McCullough, Gerard J.

Highway funding in the United States has traditionally been done through user fees, most notably motor vehicle fuel taxes. However, there are growing concerns among some policymakers that fuel taxes are no longer adequate, sustainable, efficient, or equitable. Entities in the United States and abroad have conducted pilot projects or implemented mileage-based fees, including several specifically designed for heavy trucks. There are two major concerns related to truck travel: (1) heavy trucks consume a great deal of roadway capacity due to their size, operating characteristics, and annual miles traveled; and (2) roadway wear and tear caused by the combination of truck mileage and heavy loads is significant and disproportionate to the number of trucks on the road. The concept of mileage-based user fees has seen increasing support from a number of groups in recent years; however, it faces opposition from many in the general public and from the trucking industry. This paper is part of a larger effort exploring the benefits to the freight industry of mileage-based user fees, while highlighting industry concerns over its implementation.

Highway capital is a major component of public capital, both in terms of impact on productivity and magnitude of expenditures. The role of highway capital seems especially important in Minnesota, because the per capita investment in streets and highways is significantly higher than the national average. Compared to the national average, per capita spending on construction and maintenance was 58% higher in Minnesota from 1992 to 1996. This study focuses on the benefits of highway capital, especially through its effects on the productivity of Minnesota firms but also on through the benefits Minnesota consumers receive because of increased accessibility. Traditional methods of assessing the significance of investments in roads examine the costs or the use of roads, and not the benefits derived from them. Measures of costs include the size of construction and maintenance expenditure or the cost of replacing roads. Measures of use include vehicle-miles traveled or ton-miles of freight hauled. Quantifying the economic benefits derived from roads is more difficult because benefits must be inferred from macroeconomic effects or choices made by individual firms.