PAYING OUR WAY - TRANSFORMING TRANSPORTATION FINANCE -- PAYING OUR WAY - TRANSFORMING TRANSPORTATION FINANCE -- Contents -- Preface -- Paying Our Way:A New Framework for Transportation Finance -- Acknowledgments -- List of Acronyms -- Steering Our Nation's Transportation System Back Into The Black -- Summary Findings and Recommendations -- Roots of the Problem and Widening Investment GAP-Background -- Searching for Solutions-The Financing Commission's Charge and Deliberative Process -- Guiding Principles to Shape a New Funding and Finance Framework -- The Financing Commission's Response-Findings and Recommendations -- Infrastructure Stimulus Will Not Solve the Problem -- Ensuring the Security and Sustainability of the Highway Trust Fund -- Positioning Federal Funding for the Longer Term -- Addressing the More immediate Federal Funding Crisis -- Facilitating Non-federal investment in the Short and medium term -- Commentary on potential federal financing institution -- The Path Forward-Conclusions and Next Steps -- End Notes -- Setting Course: Commission's Charge and Guiding Principles -- I. The Commission's Charge -- Box 1-1. Growing Crisis in System Performance -- Highway Performance -- Transit Performance -- Freight Movements -- Safety -- Environmental Impact -- II. The Context for Funding Reform -- Considering the Federal Role in Transportation Investment -- Placing the Federal Role in Context -- Placing Investment Needs in Context -- The Problem Is Broader than Urban Congestion -- Revenue Mechanisms Can Improve System Performance and Reduce Investment Demand by Improving Efficient Use -- Technological Innovation Will Be a Key Ingredient to Success -- III. Principles for Surface Transportation Funding and Finance Recommendations the Financing Commission's Recommendations -- Support Overall Goal of Enhancing Mobility.

Generate Sufficient funding on a Sustainable Basis -- Make Users and Direct Beneficiaries Primarily Responsible for Costs to Encourage Efficient System Use -- Encourage Efficient Investment -- Incorporate Equity Impacts -- Support Energy Independence and Environmental Protection Goals -- IV. Guide to This Report -- End Notes -- The Route We Are On: The Widening Investment GAP -- I. Overview of Surface Transportation Spending -- Total Highway and Transit Spending -- Federal Share of Total surface Transportation Spending -- Federal Share of Surface Transportation Capital Investment -- Contribution of User Fees to Surface Transportation Investment -- II. Federal Surface Transportation Funding and the Highway Trust Fund -- Highway Trust Fund Overview -- Highway Trust Fund Mechanics -- Box 2-1. Why is The Highway Trust Fund Important? -- Current Highway Trust Fund Revenues -- Motor Fuel Taxes -- Other Taxes -- Current Highway Trust Fund Expenditures -- HTF Account Balances and Funding implications -- Highway Trust Fund Revenue Projections -- / -- Maintaining Federal Investment Purchasing Power -- Box 2-2. Adjusting for Inflation -- III. Surface Transportation Investment Needs -- Recent Estimates -- Financing Commission Updated Estimates -- Base Case Investment Scenario -- Alternative Investment Strategy -- Box 2-3. Future Federal Role and Impact on Investment Needs -- IV. Conclusion -- End Notes -- Transportation Funding at a Crossroads: Existing Sources and New Revenue Options -- I. Evaluation Criteria -- Revenue Stream Considerations -- Implementation and Administration Considerations -- Economic Efficiency and Impact Considerations -- Equity Considerations -- Applicability to other Levels of Government -- II. Identification of Funding Options -- III. Evaluation Methodology -- IV. Evaluation of Options -- Expanding Existing Highway Trust Fund Sources.

Pros -- Motor Fuel tax -- Cons -- Truck and Trailer Sales Tax -- Pros -- Cons -- Truck Tire Tax -- Pros -- Cons -- Heavy Vehicle Use Tax -- Pros -- Cons -- Vehicle-related Sources -- Vehicle Registration Fees -- Pros -- Cons -- Driver's License Surcharge -- Pros -- Cons -- Vehicle Sales Tax -- Pros -- Cons -- Auto-related Sales Tax -- Pros -- Cons -- Auto-Related Tire Tax -- Pros -- Cons -- Bicycle Tire Tax -- Pros -- Cons -- New Motor Fuel-related Taxes -- Carbon Tax/ Cap and Trade -- Pros -- Imported Oil Tariff -- Cons -- Sales Tax on Motor Fuels -- Pros -- Cons -- Broad-based Taxes and General Fund Revenues -- General Sales Tax -- Pros -- Cons -- Pros -- Dedicated Income Tax -- Cons -- Freight-related Taxes -- Container Fees -- Pros -- Cons -- Freight Waybill Tax -- Pros -- Cons -- Harbor maintenance tax -- Pros -- Cons -- Customs Duties -- Pros -- Cons -- Weight and Distance Taxes -- Pros -- Cons -- Targeted Tolling and Comprehensive Road Pricing Options -- Targeted Tolling and Pricing Strategies at State and Local Level -- Facility-Level Tolling and Pricing -- Pros -- Cons -- Cordon Pricing -- Pros -- Cons -- Mileage-Based -- Comprehensive Roadway Pricing Strategies at Federal and/or State Level -- Pros -- Cons -- Other Usage/Impact Taxes and Fees and Private Contributions -- V. Conclusion -- End Notes -- Paying by the Gallon: Motor Fuel Taxes -- I. Overview of Federal Motor Fuel Taxes -- II. Current Motor Fuel Tax Outlook -- Box 4-1. Key Findings from the Transportation Research Board's 2006 Special Report on the Motor Fuel Tax -- III. Alternative Motor Fuel Tax Approaches -- IV. Strengths and Weaknesses of Motor Fuel Taxes -- Strengths -- Weaknesses -- V. Conclusion -- End Notes -- Paying for the Ton: Freight-Related Charges -- I. Goods Movement on the National Surface Transportation System and Implications for Funding.

II. Potential Revenue Sources Based on Freight Transportation Activities -- Revenue Option Overview -- Revenue Option Evaluation -- Revenue Potential -- Implementation Issues: Administrative and Legal -- Payment versus Use/Benefit Issues -- Differential Economic Impacts -- III. Conclusion -- End Notes -- Paying by the Mile: Tolling and Mileage-Based User Fees -- I. Types of Direct User Fees -- Targeted Tolling and Pricing -- Comprehensive Pricing -- II. Experience with Targeted Tolling and Pricing -- III. Experience with Comprehensive Pricing -- Box 6-1. Lessons Learned from the Oregon VMT Pricing Pilot -- IV. Potential Advantages of Targeted Tolling and Comprehensive Pricing -- Revenue Potential -- Targeted Tolling and Pricing -- Comprehensive Pricing -- Sending Accurate Market Signals to System Users -- Impacts on System Investment -- Environmental Benefits -- Benefits for Transit -- V. Potential Disadvantages and Cited Policy Concerns -- Public and Political Opposition to tolling and Pricing -- Challenges to Setting Efficient Tolls and Road Prices -- Mobility Impacts -- Balkanization of National Network -- Route Diversion -- Adverse Freight Industry Impacts -- Social Equity Concerns -- Rural Equity Concerns -- Double Taxation Arguments -- Tolling and Pricing Deployment and Administration Costs -- Targeted Tolling and Pricing -- Comprehensive Pricing -- Privacy Concerns -- Scaling the Technology -- VI. Conclusion -- End Notes -- Accelerating the Trip: Financing Programs and Policies -- Box 7-1. Terms of Art -- I. Placing Financing Solutions in the Proper Context -- Box 7-2. Financing Capacity of Alternative Finance Approaches -- General Principles Guiding the Use of Debt -- Niche Opportunities to Fill Market Gaps -- II. Federal Policies and Programs to Support Surface Transportation Infrastructure Financing -- Direct Federal Credit.

State infrastructure Banks and other Revolving Loan Funds -- Grant Anticipation Borrowing -- Box 7-3. Federal Credit (TIFIA) -- Private Activity Bonds -- Box 7-4. State Infrastructure Bank Program -- Box 7-5. Grant Anticipation Borrowing -- Highway Program GARVEE Borrowing -- Transit Grant Anticipation Borrowing -- Advantages, Disadvantages, and Opportunities for Refinement of Federal Financing Programs and Policies -- Box 7-6. Private Activity Bonds -- Grant Incentives and Credit Support Programs and Policies -- Tax Incentives, Including Private Activity Bonds and Tax Credit Bonds -- Private Activity Bonds -- Tax Credit Bonds -- III. Private-Sector Financial Participation -- Forms of Private-sector Financial Participation -- New Capacity ("Greenfield") Concession Models -- Asset Monetization ("Brownfield") Concession Model -- Advantages, Disadvantages, and Cited Public Policy Concerns Regarding Private-sector Financial Participation -- Potential Advantages -- Potential Disadvantages and Cited Public Policy Concerns -- Control of Public Assets and Operational Flexibility -- Public Stewardship -- Financial Equity -- Opportunities for Refinement of Federal Policies Related to Private-sector Financial Participation -- IV. Commentary on National Financing Entity Proposals -- Box 7-7. Guidelines For Government Oversight of Private-Sector Financial Participation -- Box 7-8. Key Questions about Financing Objectives of Infrastructure Financing Entity Proposals -- V. Conclusion -- End Notes -- The Path Forward: Policy Recommendations -- Box 8-1. Guiding Principles -- Overview of Findings and Recommendations -- I. Federal Revenue Strategy Recommendations, Including Existing and New Sources -- Immediate Action: Existing Highway Trust Fund Sources -- Transitioning to New Funding Framework: A Mileage-based Direct User Fee System.

II. Recommendations on Federal Policy Drivers to Facilitate Non-Federal Investment.