Synthesis of Information Related to Highway Problems. Topic 45-07. Forecasting Major Revenue Sources and Use of Non-Gas Tax Revenue Sources for Surface Transportation Infrastructure

State transportation financial planning requires the projection of revenue sources many years into the future. Such financial forecasts are the cornerstone of the planning process, and methods of estimating future resources are critical tools for state and local officials in developing and managing transportation programs. For example, federal transportation planning statutes require that state officials develop realistic estimates of funds expected to be available over both the four-year period of the State Transportation Improvement Program (STIP) and the twenty-year period of the long range plan. As state and local governments develop their short- and long-range transportation programs and evaluate new or alternative funding sources, there is little guidance on or consistency in the methods used to forecast traditional revenue sources, such as fuel taxes and vehicle registration fees. There is even less about how to forecast revenues from alternative sources, such as mileage fees. Financial managers and planners are faced with a range of issues affecting forecasts, including changes in fuel economy, vehicle miles of travel (VMT) growth rates and vehicle registration growth. At the same time, the accuracy of forecasting is becoming increasingly important. In addition, states are exploring alternative and new revenue sources to meet their funding needs. Information on new developments in this area is needed by state departments of transportation (DOTs), such as how states are projecting revenue from new sources, what issues they have had implementing new revenue generating mechanisms and approaches, and how those issues were addressed. To strengthen the planning process, state transportation programs would benefit from information on sound, feasible methods for projecting multiple transportation revenue sources, including non-fuel tax revenue sources. The objective of this report is to compile information that will help practitioners improve methods of forecasting and assist DOTs in exploring additional methods of revenue generation. The primary audience will be transportation practitioners involved in revenue forecasting and transportation funding. The report will document current revenue forecasting techniques used for non-federal revenue sources, and will identify effective practices and key challenges, as reported by State DOTs. Information will be gathered through a literature review, a survey to voting members of the American Association of State Highway and Transportation Officials (AASHTO) Subcommittee on Transportation Finance Policy, and, if needed, follow up interviews that illuminate effective practices used to forecast non-federal revenue sources. The report will include an analysis of similarities and differences in state DOT practices, and a summary of key challenges, as revealed through the survey and interview findings. In addition, the report will include five case studies that identify information about non-traditional revenue streams. For the purposes of this study, traditional revenue sources include motor fuel excise taxes and vehicle registration fees. Non-traditional revenue sources include, for example, electric vehicle fees, mileage based user fees, general sales taxes dedicated to transportation, etc. These case studies will document how and why these different revenue mechanisms were implemented by state DOTs. Information to be gathered by the survey of state DOTs will include: (1) Revenue forecasting techniques and tools currently used by state DOTs; (2) Sources and annual amounts of all current and adopted non-federal transportation revenue collected by the state; (3) Total amount of federal revenue received per year (note: the project is not concerned with forecasting federal revenue for surface transportation, but this data point is a useful point of reference); (4) Sources of data used in revenue forecasting, for example VMT, population estimates, and fuel economy/VMT distribution forecasts for the state; (5) Assumptions made in forecasting, for example future fuel usage, population growth, and inflation (to the extent that inflation affects revenue that states rely on for transportation); (6) State's experience with the accuracy of its long-range revenue forecasting; (7) Known strengths and shortcomings of current revenue forecasting approaches; (8) Opportunities for improving current forecasting performance; and (9) Special issues related to forecasting for debt financing. Follow up interviews will be conducted with survey respondents, as needed, to provide additional insight on particularly successful forecasting methods. The report will include case studies regarding five states that have implemented non-traditional revenue programs that have the potential to generate significant revenue streams over time. For example, a fee for electric vehicles or high- mileage-per-gallon (MPG) vehicles may be included, because although the near-term revenue might be minor, the long-term revenue implications might be significant. The political context in which the program was adopted may be helpful, but should not be a focus of the case studies. Information to be gathered will include, but not be limited to: (1) How and when non-traditional revenue programs were initiated; (2) How states are forecasting revenue for non-traditional sources; (3) The potential magnitude of the revenue streams; and (4) What implementation issues were experienced and how they were addressed.


  • English


  • Status: Active
  • Contract Numbers:

    Project 20-05, Topic

  • Sponsor Organizations:

    National Cooperative Highway Research Program (NCHRP) Synthesis

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC    20001
  • Project Managers:

    Zwahlen, Tanya

  • Principal Investigators:

    Wachs, Martin

  • Start Date: 20131021
  • Expected Completion Date: 0
  • Actual Completion Date: 0
  • Source Data: RiP Project 37749

Subject/Index Terms

Filing Info

  • Accession Number: 01547229
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project 20-05, Topic
  • Files: TRB, RiP
  • Created Date: Dec 4 2014 1:00AM