Modernizing Fuel Tax Revenue Forecasting

State departments of transportation (DOTs) are facing funding challenges because state and federal fuel tax revenues are changing and becoming harder to accurately forecast. One of the factors responsible for changes is improvements in vehicle fuel economy. For example, there are increases to the National Highway Traffic Safety Administration (NHTSA)’s Corporate Average Fuel Economy (CAFE) standards, fleet economy changes, electric and alternative fuel vehicles, and changes in vehicle miles traveled (VMT). Some state legislation has inadvertently decreased fuel revenues as a side effect. For instance, more than a dozen states have adopted regulations through legislation or other government actions to rapidly scale down emissions of light-duty passenger cars, pickup trucks, and sport utility vehicles and require an increased number of zero-emission vehicles to meet air quality and climate change emissions goals. Six separate excise taxes are imposed to finance the federal Highway Trust Fund (HTF) program. Three of these taxes are imposed on highway motor fuels (gasoline, diesel fuel and kerosene, and alternative fuels) and generate the majority of the revenues dedicated to the HTF. The FHWA’s Highway Revenue Forecasting Model (HRFM) provides projections for a 20-year time horizon for HTF and new revenue sources. The model uses VMT and fuel economy projections, as well as changes in composition of vehicles over the forecasting period. The fuel efficiency projection incorporates anticipated penetration of fuel-efficient vehicles, including electric vehicles (EVs). The model provides revenue projections, contribution of the 21 different vehicle classes to revenues, and costs (tax burdens) to households by income group and other demographics. Outputs from this model are primarily used for conducting highway cost allocation (HCA) studies (https://www.fhwa.dot.gov/policy/hcas/final/). Research is needed to help state DOTs develop improved models to accurately forecast motor fuel transportation revenue in the near and long term for operational and planning needs. Further, these forecasts are necessary to quantify and understand potential shortfalls in revenue that need to be replaced by alternative sources of revenue. The objective of this research is to develop a method and model(s) to help states forecast motor fuel transportation revenues in light of increased fuel efficiency and alternative fuels.

• Record URL:
  http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=5534
• Supplemental Notes:
  • Contract to a Performing Organization has not yet been awarded.

Language

• English

Project

• Status: Proposed
• Funding: $450000
• Contract Numbers:

  Project 19-26

• Sponsor Organizations:

  National Cooperative Highway Research Program

  Transportation Research Board
  500 Fifth Street, NW
  Washington, DC  United States  20001

  American Association of State Highway and Transportation Officials (AASHTO)

  444 North Capitol Street, NW
  Washington, DC  United States  20001

  Federal Highway Administration

  Office of Planning, Environment and Realty (HEP)
  1200 New Jersey Avenue, SE
  Washington, DC  United States  20590
• Project Managers:

  Zelinski, Patrick

• Start Date: 20240205
• Expected Completion Date: 0
• Actual Completion Date: 0

Subject/Index Terms

• TRT Terms: Alternate fuels; Automobile ownership; Cost allocation; Electric vehicles; Financing; Forecasting; Fuel consumption; Fuel taxes; Revenues; State departments of transportation; Vehicle miles of travel; Zero emission vehicles
• Subject Areas: Energy; Finance; Highways; Planning and Forecasting; Vehicles and Equipment;

Filing Info

• Accession Number: 01901963
• Record Type: Research project
• Source Agency: Transportation Research Board
• Contract Numbers: Project 19-26
• Files: TRB, RIP
• Created Date: Dec 11 2023 9:33PM