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Prospects for transportation utility fees

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Abstract

Transportation utility fees are a financing mechanism for transportation that treats the network as a utility and bills properties in proportion to their use, rather than their value as with the property tax. This connects the costs of maintaining the infrastructure more directly to the benefits received from mobility and access to the system. The fees are based on trips generated and vary with land use. This paper evaluates the fees as an alternative funding source in terms of economic, equity and administrative effects. The experiences of cities currently using utility fees for transportation are discussed. Calculations are included to determine the fee levels necessary for transportation maintenance budget needs in three sample cities and a county in the Twin Cities metropolitan area. Proposed fees for each property type are compared to current property tax contributions toward transportation. The regressive effects of the fees and the effect of adjusting for the length of trips generated are also quantified.

Suggested Citation

  • Jason Junge & David Levinson, 2009. "Prospects for transportation utility fees," Working Papers 000065, University of Minnesota: Nexus Research Group.
  • Handle: RePEc:nex:wpaper:transportationutilityfees
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    File URL: http://hdl.handle.net/11299/180029
    File Function: Second version, 2012
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    1. Shoup, Donald C, 2003. "Truth in Transportation Planning," University of California Transportation Center, Working Papers qt999346pn, University of California Transportation Center.
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    Keywords

    tax; land value; locational analysis; transportation finance;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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