U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
This is the first Federal Highway Cost Allocation Study (HCAS) in more than 15 years. The last Federal HCAS was completed in 1982 pursuant to the Surface Transportation Assistance Act of 1978 (STAA). The STAA directed that the 1982 Federal HCAS focus on estimating the responsibility of different vehicle classes for Federal highway program costs and evaluating the equity of Federal user fees in terms of whether different vehicle classes were paying a proportionate share of highway program costs for which they were responsible. Following the 1982 Federal HCAS, changes in the Federal user fee structure were enacted in the STAA of 1982 that improved the equity of Federal user fees based in part upon recommendations in the 1982 Federal HCAS.
No comprehensive review of Federal highway user fee equity has been conducted since the 1982 Federal HCAS. Meanwhile, the composition of the Federal-aid highway program has changed substantially, as have Federal highway user fees. An important reason for this new Federal HCAS is to determine how changes in the Federal highway program and user fees that support that program have affected the equity of Federal highway user fees.
In addition to updating user fee equity analyses conducted in the 1982 Federal HCAS, this 1997 Federal HCAS also addresses issues that were not covered extensively in the 1982 Federal HCAS, including the responsibility of different vehicle classes for social costs associated with highway use, the responsibility of different highway users for transit-related costs that were not funded from the Highway Trust Fund (HTF) at the time the 1982 Federal HCAS was completed, and the responsibility of different vehicle classes for highway costs for all levels of government. These issues are particularly important in understanding the extent to which total Federal, State, and local highway user fees paid by each vehicle class cover overall highway-related costs occasioned by that vehicle class.
Another important reason for conducting a Federal HCAS at this time is that the U.S. Department of Transportation (DOT) also has a Comprehensive Truck Size and Weight (TS&W) study under way. Among the factors that must be considered in the TS&W study are whether various truck classes pay for the highway costs they occasion under existing TS&W limits, and how potential changes in those limits might affect cost responsibilities and user fees that different truck classes should pay to cover their costs.
In October 1994, the Federal Highway Administration (FHWA) in cooperation with the American Association of State Highway and Transportation Officials (AASHTO) sponsored a workshop to discuss issues that should be considered in the 1997 Federal HCAS. Participants from State transportation agencies, industry organizations, academia, and other interested groups discussed implications of legislative changes since 1982 that have affected the composition of the Federal-aid highway program and user fees supporting that program. They noted the following changes in the highway program since 1982 that should be considered in the study: (1) the creation of a National Highway System (NHS); (2) the increased flexibility provided by Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) to fund transit, intermodal projects, and other State and local priorities; (3) the establishment of the Mass Transit Account (MTA) of the HTF into which 2 cents per gallon of Federal fuel taxes are deposited to finance transit capital improvements; and (4) increased concern about environmental, safety, congestion, and other social costs of highway use and operation.
One recommendation coming from the October 1994 HCAS Workshop was that a committee of experts be established to review technical work on the 1997 Federal HCAS. In 1995 a committee of nationally recognized authorities on pavements, bridges, transportation economics, and transportation policy analyst was established by the Transportation Research Board (TRB) to review technical and other aspects of the study.
There was a consensus that this study should not simply update the 1982 Federal HCAS, but that it should directly address issues that have emerged since 1982 that affect highway cost responsibility and user fee equity. Recommendations from this workshop had a major influence on the scope of this study.
Study Objectives and Scope
The primary objective of this study is to analyze highway-related costs attributable to different highway users as a basis for evaluating the equity and efficiency of current Federal highway user charges. This is consistent with objectives of previous Federal HCASs, although the current study examines certain items in greater detail than was done in previous Studies. The STAA explicitly limited the scope of the 1982 Federal HCAS to examining Federal highway program costs paid from the HTF and the equity of Federal user charges. There is no similar legislative direction for this study, but the extent to which Federal user fees paid by different vehicle classes correspond to Federal highway costs attributable to those vehicles remains an important policy issue and is a principal focus of the study. However, several other emerging highway policy issues including the responsibility of different vehicle classes for social highway costs are considered in this study. The relevance of study findings to investment and regulatory decisions also is discussed.
Summary of HCAS Methods and Findings
Overall, methods used in this study are similar to methods used in the 1982 Federal HCAS. More detailed data on travel and operating weight distributions for different vehicle classes have been developed than were available in 1982, and more detail on the composition of the highway program is available as well from FHWA's Fiscal Management Information System. Methods for allocating various types of costs among vehicle classes have been refined, especially for pavement, bridge, and capacity-related costs, but the study retains the overall cost-occasioned approach used in the 1982 Federal HCAS for allocating transportation agency costs. New methods have been developed for the allocation of transit-related costs and other multi-modal transportation costs that were not considered in the 1982 Federal HCAS. The analysis of social costs associated with highway transportation has been expanded to include not only marginal costs but total social costs of highways as well. Social costs that can be quantified and attributed to different vehicle classes are considered in equity and efficiency analyses. Costs that cannot easily be quantified are discussed in qualitative terms. Air pollution and global climate change costs could not be estimated in time to be included with this report. Highway-related air pollution costs will be estimated in an addendum to this report.
The base period for this study is 1993 to 1995 which covers the most up-to-date information available on Federal highway expenditure patterns since ISTEA. The analysis year is 2000. A 3-year average of highway costs and revenues is used to represent the base period to reduce the effects of annual variations in costs and revenues.
Vehicle Travel Characteristics and Population
by Different Vehicle Classes
Table 1 shows total 2000 travel by different groups of vehicles. Travel for single unit and combination truck classes is broken down by registered weight groups. Passenger vehicles account for about 93 percent of total vehicle miles of travel (VMT) in the United States. Single unit trucks and combination trucks account for 3 and 4 percent of total travel, respectively. Over two-thirds of single unit truck travel is by vehicles registered below 25,000 pounds while among combination vehicles, 75 percent of travel is by vehicles registered between 75,000 and 80,000 pounds.
Table 1. Total 2000 Travel and Number of Vehicles
by Class and Registered Weights
Vehicle Miles of
Number of Vehicles Passenger vehicles
Single Unit Trucks <25,000 pounds
25,001 - 50,000 pounds
Combination Trucks <50,000 pounds
50,001 - 70,000 pounds
70,001 - 75,000 pounds
75,001 - 80,000 pounds
80,00 - 100,000 pounds
Total All Vehicles
In Chapter II of the main report, data on the travel and operating/registered weight distributions for 20 different vehicle classes are presented. Vehicle classes include automobiles, pickups and vans, buses, three types of single unit trucks, six types of single trailer combinations, three types of truck-trailer combinations, four types of twin-trailer combinations, and a triple trailer combination. Data needs of the Department's 1997 U.S. DOT TS&W study were important considerations in selecting configurations to be included in the 1997 Federal HCAS. Truck travel and operating/registered weight distributions on each of 12 highway functional classes are estimated for each vehicle configuration.Figure 1 shows differences among vehicle classes in rural and urban travel. Almost two-thirds of total automobile travel is in urban areas, a much higher percentage than for other vehicle classes. Over half of the annual travel by pickups, vans, buses, and single unit trucks is in urban areas, but only 40 percent of combination truck travel is in urban areas.
Federal-aid Highway Program Costs
The distribution of Federal obligations by improvement type and highway functional class has a strong influence on the relative cost responsibility of different vehicle classes. Obligations for new capacity constitute about one-fifth of total Federal obligations for highways under the Federal-aid highway program. System preservation represents about 40 percent of total obligations, system enhancement about 15 percent, obligations from the MTA of the HTF one-eighth, and other miscellaneous costs about 9 percent. Figure 2 summarizes the estimated 2000 distribution of obligations from the HTF.
Table 2 shows a more detailed distribution of 2000 HTF obligations by improvement type, assuming that States use Federal funds in approximately the same way they did during the 1993 to 1995 base period. Estimated revenues to the HTF in 2000 are $27,174 million (see Table 6) including $3,380 million for the MTA. To simplify the analysis, it is assumed that the total 2000 program level will equal total HTF revenues and that obligations for transit from the MTA of the HTF will equal the amount of fuel tax revenues deposited into that account in 2000. Actual obligation levels will be determined by Congress and may be below, equal to, or exceed HTF revenues.
Table 2. 2000 Distribution of Federal Highway Program Costs
New Capacity New Construction
Reconstruction - Added Lanes
System Preservation 3R Preservation
Major Bridge Rehabilitation
Minor Bridge Rehabilitation
System Enhancement Safety/TSM
Figure 3 shows the projected distribution of Federal-aid obligations by location and type of highway. Again, for analysis purposes, the distribution of obligations by highway functional class is assumed to be the same in 2000 as in the 1993-1995 base period. Two-thirds of Federal obligations are on urban highways and one-third on rural highways. In both urban and rural areas more Federal monies are obligated for improvements on higher order highway systems (Interstate and other principal arterial highways) than on lower order systemsThe distribution of program expenditures by highway type can significantly influence the relative cost responsibilities of different vehicle classes. The distribution of travel on different types of highways varies substantially by vehicle class, and other physical and operational characteristics of highways that can affect cost responsibility also vary by highway type.