Impact of Highway Nonuser Revenue on Equity Ratio: Exploratory Analysis

Abstract

In the United States, due to the continued decline of highway user revenues from traditional sources, many states have adopted the approach of using highway nonuser revenue sources to support highway infrastructure development. The objective of the present study is to investigate the impact of incorporating nonuser revenue sources when computing equity ratios. As of now, past highway cost allocation studies have not included nonuser revenue sources into equity analysis. For the present paper, user revenue analysis is carried out, and both user and nonuser revenue sources are also considered in the analysis. Where user and nonuser revenue sources are considered in the equity analysis, it is observed that: (1) on average, motorcycles, automobiles, and sport utility vehicles are currently overpaying their cost responsibilities by 9.5%; (2) buses are underpaying their cost responsibility by 27.2%; (3) single-unit trucks, on average, are underpaying their cost responsibilities by 25.3%; (4) single-trailer trucks are currently underpaying their cost responsibility by 31.1%; and (5) multitrailer trucks, on average, are currently underpaying their cost responsibilities by 34.7%. If both user and nonuser revenue sources are used simultaneously to support highway infrastructure development, then excluding highway nonuser revenues in equity analysis will result in 10 out of 13 vehicle classes not paying their equitable portion of the highway infrastructure cost.