2000 Federal Highway User Revenues

Highway user charges are fees upon owners and operators of motor vehicles for their use of public highways. Historically, the primary purpose for imposing highway user fees at both the Federal and State levels has been to raise revenues to finance highway improvement programs. This direct relationship between highway user fees and highway program funding is highlighted by the fact that the Federal Government and many States deposit large parts of their highway user fees in dedicated highway or transportation trust funds rather than in the general fund. The linkage between highway user fees and highway program financing is central to HCASs which seek to determine whether fees paid by each vehicle class cover costs occasioned by those vehicles.

Current Federal highway user fees and rates are shown in Table 5. Federal highway user taxes include taxes on various highway fuels, an excise tax on the sale of heavy trucks, a tax on tires weighing over 40 pounds, and a heavy vehicle use tax (HVUT) on trucks with registered weights over 55,000 pounds. Each of these taxes has been in place for many years, although rates and the specific equipment that is taxed have changed from time to time.

Table 5. Current Federal Highway User Tax Rates

Current Tax

Tax Rate Under Current Law

Fuel
Gasoline 14 cents per gallon1
Diesel 20 cents per gallon1
Alternate Fuels 0 - 14 cents per gallon1
Vehicle Excise Tax
Heavy Trucks >33,000 pounds,
trailers >26,000 pounds GVW
12 percent of retail sales for new vehicles
(trucks, tractors, or trailers)
Tire Tax
41 - 70 pounds 15 cents per pound
over 40 pounds1
71 - 90 pounds $4.50 plus 30 cents per pound
over 70 pounds
Over 90 pounds $10.50 plus 50 cents per pound
over 90 pounds
HVUT
Annual tax on vehicles
55,000 pounds gross weight
or more
14 cents per gallon1
Diesel 20 cents per gallon1
Alternate Fuels 0 - 14 cents per gallon1
1Excludes 4.3 cents per gallon to General Fund for deficit reduction.

Federal User Fee Payments by Vehicle Class

Table 6 shows Federal highway user revenues (HURs) projected to be paid by different vehicle classes in 2000, assuming the Federal highway user fee structure remains unchanged. Passenger vehicles, which account for 93 percent of total highway travel, pay 64 percent of total Federal highway user fees. Combination trucks, on the other hand, pay over 25 percent of total highway user fees even though they travel less than 5 percent of total mileage. Among the truck classes, user fees vary substantially by vehicle weight. Single unit trucks registered at 50,000 pounds or more pay 2.5 times as much per mile in Federal user fees as single unit trucks registered at 25,000 pounds or less. User fees paid by combination trucks do not vary as much with weight as for single unit trucks, but the variation is still substantial. Figure 6 summarizes the average Federal user fees paid per mile of travel by different vehicle classes.

Table 6. 2000 Federal User Fee Payments by Vehicle Class Under the Current Federal User Charge Structure ($ Millions)

Vehicle Class/
Registered Weight

Total User
Fee
Payments

Cents per
Mile
Shares of Total
Autos

$11,576

0.64

42.6%

Pickups/Vans

$5,812

0.89

21.4%

Buses

$20

0.27

0.1%

All Passenger Vehicles

$17,408

0.70

64.1%

Single Unit Trucks
   <25,000 pounds

$1,500

2.66

5.5%

   25,001 - 50,000 pounds

$611

3.18

2.2%

   >50,000 pounds

$487

6.57

1.8%

All Single Units

$2,598

3.13

9.6%

Combination Trucks
   <50,000 pounds

$306

4.53

1.1%

  50,001 - 70,000 pounds

$504

4.72

1.9%

   70,001 - 75,000 pounds

$370

6.24

1.4%

   75,001 - 80,000 pounds

$5,521

6.41

20.3%

   80,001 - 100,000 pounds

$279

7.18

1.0%

   >100,001 pounds

$189

8.30

0.7%

All Combinations

$7,168

6.20

26.4%

All Trucks

$9,766

4.92

35.9%

All Revenues

$27,174

1.01

100.0%

2000 Federal Highway User Charge Equity Ratios

The equity of highway user charges typically is measured in HCASs as the ratio of the shares of revenues contributed by each vehicle class to the shares of highway costs that vehicle class occasions. This ratio is often called a revenue/cost ratio or an "equity ratio." As noted later in this report, highway agency costs are different from the true economic costs associated with the operation of different vehicle classes. Analyses of economic costs occasioned by each vehicle class, which include environmental, safety, and delay costs imposed on others as well as pavement, bridge, and other infrastructure costs, are important in considering the economic efficiency of highway user fees. However, HCASs traditionally have focused primarily on the equity of highway user fees as measured by the extent to which each vehicle class pays for the share of highway agency costs for which it is responsible. These costs do not reflect estimates of amounts the highway agency should spend in various areas, but are estimates of how obligations actually are being distributed. The Department's Surface Transportation C&P Report provides overall estimates of investment requirements to meet system performance and condition objectives, although it does not suggest how much of those costs should be borne by Federal, State, and local transportation agencies.

Table 7 shows estimated Federal equity ratios in 2000, assuming the current highway user charge structure and the same highway program composition as during the ISTEA base period. As a class, automobiles pay the same share of Federal highway user fees as their share of highway costs, but pickups and vans pay substantially more than their share of highway costs. This difference is primarily attributable to the automobiles' better fuel economy (higher miles per gallon) which means they pay less fuel tax per mile of travel than pickups and vans.

Table 7. Ratios of 2000 Federal User Charges to Allocated Costs by Vehicle Class

Vehicle Class/Registered Weight

Ratio

Autos

1.0

Pickups/Vans

1.4

Buses

0.1

Passenger Vehicles

1.1

Single Unit Trucks
   <25,000 pounds

1.5

   25,001 - 50,000 pounds

0.7

   > 50,001 pounds

0.5

Total Single Unit

0.9

Combination Trucks
   <50,000 pounds

1.6

   50,001 - 70,000 pounds

1.1

   70,001 - 75,000 pounds

1.0

   75,001 - 80,000 pounds

0.9

   80,001 - 100,000 pounds

0.6

   >100,001 pounds

0.5

Total Combinations

0.9

Total All Vehicles

1.0

Table 8. 2000 Federal Over and Underpayments
by 20 Vehicle Classes

Vehicle Class

Total Over or
(Underpayment) (000s)

Automobiles

($323,330)

Pickups and Vans

$1,613,410

2-axle single units

$270,007

3-axle single units

($306,739)

4+ axle single units

($275,845)

3-axle tractor-semitrailers

($12,414)

4-axle tractor-semitrailers

($76,229)

5-axle tractor-semitrailers (tandem)

($651,480)

5-axle tractor-semitrailers (split tandems)

($41,162)

6-axle tractor-semitrailers

($134,212)

7-axle tractor-semitrailers

($29,767)

3-,4-axle truck trailers

$128,304

5-axle truck trailers

$30,362

6+ axle truck trailers

$4,460

5-axle twin trailers

$3,499

6-axle twin trailers

$11,188

7-axle twin trailers

($17,063)

8-axle twin trailers

($22,659)

7-axle triple trailer

($2,141)

Buses

($169,478)

User fee equity for single unit and combination trucks is highly dependent on the weight of the vehicles. As a class single units pay less than their share of highway costs, but the lightest single units will pay more than their share of highway costs. Combination trucks as a group will pay 90 percent of their highway cost responsibility in 2000, but like single units, there is large variation depending on the weight of the vehicle.

Combination trucks registered at less than 50,000 pounds will pay 60 percent more in user fees than their share of highway costs while combinations registered over 80,000 pounds will pay on average only

about 60 percent of their highway cost responsibility. There is significant variation even among combinations in the same weight group largely because of differences in the cost responsibility of different vehicle configurations. In general the more axles a vehicle has, the lower its cost responsibility at any given weight and the more nearly it comes to paying its share of highway costs.

Figures 7 and 8 highlight relationships between highway cost responsibility and user fee payments at different registered weights for 3-axle single unit trucks and 5-axle tractor-semitrailers. User fee payments increase very gradually with increasing weight, but cost responsibility increases rapidly with increasing weight, especially at the upper end of the weight range for any vehicle class. Currently, the Federal tax scheme has limited ability to address this problem.

Figure 9 compares 2000 equity ratios estimated for various vehicle classes in this study with equity ratios estimated in the 1982 Federal HCAS. The most notable differences are that equity ratios for single unit trucks will be much closer to one than in 1982 and that pickups and vans will be paying substantially more than their share of highway costs. Much of the change in equity ratios for single unit trucks is accounted for by the change in Federal highway user fees enacted in the STAA following the 1982 Federal HCAS. That study had found most single units to be overpaying Federal user fees and recommended reductions in user fees levied on those vehicles. Equity ratios for single units are now much closer to one, but on average single units now underpay whereas they had been substantially overpaying in 1982.

Equity ratios of combination vehicles were of intense interest in the 1982 Federal HCAS and remain of interest, particularly in connection with the 1997 U.S. DOT TS&W Study being conducted concurrently with this study. The overall equity of combination vehicles has improved since the 1982 Federal HCAS, but as a group combinations still pay only 90 percent

of their cost responsibility and the heaviest combinations may pay only 60 percent of their highway costs.

Table 8 shows total over or underpayments of highway user fees by each of the 20 vehicle classes analyzed in this study. Pickups and vans have the largest over or underpayment of any vehicle class; as a group those vehicles pay $1.6 billion more in highway user fees than their highway cost responsibility. Other vehicle classes that in the aggregate pay more than their highway cost responsibility are 2-axle single unit trucks, all truck-trailer combinations, and 5- and 6-axle twin-trailer combinations. Five-axle tractor semitrailers have the largest total underpayment of any vehicle class, followed by automobiles and 3- and 4-axle single unit trucks. These classes account for 32 percent, 16 percent, 15 percent and 13 percent respectively of underpayments by all vehicle classes.

Table 9. 2000 Federal Over and Underpayments by Selected Vehicles

Registered Weight
(pounds)

3-axle
Single Units

4+ axle
Single Units

5-axle
Semitrailer

6-axle
Semitrailer

Total
(000s)

Per
Vehicle

Total
(000s)

Per
Vehicle

Total
(000s)

Per
Vehicle

Total
(000s)

Per
Vehicle

20,000

$204

$244

 

 

 

 

 

 

30,000

$7,956

$236

$29

$1,229

 

 

   

40,000

$8,803

$151

$1,189

$1,122

       

50,000

($32,519)

($116)

$307

$220

$12,945

$1,811

$235

$2,132

60,000

($164,588)

($634)

($18,448)

($816)

$43,594

$1,538

$1,414

$2,104

70,000

($119,386)

($2,059)

($88,205)

($2,039)

$20,372

$603

$2,732

$1,508

80,000

($7,207)

($3,260)

($143,292)

($2,966)

($591,971)

($561)

$27,370

$342

90,000

 

 

($18,367)

($3,672)

($109,044)

($3,864)

($21,286)

($2,188)

100,000

   

($9,057)

($4,193)

($17,987)

($5,176)

($41,391)

($4,985)

110,000

 

 

 

 

($9,389)

($6,022)

($33,239)

($7,746)

120,000

 

 

 

 

 

 

($67,497)

($10,710)

Total

($306,739)

 

($275,845)

 

($651,480)

 

($134,212)

 

Estimates of total overpayments and underpayments by vehicle class give only a partial picture of user fee equity in that they do not explicitly show differences in equity among vehicles within the same class. Table 9 shows the expected overpayment or underpayment (represented by negative numbers) of Federal highway user fees by vehicles in different registered weight groups in 2000 for selected vehicle classes along with the average overpayment or underpayment per vehicle at each weight. Over or underpayments clearly vary substantially with weight. At lighter weights vehicles in each class pay more than their share of highway costs while at heavier weights they all pay less than their share of highway costs. The number of vehicles in each weight category varies widely for different vehicle classes, and the total overpayment or underpayment in a particular weight group often is not at the weight where per vehicle differences from highway cost responsibility are the greatest. The per vehicle overpayment or underpayment for the weight group with the most vehicles in each class is underlined in Table 9 for ease of analysis. In most cases the weight group with the most vehicles is also the weight group with the lowest overpayment or underpayment, but at the most common registered weight for 4-axle single units (80,000 pounds) vehicles pay almost $3,000 less than their share of highway cost responsibility.

Relatively few vehicles register at either the lightest or heaviest weights for each vehicle class, but those that do often pay either much more or much less than the highway costs for which they are responsible. Relationships shown in this Table have significant implications for TS&W policy. The heavier vehicles in each vehicle class pay substantially less than their cost responsibility. Any change in TS&W policy that allowed more vehicles in these weight ranges to operate could have infrastructure impacts and could increase inequities in Federal user fees unless changes were made to recover additional infrastructure costs attributable to operations of the heavier vehicles.

The analysis shows that the majority of the aggregate underpayment of highway cost responsibility is by vehicles traveling within the 80,000 pound Federal gross vehicle weight limit that generally applies to travel on Interstate highways. It also shows that relatively large reductions in the total underpayment could be achieved by relatively modest changes to user fees on vehicles within weight groups accounting for the greatest share of the total underpayment. This does not suggest that vehicles operating at weights where underpayments per vehicle are very large should not be charged for the costs that they occasion, but simply that the number of vehicles with very large underpayments is relatively small compared to the number of vehicles in weight classes that account for the greatest aggregate underpayment of highway costs.

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