Extent to Which User Fees Cover Road Expenditures in the United States

Abstract

The extent to which road users pay, through user fees, the full cost of the infrastructure and services they consume has been an issue for several decades. In contrast to most previous studies, a recent American Petroleum Institute (API) report concludes that payments by road users exceed direct government road expenditures by 50 percent. The API study points out that conventional accounts of road finance data report only revenues used for highways, thereby excluding funds from other automobile-related transactions (such as vehicle sales taxes) that are not specifically spent on roads. Two major issues with the accounting methodology used by API are identified: incorrect attribution of general taxes as user fees and neglect of various road-related costs. Combined, these shortcomings inflate the revenue side of the ledger and hold down the expenditure side. A more detailed accounting of the revenues generated by road users as well as the public costs, both direct and indirect, that are attributable to the road system and its use is presented. Reexamination of the 1992 accounts indicates that total public expenditures on road-related items were $97.2 billion, whereas public revenues specifically raised from road users amounted to $75.5 billion. The result is a gap of $21.7 billion that was spent on road-related items that were not covered by road user fees. Thus, road user fees covered only 78 percent of public road-related costs in the United States in 1992.