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Chapter 3 | Congestion charging as an alternative strategy

introduction of congestion charging (embodying an increase in the charges) to

improve cost recovery, concluding that the case ‘presents the private part of that

partnership, and the piper must be paid’ (Commonwealth of Virginia 2007, p. 4).

Thus, congestion charging can facilitate cost recovery in facilities; this is a crucial

consideration when that infrastructure is privately-funded. Indeed, as we considered

earlier (see page 12), the application of PPP systems may rely upon such charging

options in order to secure this model of infrastructure provision.

Figure 3.7 Historical trends in US National Highway spending, user fee

revenue/expenditure ratio

110

90

100

90

80

70

2001 $US billion

70

50

60

50

40

Per cent

30

30

20

10

10

0

1961 1971 1981 1991 2001

Highway user fees/expenditure (per cent)—right axis

Expenditure ($ billion)—left axis

0

Source: Adapted from Transportation Research Board (2006, Table 2–3, p. 28).

A more general case for applying congestion charging to generate funds for

infrastructure is the argument that conventional road user-funding is losing its

effectiveness as a source of revenue. 47 As explained by a US state transport authority,

after adjustments for inflation, the improved fuel efficiency of cars had reduced the

tax revenue per mile driven on Oregon’s roads from 2.31 cents in 1970 to 1.16 cents in

2003’ (Whitty and Imholt 2007, Table ES.1, p. 1). Oregon’s response to this threat to its

road revenue is examined in Section 3.12.

Since fuel tax revenues in the US are hypothecated for road funding purposes, there

is concern at the national level that the Highway Trust Fund could find itself in a

deficit situation as early as Fiscal Year 2008. Figure 3.7 illustrates US National Highway

expenditure and the ratio of expenditure to payments from road users.

Apart from the blip during the first oil price shock, Figure 3.7 shows that expenditure

grew steadily, with user fee revenue accounting for around 90 per cent of expenditure.

More recently, the share of expenditure accounted for by highway user fees has

declined to 80 per cent. It is this decline that generates doubt over the continued

‘viability’ of the fuel tax, where viability is defined by the Transportation Research

47. This is a concern that arises irrespective of which infrastructure ownership/control is adopted.

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