Transportation utility fees are a transportation nancing mechanism in which the network is treated as a utility and properties are charged fees in proportion to their network use, rather than according to their monetary value as in property taxation. is mechanism connects the costs of maintaining the infrastructure more directly to the bene ts received from mobility and access to the system. e fees are based on the number of trips generated and vary with land use. is paper evaluates transportation utility fees as an alternative funding source in terms of efficiency, equity, revenue adequacy and political and administrative feasibility. e experiences of cities currently using utility fees for transportation are discussed. Calculations are included to determine the fee levels necessary for transportation maintenance budget needs in three sample cities and a county in the Minneapolis-St. Paul (USA) metropolitan area. Proposed fees for each property type are compared to current property tax contributions toward transportation. e regressive effects of the fees and the effect of adjusting for the length of trips generated are also quanti ed.
A signi cant portion of local transportation funding comes from the property tax. e tax is conventionally assessed on both land and buildings, but transportation increases only the value of the land. A more direct and efficient way to fund transportation projects is to tax land at a higher rate than buildings. e lower tax on buildings would allow owners to retain more of the pro ts of their investment in construction, and would be expected to lead to higher development intensity. A partial equilibrium simulation is created for Minneapolis, Rich eld and Bloomington, Minnesota to determine the intensity effects of various levels of split-rate property taxes for both residential and nonresidential development. e results indicate that split-rate taxes would lead to higher densities for both types of development in all three cities.
Roads cover a significant fraction of the land area in many municipalities. The public provision of roads means this land is exempt from the local property tax. Transferring roads from public to private ownership would not only remove maintenance costs from city budgets, but increase potential property tax revenue as well. This paper calculates the value of the land occupied by roads in sample cities and determines the potential revenue increase if they were subject to property tax. Further calculation computes the extent to which the property tax rate could be reduced if the land value of roads were added to the tax base.
Roads cover a significant fraction of the land area in many municipalities. The public provision of roads means this land is exempt from the local property tax. Transferring roads from public to private ownership would not only remove maintenance costs from city budgets, but increase potential property tax revenue as well. This paper calculates the value of the land occupied by roads in sample cities and determines the potential revenue increase if they were subject to property tax. Further calculation computes the extent to which the property tax rate could be reduced if the land value of roads were added to the tax base.
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