future.