Two by the same authors, Jason Junge and David Levinson. First up, “Economic and equity effects of transportation utility fees.”
Transportation utility fees are a ï¬nancing 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 beneï¬ts 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 quantiï¬ed.
A signiï¬cant portion of local transportation funding comes from the property tax. The tax is conventionally assessed on both land and buildings, but transportation increases only the value of the land. A more direct, efï¬cient way to fund transportation projects is to tax land at a higher rate than buildings. The lower tax on buildings would allow owners to retain more of the proï¬ts of their investment in construction, and have the expected side effect of increased development intensity. A partial equilibrium simulation is created for three sample cities to determine the magnitude of the intensity increase for both residential and nonresidential development if various levels of split rate property taxes were enacted.
Always nice to think about different approaches to transportation finance, and the ways in which incentives might be tweaked to generate better outcomes.