Frequently Asked Questions about Transportation

Increasing road and street capacity is just one tool available for addressing congestion.* In fact, road-building may not always be the best strategy, since in some cases it can produce enough new traffic to consume all the new capacity.** A different strategy would be to improve transit service, which not only removes traffic from streets but also allows travelers to avoid having to drive in traffic congestion. In many places it makes sense to improve walking and bicycling environments, particularly since about 25 percent of auto trips in the United States are less than a mile long. Making it possible for people to walk and bike for short trips improves quality of life and public health and increases property values.***

Some strategies don’t require transportation investments in “supply” but rather focus on the demand side. Where neighborhoods are more “complete,” for example, the demand for road space can be reduced dramatically. “Complete” neighborhoods have schools, shopping, and services all within walking distance of their homes. Research has shown that when residents can walk and bike to nearby schools, retail stores, and services, household driving is reduced by 20 percent or more. Another “demand-side” strategy sets tolls and other forms of roadway pricing at higher rates during peak travel periods, thereby reducing congestion in certain corridors. Finally, new tools are available that increase the information available to travelers, enabling them to use on-board navigation systems and hand-held devices with Internet connections to anticipate congested corridors and choke points and find alternative routes. States and cities can make investments that provide data and infrastructure in support of these information systems, thereby improving traffic flows without building new lanes.

Notes:
* “Increasing road and street capacity” includes adding lanes in existing corridors, building new interchanges and major intersections, and building new roads on new alignments.
** This effect is known as “induced traffic.”
*** Such transit and walk/bike measures are known as “mode shift” strategies because they change the mode of some trips.

Additional Web Resources:

The Municipal Research and Services Center of the State of Washington has introductory information about congestion management.

A thoughtful discussion of induced traffic demand can be found on a British site.

The Victoria Transport Policy Institute has a great deal of information about transportation demand management.

Each public road or street is the responsibility of a specific municipality, county, or state agency.* State highways are funded by state departments of transportation (DOTs) with money from state fuel taxes, vehicle registration fees, and other state-enacted sources.

State DOTs also receive federal funds from Congress. These federal highway funds are appropriated from sources that include fuel taxes and various excise taxes on vehicles and tires, as well as other fees and taxes.

In most states, counties and municipalities are responsible for local streets within their jurisdictions and pay for them with funds from a variety of sources including property taxes, sales taxes, real estate excise taxes, permit fees, local option gas taxes, and general funds. (In a few states, county or municipal streets are the responsibility of the state DOT.) Counties and municipalities usually also receive some state and federal funding from their state DOT. In some cases, construction of state and local roads or streets may be funded in part through tolls or through impact fees paid by developers.

Finally, some roads in national parks or forests or on other public lands are the responsibility of the federal or state agencies that manage them and that receive funding from public lands and recreation programs.

Notes:
* Some private roads and streets are built by developers and maintained by special districts or property owners' associations.

Additional Web Resources:

The National Conference of State Legislatures has a site devoted to state transportation funding issues.

Congress appointed a National Transportation Policy and Revenue Study Commission to examine how transportation is funded at the federal level. Read the final report of the Commission.

The American Association of State Highway and Transportation Officials (AASHTO) maintains a “Bottom Line” website devoted to surface transportation funding issues. 

Public transit systems* are funded in part through fares, passes and other direct “operating” revenues. Local or state agencies that manage public transit systems also receive funding through local or regional public sources such as sales taxes, property tax.es, and other taxes and fees. Transit agencies supplement these sources with grants from state DOTs and federal agencies. In most states, state transit grants come from state general funds or a state sales tax, although in a few states public transit grants come out of the state highway or transportation fund. Federal public transit grants are appropriated by Congress from federal general funds and from the federal highway fund. It is uncom.mon for public transit systems to receive funding from impact fees, although some municipalities may obtain money for new buses or rail stations through exactions or special districts. In some states a state DOT or state transit agency may have direct responsibility for the operation of specific services or corridors. Finally, it is important to note that many state, regional, and local public transit providers contract with private transit com.panies for specific services, but that generally does not change how those services are paid for.

Notes:
* Public transit systems are owned and operated by the public through some sort of transit agency. There are also a variety of private transit systems, including hotel shuttles, airport shuttles, intercity bus companies, and various other forms of for-hire transit.

Additional Web Resources:

A website with general information about public transit, including transit funding issues.

The American Public Transportation Association website provides extensive information about public transit and public transit funding. 

The National Conference of State Legislatures has a website devoted to state transportation funding issues.

Congress appointed a National Transportation Policy and Revenue Study Commission to examine how transportation is funded at the federal level. Read the final report of the Commission.

Land uses generate transportation demand and transportation systems and corridors generate demand for land uses.

Land development patterns have a significant effect on travel demand. Where land uses are separated--with homes in one area and retail stores in another, for example--traffic levels will be high. Where land uses are mixed and densities are moderate or higher, transit ridership will be high. Where there is a horizontal mix of land uses in neighborhoods with a well-connected street network, walking and bicycling activity will be high.

At the same time, transportation is necessary to supporting development and redevelopment of land uses. Roads and streets and transit systems provide essential access to land. Further, the capacity and operational characteristics of streets and transit systems determine travel times in specific corridors, which in turn influence where development pressure will be focused. Transportation connects destinations together, creating economic synergies that significantly influence where employment centers and retail centers are built. Freight access determines where businesses can thrive, which in turn influences where commercial development can occur. Neither private sector investment strategy nor public policy can address these two issues successfully unless they are understood as integrated elements of urban form.

Additional Web Resources:

The website of Reconnecting America and the Center for Transit-Oriented Development (CTOD) provides extensive information on the relationship between transit and land use.

For information about how the transportation/land use relationship influences greenhouse gas emissions and climate change, go to the “Growing Cooler” website.

Learn about about the relationships between transportation systems and urban sprawl.

Download a Transportation Research Board report on transportation and land use in rural areas.

The effects of transportation investments on real estate are myriad. On the one hand, a new road or street can add significant value to property by providing the access that makes development possible. At a regional scale, investments in roadway and transit capacity influence travel times in specific corridors, which can in turn influence the development potential of sectors and regions.

On the other hand, the design and operation of transportation facilities and systems have direct effects on abutting and nearby properties. These effects may be positive, such as when a street is made more attractive with modern paving, street trees, and curb extensions, or when a new light rail station and line is built nearby. Or they may be negative, such as when a street is expanded to create a wide, high-speed corridor with few visual amenities, thereby detracting from the value of the properties along it.

Certain kinds of real estate require specific transportation improvements. Warehousing and distribution centers need direct access to freeways and rail sidings. Office parks and other employment centers need good transit commuter services. Successful residential developments need pedestrian- and bicycle-friendly streets. And downtowns and other storefront business districts need low-speed streets with plentiful on-street parking. One common rule uniting all these relationships is that when a key transportation facility is changed significantly, the abutting and nearby lands will be affected in ways that may add or subtract from the value of those lands.

Additional Web Resources:

Read a recent report on the impacts of transit on real estate values published by the Center for Transit-Oriented Development.

The Transportation Alternatives organization in New York City recently released a report on the relationships among walking, bicycling, and real estate values.

The U.S. Department of Transportation currently distributes transportation funds to states pursuant to 2005 federal legislation called the “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users” (SAFETEA-LU). This surface transportation program authorized funding for highways, highway safety, and public transportation totaling about $244 billion over a five-year period ending September 30, 2009, when the program must be reauthorized or extended by Congress. This money is not actually available each year until Congress passes the annual appropriation bills that determine the specific amounts to be provided in each program. Most federal highway funds are distributed to the state departments of transportation (DOTs) according to formulas and criteria in SAFETEA-LU. These funds are then either used directly for state DOT projects or allocated to local and regional agencies according to provisions in both federal and state laws. Federal public transit funds, on the other hand, are primarily distributed directly to “designated transit providers”--regional and local transit agencies. Federal funds for walking and bicycling facilities are made available to the state DOTs through allocations within the federal highway program, including the “enhancements” program, which provides significant funding for new walking and bicycling facilities.

Additional Web Resources:

Information about the current federal transportation authorization legislation (SAFETEA-LU) can be found on the Federal Highway Administration website.

The Federal Transit Administration also provides a website on the current authorization and related implementation.

The Iowa Department of Transportation provides a useful Web page and links with information about how transportation funds are used in that state.

Planning for transportation systems is carried out by state, regional, and local agencies. State departments of transportation (DOTs) have the primary responsibility for planning the state highway system, especially freeways and major arterials. Many state DOTs have multimodal transportation plans that address more than just highways, although this varies widely from state to state.

All urban areas with populations of more than 50,000 have a federally-designated Metropolitan Planning Organization (MPO) that conducts multimodal transportation planning for its area. Within their metropolitan areas MPOs have significant authority to set priorities for the expenditure of federal funds on transportation projects, including state highways and major transit projects.

Local governments--counties and municipalities--plan their local transportation systems in cooperation with their state DOTs and (if applicable) MPOs. In most states, these local governments have the primary responsibility for planning their local streets, sidewalks, and trail systems. They may also be involved in planning and delivering public transit services. In larger urban areas, however, additional public transit planning may be conducted by regional transit agencies.

Finally, in most cities organized citizen groups are involved in the planning processes for transportation and may develop plans for specific projects or corridors that they then promote to the state or to local or regional agencies. In all cases, residents have a responsibility to be knowledgeable about transportation needs and issues in their region and to be involved in the state, regional, and local transportation planning processes.

Additional Web Resources:

Read a “briefing book” describing the transportation planning process that was developed jointly by the Federal Highway Administration and Federal Transit Administration.

A useful website for one of the major Metropolitan Planning Organizations (the MPO for the St. Louis region).

The Association of Metropolitan Planning Organizations’ website provides information about MPOs and their activities.

A useful website showing one example of how state departments of transportation approach the planning process.

The most direct incentives are cost savings. Someone who commutes a round trip distance of 16 miles daily in a car alone (the national average) is spending almost $3,000 annually on the costs of driving to work.

Many employers also offer additional tax-free incentives. The bicycle tax credit was passed as part of the American Recovery and Reinvestment Act and became effective January 2009. This legislation allows employers to reimburse employees up to $20 per month for bicycle-commuting-related expenses. The employer can claim a tax deduction for the reimbursements. Employers may also provide workers with up to $230 per month in tax-free transit and vanpool benefits. Commuters can receive both a transit and a parking benefit (up to $460 per month). Finally, employers can allow employees to use pretax dollars to pay for transit passes, vanpool fares, and parking.

Additional Web Resources:

Learn how to calculate savings based upon trip length and frequency.

Find annually updated data on the cost of owning and operating a car.  

Read a summary of commuter tax benefits.

Motor fuel excise taxes (or “gas taxes”) include taxes on both gasoline and diesel fuel. Revenues from these taxes are a significant source of funding for federal, state and local transportation programs, especially road and street projects. Current federal tax rates are 18.4¢ per gallon of gasoline and 24.4¢ per gallon of diesel fuel. Fuel taxes also are assessed by all fifty states, with the average state gasoline tax at 28.6¢ and the average state diesel tax at 29.2¢. Some counties and municipalities also impose taxes on fuel sales.

As motor vehicle travel in the United States has reached a plateau (after sixty years of steady growth), revenues from fuel taxes have peaked. Because federal and state taxes are assessed on a cents-per-gallon rather than a percentage-of-price basis, increases in pump prices tend to drive tax revenues downward as higher prices reduce consumption. That, coupled with rapid increases in the costs of materials used in transportation projects (asphalt, concrete, fuel, steel, etc.), has caused the “real” dollars available for transportation improvements to shrink dramatically. As a result, the federal highway trust fund has not been able to meet financial obligations in each of the past two budget years and state departments of transportation have reduced their construction programs to the lowest level in decades.

The need to provide funding for transportation projects has led to calls for increases in both federal and state fuel taxes. Other arguments for higher fuel taxes include the need to encourage more efficient motor vehicles and the need to reduce greenhouse gas emissions. At the same time there is a growing interest in replacing per-gallon fuel taxes with new taxes based on actual miles driven, which would reduce the dependency of transportation programs on petroleum-based revenue sources.

Additional Web Resources:

A summary of arguments for raising fuel taxes in the United States.

Read current data on national travel trends maintained by the Federal Highway Administration.

Find current national data on fuel use maintained by the Federal Highway Administration.

Learn more at a Brookings Institution site with a long list of resources and articles on these issues.

A mileage tax would be used to replace all or part of the “gas taxes” assessed by the federal and state governments. Such a tax would be a “road use fee” based on actual miles driven by each vehicle, rather than on gallons of fuel purchased. The State of Oregon conducted a pilot study in Portland in 2006 and 2007 and concluded it would be feasible to implement a statewide mileage tax.

The details of potential taxing systems vary, but generally the concept is that a GPS transponder installed in each vehicle would keep track of miles driven and would exchange that data with the fuel pump when a vehicle is refueled. A tax based on miles driven would be assessed instead of, or in addition to, whatever fuel taxes remain in effect. If geographic data and time-of-travel data are collected, this method of taxation would allow fees to be set differently for travel in peak congestion periods or for travel on specific roads. Because transponders are capable of tracking travel geographically, differential state or local tax rates could be imposed.

Some are opposed to mileage taxes because they are concerned about privacy issues associated with data gathered through the transponders. Others are concerned about the cost of fitting all vehicles with transponders and converting all gas pumps to handle the computational requirements of a mileage-based tax. Still others worry that such a system would tax fuel-efficient cars at the same rate as gas-guzzling SUVs, thereby eliminating an incentive to buying efficient vehicles. Finally, economists point out that mileage taxes (like fuel taxes) affect lower-income drivers and rural residents disproportionately.

Additional Web Resources:

Read a Washington Post article summarizing the recent federal debate over a mileage tax.

Read an article that provides a (favorable) review of the Oregon mileage tax pilot project.

Read a pro and con assessment of the mileage tax.

The National Surface Transportation Infrastructure Financing Commission established by Congress evaluated scenarios associated with a national mileage fee system. The Commission considered the fees that would be required for light-duty vehicles (cars, vans, and pickup trucks) and for trucks to replace current revenues from fuel taxes in the federal highway trust fund. Assuming a mileage fee was charged at a flat rate on all travel, regardless of where it occurred and regardless of fuel efficiency, the fees required to replace current fuel tax revenues would have to be about 0.9¢ per mile for light-duty vehicles and 5¢ per mile for heavy trucks. In other words, a flat 0.9¢/mile mileage tax would be about equivalent to the current federal gas tax (18.4¢ per gallon) for a vehicle that averages 20 miles per gallon (mpg). For a vehicle averaging 40 mpg, the mileage tax would be twice as high as the current tax, assuming no compensation for fuel efficiency was built into the tax rate. It is likely, though, that if a mileage tax were implemented it would be set up to reflect the fuel efficiency of different vehicles. It is also possible that it would be designed to assess higher fees for travel in peak periods or on toll roads. Finally, it is likely that such a system would be designed to increase the amount of revenue into the federal transportation program. So the average for most drivers would be higher than current fuel taxes, but also would vary for different vehicles and different drivers.

Additional Web Resources:

Read a copy of the National Surface Transportation Infrastructure Financing Commission report and related information.

When high occupancy vehicle (HOV) lanes are opened up for use by any driver willing to pay a toll, they are called HOT lanes--high occupancy toll lanes. Regular HOV vehicles--buses, carpools, motorcycles, and emergency vehicles--continue to have free access to HOT lanes, but drivers of single-occupancy vehicles can pay to use the lanes. Tolls for HOT lanes are usually designed to be variable so that they can be set in “real time” to reflect current traffic conditions, as a way to regulate demand and keep the HOT/HOV system congestion-free even during peak hours. Historically it has been thought that HOV systems tend to benefit lower-income people because they are more likely to ride transit or carpool. In most cities today, however, commuters with wide-ranging incomes take advantage of transit and ridesharing, so the benefits are spread across income categories. Likewise, introducing the HOT lane concept would theoretically benefit people who can afford to pay the tolls, especially during peak hours. But researchers have found that HOT lane use is more a function of travel conditions and trip importance than income. A study of HOT lanes along California State Route 91 undertaken by researchers at Cal Poly San Luis Obispo found that all income categories were represented in the HOT lane traffic stream. A HOT lanes user panel survey conducted in Minnesota found that support for HOT lanes was fairly consistent across all income groups--71 percent higher income, 61 percent middle income, and 64 percent lower income. Interestingly, when asked a more specific question (Do HOT lanes only benefit the rich?), a higher percentage of high-income drivers (13 percent) than low-income drivers (11 percent) responded “yes.”

Additional Web Resources:

Visit a website with impartial information on HOV and HOT lanes as well as numerous links to other sites devoted to specific facilities.

Find data from the ongoing Minnesota study of HOT lanes users.

We appear to be entering a period of significant change in the way people travel. Annual vehicle miles traveled (VMT) increased most years between 1956 and 2004 in the United States, with growth averaging about 2.4 percent per year between 1991 and 2004. Beginning in 2004, however, daily VMT began to level off. That was followed by actual declines in VMT in both 2007 and 2008. If this trend continues, it will represent the first sustained drop in national VMT since the end of World War II.

The decline in vehicular travel may have been caused in part by rising fuel prices and by the ongoing recession, but there is also evidence that more fundamental forces are at work. These include a decline in the working-age population (due to the aging of Baby Boomers) and a related decline in the number of two-parent households with children. In addition, for decades the steady increase in women’s labor-force participation was a major source of increased driving and increased auto ownership per household. That trend has peaked in recent years.

At the same time that VMT growth has leveled out, public transit ridership has been increasing. There were about 11 billion trips on public transportation in the United States in 2008, a 4 percent increase over the number of trips taken in 2007. Urban light rail systems have been especially popular, with double-digit ridership increases in cities including Buffalo, Philadelphia, Sacramento, Baltimore, Minneapolis, Salt Lake City, Denver, and Dallas. Now the restructuring of homebuilding and home mortgage markets may be leading to resurgence in urban living, with the “drive ‘til you qualify” era of suburban expansion no longer feasible due higher fuel prices and changing home buyer preferences. If the far-flung suburbs turn out not to be marketable to either retiring Baby Boomers or the new generation entering the workforce, this could bring about a long-term decline in daily per-capita VMT and possibly even a long-term leveling-off of total VMT.

Additional Web Resources:

Download “The Road Less Traveled: An Analysis of Vehicle Miles Traveled Trends in the U.S.”.

Read a report on VMT trends prepared for the East-West Gateway Council of Governments.

For data and trends on transit ridership in the United States, go to the American Public Transit Association’s page.

For monthly reporting on the VMT trend in the United States, with data for each of the states.