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CBO Report on Alternative Approaches to Funding Highways

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In 2011, the Congressional Budget Office has released a report detailing public policy options for funding federal highway programs.  This report focuses primarily on fuel taxes and on other fees that could be assessed on the basis of the number of miles that vehicles travel to identify potential policies to fund the programs in a sustainable way over the longer term.

The report addresses several issues relating to implementing a vehicle-miles-traveled (VMT) based fee, which is often cited as a practical alternative to a fuel tax as vehicles become more fuel efficient over the long term.  The report includes discussion on assessing the goals of a VMT-based program to appropriately set fees for vehicles’ weight and number of axles, on-peak versus off-peak travel in congested areas, technology and policy options for addressing privacy concerns, and considerations of cost and length of time to implement a VMT-based user fee system.

The report determined that a VMT-based fee would place a larger relative burden on rural residents and low-income populations but that the impact would likely be less than fuel taxes.  For more information or to read the report, visit www.cbo.gov/doc.cfm?index=12101.

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