Review of Financing Options for Highways and Transit

Abstract

A variety of innovative financing techniques for highway and transit is reviewed. With federal support diminishing and transportation needs growing, agencies are seeking new ways to fund transportation projects. The techniques discussed fall into the four broad categories: charges on benefiting properties; joint venture approaches; user charges; and marketing and merchandising approaches. Charges on benefiting properties recognize that there are specific beneficiaries who gain from transportation improvements. Techniques within this category include: connector fees, negotiated investments, special assessment, road corporations, tax increment financing, and impact requirements. Joint ventures with the private sector recognize that it is mutually advantageous for public and private sectors to cooperate on transportation projects and include the techniques of land/air rights leasing, donations for capital improvements, and cost sharing. User charges are intended as direct payments for services rendered and are classified as motor vehicle taxes and fees, tolls, commercial parking taxes, and taxes on motor fuels. Marketing and merchandising approaches include advertising and merchandising. None of the techniques is a panacea for transportation finance, but where appropriate conditions exist, they can be effectively used to finance the growing transportation needs of our nation.