On behalf of Reason Foundation, we respectfully submit these comments in response to the Office of the Secretary’s (“OST”) request for information on advancing a surface transportation proposal that focuses on America’s most fundamental infrastructure needs.

Reason Foundation is a national 501(c)(3) public policy research and education organization with expertise across a range of policy areas, including transportation. Since 1978, Reason Foundation has led the development and implementation of innovative solutions to complex transportation problems—emphasizing the roles of markets and choice in delivering durable transportation improvements. Our approach is aligned with the Department of Transportation’s four major policy themes that it aims to advance in a forthcoming surface transportation reauthorization proposal: enhancing safety, accelerating project delivery, increasing opportunity, and strengthening partnerships.

Our policy proposals are divided into topic areas. Each proposal contains either legislative reform principles or recommended legislative text.

Jump to policy proposal topic areas:

• A fiscally responsible surface transportation reauthorization bill
• Give states a new option for converting from per-gallon taxes to per-mile charges
• Expanding private activity bonds for major transportation projects
• Reforming the TIFIA loan program
• Discretionary grant programs need to be reformed
• Prioritizing maintenance in federal transit programs
• Improving public transit efficiency
• Clearing a bureaucratic roadblock to safer driverless trucking
• Advancing performance-based rail safety regulation

A fiscally responsible surface transportation reauthorization bill

The U.S. government’s fiscal situation is going from bad to worse. Rising concerns about the federal government’s fiscal solvency are likely to have a negative impact on transportation programs that depend on general fund support.

Congress faces the need to reauthorize federal surface transportation programs in 2026, and a top priority should be increasing the long-term resilience of these programs by insulating them from the federal government’s worsening fiscal problems. If Congress wanted to put transportation investment on a sound, longer-term basis—meaning no more unfunded programs based on irresponsible federal borrowing—what kind of measures could they consider?

One idea that already has some congressional supporters is to abolish discretionary grant programs in favor of going forward only with formula funding. These discretionary grants are essentially executive branch earmarks. Just as congressional earmarks should be banned, so should executive branch earmarks. Short of abolition, more modest reforms of federal discretionary grant programs are discussed later in this memo.

A second key change would be to make the federal Highway Trust Fund self-supporting, as it was until 2008. That means formula funding would be limited to the revenue from federal user taxes. The Congressional Budget Office in January estimated that this change would require increased revenue of $40 billion per year or reduced spending of the same annual amount. Highway users should be paying for the highways they use, rather than having the true cost disguised by federal borrowing.

Those are relatively modest changes, but state DOTs and legislatures will undoubtedly be concerned because they have gotten used to the funding levels provided by recent surface transportation reauthorizations based on that irresponsible federal borrowing. This is why Congress should also give states opportunities for greater transportation investment.

One option would be to expand financing mechanisms for large-scale public-private partnerships (P3s). For greenfield projects (e.g., replacing major bridges), removing the cap on qualified private activity bonds and expanding TIFIA loans would have minimal effects on the federal budget but could foster increased state and local use of P3s. Recommended reforms to both of these federal financing programs are discussed in greater detail later in this memo.

Another program change could be to liberalize the never-used Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP) by opening it up to all 50 states and allowing them to use toll financing to rebuild any or all of their Interstates needing reconstruction. Gradually shifting Interstates from federal funding to toll financing would enable the gradually shrinking federal and state fuel tax revenues to be reserved for non-Interstates.

As is explained later in this memo, liberalizing ISRRPP could lead to the first large-scale shift from fuel taxes to road usage charges (RUCs). The Interstates and other limited-access highways handle about one-third of all U.S. vehicle-miles of travel, so converting them to per-mile toll charges could be the first large-scale transition away from fuel tax dependence. Per-mile tolls cost far less to collect than any projected large-scale RUC system now being considered. With the future of the planned national RUC pilot project mired in uncertainty, the Interstate tolling alternative could be a feasible replacement, as individual states opt into it.

An underlying reality too often forgotten is that states own virtually all of this country’s highways. The federal Highway Trust Fund was created in 1956 for the sole purpose of building the Interstate highways. It was never intended to be an ongoing federal-aid program for highways and transit. It gradually morphed into that after most of the Interstates were built.

A fiscally responsible 2026 surface transportation bill could also convey a message to state legislatures and their DOTs: The federal government can no longer afford ever-expanding borrowing to support projects that states and metropolitan areas could finance themselves as infrastructure owner-operators. If there really is a federal fiscal collapse within the next 10 years, states and metro areas need to start planning now for how they will cope when the “free” federal money runs out.

Unlike the federal government, states must balance their budgets each year. Relying more on their own financing capabilities to issue both revenue bonds and general obligation bonds—and with increased use of long-term P3s where feasible—states should be able to phase in state responsibility for their highways.

As for mass transit, California has long provided a model via its self-help counties. Every county that includes one or more large metro areas has long embraced dedicated transit sales taxes, usually approved by voters for several decades at a time. This approach localizes the funding, instead of requiring rural residents to help pay for urban transit systems that they will never use.

The coming end of free federal money for highways and transit is in sight, though few have begun to realize this. The 2026 reauthorization should be crafted with this impending change in mind.

Recommended reform principles:

• Eliminate, or at least minimize, discretionary grant programs supported by the general fund.
• Align Highway Trust Fund outlays with expected user-tax receipts.
• Increase flexibility for states to finance their own infrastructure improvements.

Give states a new option for converting from per-gallon taxes to per-mile charges

Most state DOTs understand the need to shift from per-gallon fuel taxes to per-mile charges dedicated to highway funding. But progress toward this goal has been very slow. Seventeen states have carried out pilot projects, but none have enacted a permanent program that applies to all vehicles. And Congress’s plan for a national pilot program is three years behind schedule and will not have any results useful for the 2026 reauthorization.

Very real problems have held back progress, despite some lessons learned from state pilot projects. First, there are still serious concerns about privacy—about being “tracked” on every trip one makes. Motorists and taxpayers are also concerned that a new per-mile charge would be in addition to their current federal and state fuel taxes—“double taxation.” And many experts on potential technology for per-mile user fees for all types of roads have concerns about collection costs that may be 10 to 20 times more than the cost of collecting fuel taxes.

One alternative that could help start this needed transition is the following. Instead of starting with one kind of vehicle (such as electric cars), states could start with a type of roadway. The Interstate highways (some of which are already tolled) would be relatively easy to convert to per-mile charges.

Consider the privacy concern about all journeys being “tracked” and reported to the government. Interstates (and other “limited-access” highways) have only a small number of entry and exit points. A trip on an Interstate would be charged from the on-ramp to the off-ramp, revealing no details about where the trip originated or terminated. Motorists on today’s turnpikes express no concerns about the electronic tolling that charges them from entry to exit.

The concern about double taxation is very real, and this has been a long-standing concern of the trucking industry in particular, when they must pay tolls and fuel taxes on the same tolled highway. The solution would be for a state that opted for per-mile charging to provide fuel-tax refunds for the miles traversed on its converted Interstates.

As for technology, today’s electronic tolling with pre-paid accounts has a cost of collection as low as 5% of the revenue for cars (and less than that for trucks). That compares with 2% to 3% cost of collection for fuel taxes. But 5% is much less than the 10-20% estimated for large-scale systems by per-mile-charging experts today.

Starting the transition to per-mile charges with the Interstates and other limited-access highways would offer several additional benefits. Were all states to make this transition, about one-third of all vehicle miles of travel would be shifted from fuel taxes to per-mile charges. And by providing refunds of fuel taxes for the miles driven on converted highways, states would demonstrate that there would be no double taxation involved.

To implement this change, Congress could modify an existing federal statute that has never been used: the Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP). This program allows only three states to convert one Interstate highway to tolling. Such a conversion is currently politically unviable because singling out only one Interstate to have tolls would lead to protests from users of that one corridor (as happened when North Carolina proposed using ISRRPP for I-95). Instead, ISRRPP would be opened to all 50 states and all of each state’s Interstates.

To prevent “double taxation,” the legislation would require participating states to provide fuel tax rebates to motorists and truckers for all miles traveled on the converted highways. Calculating those rebates would be a simple function of the per-mile charging software. Similar rebates are being provided today on two U.S. toll roads: the Massachusetts Turnpike and the New York Thruway.

To participate in this new program, a state transportation department would apply to the Federal Highway Administration. The two parties would negotiate and sign an agreement to comply with the terms of the legislation.

View Reason Foundation’s recommended legislative text here.

Expanding private activity bonds for major transportation projects

Surface transportation Private Activity Bonds (PABs) are tax-exempt bonds first authorized by Congress in 2005 as part of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Their purpose is to create a level financial playing field for highway and transit projects developed under long-term public-private partnership (P3) agreements. Traditional state and local government-financed transportation projects routinely use tax-exempt municipal bonds, which have lower interest rates than the taxable bonds historically available for privately financed projects. Thus, tax-exempt PABs enable the financing costs for P3 projects to be nearly the same as for traditional government-financed projects.

Prior to the advent of PABs, transportation P3 projects were few and far between. The early projects relied on bank debt at typical bank loan interest rates. Only three such projects were financed between 1995 and 2007. Between 2005 (when PABs were authorized) and 2023, there were 14 highway P3 projects financed by revenue and 12 highway and transit P3 projects financed based on availability payments. PAB-supported P3 projects have been implemented in 13 states, from California to Virginia.

The original PABs legislation included a cap of $15 billion worth of such bonds. By 2020, as more states began implementing P3 surface transportation projects, the cap was on the verge of being reached. In the Infrastructure Investment and Jobs Act (IIJA) of 2021, Congress increased the cap to $30 billion. Since then, the demand for P3 projects has increased dramatically. There are at least $31 billion of P3 project construction costs expected to reach the financing stage over the next several years. Yet, as of June 1, 2025, DOT’s Build America Bureau estimated that the remaining PABs’ capacity was only $500 million.

Congress could increase the surface transportation PAB cap again in the forthcoming reauthorization, but the better option would be to eliminate the cap altogether. When the original legislation was enacted in 2005, PABs were seen as an experiment, and it took 16 years before the original $15 billion cap was reached. But in only four years, the additional $15 billion is already close to being allocated. Surface transportation PABs are no longer an experiment and should now be mainstreamed as a proven tool for financing transportation P3s.

Removing the cap on PABs was first suggested by the bipartisan Special Panel on Public-Private Partnerships convened by the House Transportation and Infrastructure Committee in 2014. That panel also suggested that transportation PABs be extended to projects at airports and seaports. These proposals were endorsed as part of the Trump administration’s first-term infrastructure plan, “Legislative Outline for Rebuilding Infrastructure in America,” released in February 2018.

It is important to understand that transportation PABs are non-recourse bonds. They are obligations of the P3 entity: neither federal not state taxpayers are at risk if the bonds run into trouble. Equity investors and bond-buyers alike understand this point, and they have no basis for expecting a federal or state bailout in the event of revenue shortfalls.

Both the U.S. Treasury and Congress’s Joint Committee on Taxation (JCT) often express concern about expanding the scope for tax-exempt bonds. Their concern is that projects that get financed via PABs would likely otherwise be financed via taxable bonds, so the Treasury would be losing revenue from such taxable bonds. But evidence suggests this assumption is incorrect. The very slow progress of transportation P3 projects between 1995 and 2007 suggests that the private sector rejected the alternative of using taxable bonds. The few large surface transportation projects that took place during those 12 years were evidently financed by state and local governments using traditional tax-exempt municipal bonds—which are not subject to any volume cap.

Contrary to the assumptions of the Treasury and JCT, eliminating the PABs volume cap and expanding eligibility could increase federal tax revenue. The $62.5 billion invested in transportation P3 projects through 2023 via infrastructure developers and infrastructure investment funds is expected to lead to profits for these entities, resulting in their paying federal corporate income taxes. These projects are designed, built, financed, operated, and maintained by companies from this new industry, with project terms ranging from 35 to 70 years. There is every expectation that this new industry will be an ongoing source of federal corporate income tax revenue.

View Reason Foundation’s recommended legislative text here.

Reforming the TIFIA loan program

The Transportation Infrastructure Finance and Innovation Act (TIFIA) was created by Congress in the 1998 TEA-21 reauthorization. The purpose was to deal with capital market gaps for promising surface transportation (highway and transit) projects. Applicants could apply for construction-related loans for new projects, limited to 33% of the project budget. To qualify, projects had to receive two investment-grade ratings. As of 2022, TIFIA loans had helped to finance 98 projects in 22 states.

These limitations were key to the project’s success and the program’s very low loss rate. An external review conducted for the U.S. Department of Transportation, TIFIA at 25, found that through 2022, the average initial ratings of financed projects were BBB+, and the average of the portfolio in 2022 had increased to A-.

Legislative changes since MAP-21 in 2012 have gradually reduced the safeguards that have ensured the soundness of the TIFIA loan portfolio. First, the maximum loan amount was increased to 49% of project costs. More recently, new project categories were added: transit-oriented development (TOD), INFRA grant projects, state infrastructure banks, and a Rural Project Initiative that offers interest rates at one-half the Treasury rate. These new projects can all receive TIFIA loans at up to 49% of their proposed budgets.

In addition, the term of TIFIA loans can now be as long as 75 years (compared with 35 originally), and only one investment-grade rating is required. The scope of projects has recently been expanded even further to include projects at airports, seaports, and natural habitats affected by infrastructure. As of early 2025, the Build America Bureau has not approved any loans for state infrastructure banks or the Rural program, and only one for a TOD project.

Nevertheless, these changes could pose a risk to the credit quality of what has been a very successful program. As the program begins to resemble traditional competitive grant programs (which award, rather than loan, funds), sponsors of all kinds of projects may urge further expansions of TIFIA’s scope. In response, those concerned about increasing federal spending may seek to abolish TIFIA, along with earmarks and competitive grant programs.

The alternative to this would be to enact reforms that return TIFIA to its original purpose: to provide gap funding for projects that support surface transportation improvements only. Among the policy changes that would strengthen TIFIA’s credit quality are the following:

• Limit loans to the original 33% of a project’s construction budget;
• Limit TIFIA loan terms to the original 35 years;
• Restore the requirement of two investment-grade ratings; and
• Eliminate the recent additions of TOD, INFRA, state infrastructure banks, Rural, and natural habitats. 

Some recent applicants for TOD and passenger rail projects have applied for both TIFIA and Railroad Rehabilitation and Improvement Financing (RRIF) loans, with the most recent expression of interest coming from Amtrak, seeking a combined $19 billion for its proposed Texas high-speed rail project. RRIF has historically been underused. With that separate program available for passenger rail projects, there is no good rationale for TIFIA to be investing in passenger rail projects. Further, while airport and seaport projects would likely not impair the credit quality of the TIFIA portfolio, both facility types can already issue both general obligation and revenue bonds, and generally do so more rapidly than obtaining a TIFIA loan.

In several recent years, Congress has reduced the TIFIA budget, apparently based on a perception of limited demand. Yet the projected demand for revenue-risk highway and bridge P3 projects over the next three to five years was estimated in the December 2024 issue of Public Works Financing as $31 billion. Since projects of this kind average TIFIA loans for 17% of project cost, this category alone would account for more than $5 billion in new TIFIA loans.

View Reason Foundation’s recommended legislative text here.

Discretionary grant programs need to be reformed

Historically, most federal transportation funding has been awarded through formula funding. Congressional authorizers crafted multi-year transportation bills that awarded funding based on criteria including population, highway lane miles, and bridges.

The biggest problems with discretionary grants emerged under the Infrastructure Investment and Jobs Act (IIJA). But the problems started during the Obama administration, whose grants were focused on local projects with a limited nexus to transportation. A Reason Foundation analysis evaluated the Transportation Investment Generating Economic Recovery (TIGER) I, TIGER II Capital, TIGER II Planning, and TIGER III grant programs at the U.S. Department of Transportation (USDOT). The analysis found:

• The metrics that USDOT used to evaluate the applications lacked quantitative components.
• Certain funding applications contained incorrect information that USDOT used in press releases to justify the funding of those applications.
• USDOT provided limited information to the public explaining the process.
• Grant funding was not determined by rigorous application of USDOT’s own evaluation criteria: USDOT funded almost as many “Recommended” projects (25) as “Highly Recommended” projects (26). Meanwhile, only 23% of the 110 projects ranked “Highly Recommended” were funded. The TIGER Review Team offered no official written explanation for its selections. The Review Team offered notes in draft form and a memo, but these limited explanations only raised more questions because, in many cases, the projects selected were not deemed better than the projects that were not.
• A disproportionately large number of projects were funded in Democratic congressional districts. In TIGER I, TIGER II Capital, TIGER II Planning, and TIGER III, congressional districts represented by Democrats were awarded a higher percentage of grants than their overall proportional representation. In TIGER III, districts represented by Democrats received 69% of the funding despite Democrats holding only 47% of the total congressional seats.
• Many of the “transportation” projects awarded funding to environmental or economic development causes with, at best, a tenuous connection to moving people and goods.
• Many of the projects were purely local in nature with no plausible national nexus, such as recreational trails or local transit lines. 

In the IIJA, discretionary grant funding ballooned to $200 billion, which was spread over dozens of different programs, accounting for approximately one-fifth of total transportation funding. Similar to many of the grants awarded during the Obama administration, the project documentation of IIJA grant programs has been severely deficient. Details on why certain projects were awarded funding over other projects have not been provided. Local projects and those unrelated to transportation continue to receive funding. In the face of questionable and politicized grant awards, the Florida Department of Transportation took the unusual step of launching an advocacy campaign criticizing USDOT’s discretionary grant programs: “Build Infrastructure, Not Political Agendas.”

But an even bigger problem has emerged. Despite a nearly 10% increase in USDOT staff, the Biden administration was unable to process the grants in a timely manner. For instance, as of January 31, 2025, the National Infrastructure Investments grant program (currently known as BUILD; previously RAISE and TIGER) had only obligated 20.4% and outlaid just 2.4% of funds available under its $10 billion in IIJA budget authority. USDOT claimed that the grants were slowed due to “accountability” factors. But an analysis of the program showed that much of the internal USDOT documentation was missing, which belies accountability justifications. Regardless, discretionary grants fail to serve a purpose if USDOT does not disburse the funds.

In summary, USDOT discretionary grant programs lack focus, have become overtly political, and cannot be executed in a timely manner. It’s time for Congress to reduce, consolidate, and refocus DOT discretionary grants. In doing so, Congress should codify in statute quantitative scoring weights that guide the selection of projects based on their performance to the following criteria: reducing congestion, improving mobility, improving safety, and facilitating interstate commerce.

Recommended reform principles:

• Reduce the number of discretionary grant programs to a maximum of one per mode of transportation.
• Focus on the core national transportation priorities of reducing congestion, improving mobility, improving safety, and facilitating interstate commerce.
• Establish quantitative project scoring criteria in statute to ensure the reformed discretionary grant programs consistently meet national transportation priorities.
• Fund transportation projects only. Federal transportation funding should not be used for environmental or community development projects. The federal government has other programs to fund those projects if they are justified.
• Increase the quality and the quantity of documentation explaining the decision-making process. Review Team meetings should include officially recorded notes of all projects, indicating the reasons for approval or rejection of each project. All notes should be posted online to the USDOT website.

Prioritizing maintenance in federal transit programs

In recent decades, approximately 20% of the funding in each surface transportation reauthorization bill has been allocated to mass transit. The federal government typically allows transit capital projects (such as those funded by the New Starts, Small Starts, and Core Capacity programs) and transit maintenance projects (State of Good Repair program) to be funded with 80% federal money and 20% local money.

Many of the mass transit systems across the country are in poor shape, in part because they direct money to costly new capital projects rather than needed maintenance. When Congress writes and passes the next surface transportation reauthorization bill, it should encourage maintenance projects by lowering the maximum federal share for capital projects.

State highway systems are generally in good condition. Reason Foundation’s most recent Annual Highway Report found that of the nine categories focused on performance, the states made significant progress in six of them. In contrast, many rail transit systems are increasingly in poor condition. Major mass transit agencies are using federal funding for new capital projects that should not be priorities due to the significant backlogs in maintenance and other system needs. 

For example, the Washington Metropolitan Area Transit Authority built the Silver Line in largely low-density suburban Virginia and is studying a new $40 billion line connecting National Harbor with Rosslyn. Meanwhile, its existing rail network has been plagued by collisions, derailments, and increased crime in recent years. Similarly, New York’s Metropolitan Transportation Authority (MTA) has had a series of service breakdowns and faces major public safety problems. Many other major transit systems are encountering similar problems.

Unfortunately, many transit agencies prioritize capital projects over ongoing maintenance needs. Part of this problem is structural. Most of the mass transit agency boards across the United States are composed of political appointees, who often favor big new projects that enable ribbon-cuttings and photo opportunities. As a result, there is often a built-in bias towards building new rail projects over improving existing transit services. This dynamic helps explain why there have been more than 20 new light-rail lines added over the last 20 years, despite many of the rail projects failing to increase transit ridership.

Additionally, new rail expansions can sometimes mean cuts in bus service. When the Dallas Area Rapid Transit (DART) Authority and Houston Metro added new light-rail services, for example, they cut existing bus service. This resulted in fewer riders using public transit after adding rail service at great cost.

With reduced transit ridership due to the COVID-19 pandemic, this is not the time to add costly new capacity. As of January 2025, ridership on U.S. rail transit systems is at 78% of 2019 levels. Prior to the pandemic, many systems had seen ridership declines over the preceding decade. Rail transit ridership is increasingly unlikely to recover to 2019 levels within the next decade, if ever. Remote work remains several multiples above transit’s share of commuting and is likely to persist at high levels. Long-term trends in ride-hailing services and the future availability of automated vehicles are also likely to reduce transit ridership.

Given these circumstances, Congress should prioritize maintenance over capital expansion projects by capping funding for New Starts, Small Starts, and Core Capacity grants at a 50% maximum federal share. The maximum federal share for the State of Good Repair grants should remain at 80%.

View Reason Foundation’s recommended legislative text here.

Improving public transit efficiency

Following the onset of the COVID-19 pandemic, public transit systems throughout the United States experienced an unprecedented ridership collapse as people stayed home and avoided crowded public spaces. While most disease mitigation measures have since been abandoned, the impact of the pandemic continues to be felt in various ways, including persistent changes in travel behavior. One consequence has been a muted transit ridership recovery, which stands at approximately three-quarters of the pre-pandemic ridership level in the United States. Depressed transit ridership has been met with unprecedented public subsidies, especially from the federal government. These two trends resulted in a steep decline in transit productivity.

This decline has alarmed policymakers. However, while conditions have substantially worsened in recent years, public transit productivity has trended downward since the end of World War II, largely due to increasing household incomes, growing private automobile ownership, and the dispersal of households and then workplaces into the suburbs. Between 1960 and 2019, the inflation-adjusted operating costs more than quintupled while ridership remained flat.

Following the onset of the COVID-19 pandemic, public transit ridership collapsed. As of 2024, nationwide ridership had only recovered to approximately 78.4% of 2019 levels. More recent estimates from May 2025 show transit ridership at 80.6% of 2019 levels. Much of this ridership decline can be explained by changes in work travel. Many transit systems were designed to facilitate journeys to and from work in central business districts, and working from home remains two to five times its pre-pandemic share of “commuting”—and four to eight times the share of mass transit commuting—depending on how it is measured.

Depressed ridership led Congress to authorize unprecedented federal subsidies for transit agencies. Supplemental COVID-19 appropriations during FYs 2020 and 2021 provided $69.5 billion in emergency support for transit agencies, equivalent to nearly five years of pre-pandemic federal transit funding. The Infrastructure Investment and Jobs Act, enacted in FY 2022, increased federal transit funding by 67% over the levels previously authorized by the Fixing America’s Surface Transportation (FAST) Act of 2015 in nominal dollars.

This large increase in federal funding allowed transit agencies to continue to provide service close to pre-pandemic levels, with transit service provided between 2019 and 2023 falling by only 10.3% (in vehicle revenue miles) despite ridership declines of 29.3%. These dynamics had predictable effects on transit labor productivity, with productivity declines almost entirely driven by decreased ridership.

As historical experience with transit subsidies has shown, advancing transit efficiency is not a simple question of additional funding. Making better use of existing resources must be prioritized to avoid counterproductive subsidy policies that merely deepen and prolong the transit’s productivity crisis. Two strategies to advance transit productivity show particular promise:

• Competitive contracting: Under public-private partnerships, transit agencies can contract out transit service provision to private firms. The agency would serve as the coordinating and oversight entity, developing performance requirements and ensuring private partners adhere to those requirements embedded in their contracts. A 2017 study estimated that contracting out bus service in the United States could reduce operating costs by 30%.
• Transit vehicle automation: Urban rail transit is increasingly automated outside the United States. A 2023 study comparing rail lines in the United States and fully automated lines abroad estimated automation could potentially reduce U.S. operating costs by 46%. In addition to rail transit automation, numerous companies are developing automated road vehicles. One rubber-tire automated transit company that is developing two projects in California claims it can reduce operating costs by approximately 80% compared to average costs faced by conventional transit systems.

Unfortunately, both competitive contracting and automation face substantial deployment barriers in the United States. Section 13(c) of the Urban Mass Transportation Act of 1964 established transit worker labor protections. This provision was included to ensure collective bargaining agreements continued to be honored during the period when transit systems and their workforces were transitioning from heavily unionized private ownership to—at the time—sparsely unionized government ownership.

Section 13(c) requires transit agencies that receive federal funding to certify employee “protective arrangements” with the Department of Labor. As a consequence, transit agencies are greatly constrained in enacting any operational change involving employees. Section 13(c) generally requires transit agencies to either incur substantial upfront costs to buy out affected employees or delay the realization of labor-saving benefits. Transit agencies largely dependent on annual government appropriations face a strong financial disincentive to adopt practices and technologies that would improve service and reduce growing operating subsidies.

Transit employee labor protections included as part of the Urban Mass Transportation Act of 1964 were designed to address the particular circumstances of the time, when just 2% of state and local government employees were authorized to collectively bargain. But this transition period has passed, and all affected employees have long since retired. Further, most states have authorized public-employee collective bargaining since the 1960s, with 63% of state and local employees being authorized to collectively bargain as of 2010.

Section 13(c) exists alongside federal, state, and local labor laws that apply to public-sector workers. Importantly, federal transit labor protections supplement rather than substitute for other general labor protections. As a result, Section 13(c) provides transit workers—and only transit workers—with special protections beyond those enjoyed by other government employees.

This has two important implications for policymakers. First, eliminating Section 13(c) special transit worker labor protections would merely level the playing field between transit workers and other government employees. All other federal, state, and local labor policies that apply to government employees would continue to apply. Second, repealing Section 13(c) would not automatically usher in transit public-private partnerships or automation. Rather, it would remove an impediment to transit agencies seeking to negotiate more flexible labor contracts in the future.

Reason Foundation’s recommended legislative text:

(a) Section 5333 of Title 49, United States Code, is amended by striking subsection (b).

Clearing a bureaucratic roadblock to safer driverless trucking

Autonomous commercial motor vehicles have great potential to improve roadway safety and logistics efficiency in the United States. Developers have been successfully validating their technology on U.S. public roads for years and are now prepared to enter commercial service. However, outdated federal regulations will pose challenges. One in particular—the requirement that operators of commercial motor vehicles stopped on or on the side of highways place warning triangles or flares around their disabled vehicles—presents a unique barrier that Congress can quickly address.

The Department of Transportation has long required operators of commercial motor vehicles that are disabled in highway traffic lanes or shoulders to immediately exit their vehicles to place reflective warning triangles or flares in order to alert other motorists of the potential hazard. The requirement for the placement of roadway warning devices makes intuitive sense, despite the limited empirical safety evidence supporting it.

The warning device rule poses a unique challenge for driverless operations of automated commercial vehicles because it implicitly assumes an operator will be seated in the vehicle and able to immediately exit the cab to place warning devices. This rule was never intended to apply to driverless commercial motor vehicles, which had not yet been conceived when the warning device placement requirement was promulgated in 1972.

In January 2023, automated vehicle developers Aurora and Waymo petitioned the Federal Motor Carrier Safety Administration (FMCSA) for an exemption from the warning devices requirement. To ensure the broader safety intent was preserved, the petitioners proposed that driverless, autonomous commercial vehicles would, in lieu of the warning device placement requirement, be equipped with cab-mounted warning beacons.

The warning-beacon system Aurora and Waymo proposed would consist of at least one rearward-facing light mounted on each side of the cab and at least one forward-facing light mounted on the front of the cab. The warning beacons would be installed at some point between the upper edge of the sideview mirrors and top of the cab for both forward- and rearward-facing lights. The companies provided two studies showing that cab-mounted warning beacons would achieve a level of safety at least equivalent to the warning-device requirement.

In December 2024, the FMCSA denied the exemption petition, citing a lack of data on the safety equivalence of cab-mounted warning beacons. This justification was especially odd because the agency concedes it has never conducted any research on the effectiveness of its warning-device requirement in enhancing safety. The suggestion from FMCSA seems to be that there is no official safety baseline by which to compare alternatives to warning devices, which thereby renders the agency unable to consider alternatives—even those that offer superior safety. If true, this greatly undermines the supposed safety basis for the existence of this longstanding rule.

Setting aside the arbitrariness of FMCSA’s warning-device rule, Congress can easily resolve this bureaucratic roadblock to safer driverless operations by requiring the agency to promulgate amendments to its regulations to explicitly exempt commercial motor vehicles from the warning-device requirement if those vehicles are equipped with cab-mounted warning beacons.

View Reason Foundation’s recommended legislative text here.

Advancing performance-based rail safety regulation

New technologies are increasingly reshaping transportation systems. Various types of automation technologies can significantly improve transportation safety and efficiency. With respect to freight rail, the ability to adopt new technologies in the face of increasingly automated trucking is also a competitive imperative.

One problem is that freight rail safety regulations promulgated by the Federal Railroad Administration (FRA) are often overly prescriptive, which limits alternative means of compliance as technology and practices evolve. Related to this problem is that these regulatory requirements often reference outdated technical standards. Figure 1 below compares the standard edition years of nearly 750 specifications, recommended practices, and standards contained in the AAR Manual of Standards and Recommended Practices with the edition years of the standards incorporated by reference in FRA regulations. While this is not quite a like-for-like comparison, it shows a roughly 10-year lag between the latest railroad industry standards and those referenced in railroad safety regulations.

Most FRA regulations incorporating nongovernmental technical standards do not contain update trigger mechanisms (such as the one for FRA brake standards at 49 C.F.R. § 232.307), so any updates will require conventional rulemaking proceedings. This gives agencies more discretion over any potential regulatory changes and increases the length of time to complete a change. Given this cumbersome and uncertain process to address outdated standards already referenced in regulation, the persistent conformity gap between standards and regulations should not be surprising.

One simple example of the problem of overly prescriptive rail safety regulations is related to automated track inspection (ATI). The benefits of ATI include more reliable defect detection, more robust maintenance data analysis and planning, redeployment of visual inspectors to higher-need areas and for infrastructure that cannot be inspected by ATI equipment, reduced human exposure to safety hazards in the field, and reduced delays to trains in revenue service.

While it has long acknowledged the benefits of ATI, FRA in 2021 reversed course by denying multiple ATI waiver requests, BNSF Railway challenged FRA’s decision to deny it an expanded ATI waiver in federal court, which ruled in March 2023 that regulators violated the Administrative Procedure Act’s prohibition on “arbitrary and capricious” acts and ordered FRA to reconsider its decision. In June 2023, FRA again denied BNSF’s ATI petition. BNSF challenged this second denial in the same federal court, which in June 2024 again ruled against FRA and ordered the agency to grant BNSF’s ATI waiver petition.

A more complex example of the problem relates to the automation of revenue-service rail vehicles that do not resemble conventional freight trains. In August 2023, two short-line railroads owned by Genesee & Wyoming (G&W)—the Georgia Central Railway and Heart of Georgia Railroad—submitted a petition to test new rail technology developed by Parallel Systems. The proposed pilot would take place on 160 miles of track between Pooler near the Port of Savannah to a large inland distribution hub in Cordele in central Georgia.

Parallel was founded in 2020 by two former SpaceX engineers and has developed battery-electric, self-propelled railcars designed to transport standard 40-foot shipping containers weighing up to 65,000 pounds at up to 25 miles per hour. Parallel’s railcars can be operated individually or in platoon formation. When operated in a platoon, Parallel’s railcars won’t be mechanically coupled; instead, they are equipped with bumpers and will touch one another but remain individually powered and controlled. This allows them to reduce stopping distance by 90% compared to conventional freight trains. Perhaps most significantly to the broader economy, the technology is designed to serve local container markets traditionally dominated by trucks—breaking the so-called “500-mile rule” after which rail is competitive with trucks.

In January 2025, FRA granted the G&W/Parallel test petition. Testing was scheduled to begin in April. But to conduct this test under FRA approval, G&W needed to receive a waiver granting relief from 33 FRA regulations, including:

• Part 218 Operating Practices
• Part 229 Locomotive Safety Standards
• Part 231 Railroad Safety Appliance Standards
• Part 232 Brake System Safety Standards for Freight
• Part 236 Signal and Train Control Systems
• Parts 240 and 242 Engineer and Conductor Qualifications

If this test is successful, waivers would still be required to operate Parallel’s rail vehicles. The next step for FRA would be to begin the lengthy process of updating the implicated regulations so that they can accommodate this new technology. While most of these requirements can by changed by FRA through rulemaking, the automatic coupler requirement is statutory (49 U.S.C. § 20302(a)(1)(A)). This means that for Parallel-style self-propelled railcars to be entered into mainstream commercial service, Congress will need to modernize its legacy coupler statute.

These are just two examples of the problems of overly prescriptive, outdated rules. New technologies will inevitably be invented and will run into the same policy barriers. To ensure that freight rail can remain a competitive mode of cargo transportation in the future, Congress should examine structural regulatory reforms to identify and modernize rail safety regulations in a performance-based manner.

Recommended reform principles:

Congress should consider the approach proposed by the RAILS Act (S.1451) in the 115th Congress. That bill included future-oriented provisions that could be adopted, such as:

• Requiring FRA to consider performance-based alternatives whenever proposing or adopting a rule;
• Streamlining the waiver petition process for innovative approaches to safety;
• Integrating the improved safety innovative waiver process with regulatory modernization; and
• Requiring FRA to conduct periodic comprehensive reviews of its rules, orders, and guidance documents to assess their effectiveness, consistency, and whether they reflect the current best technologies and practices.

In addition, Congress should modernize its legacy automatic coupler statute at 49 U.S.C. § 20302(a)(1)(A) to ensure that novel rail vehicles that do not rely on couplers are not subject to these requirements.

The post Recommendations for the surface transportation reauthorization bill appeared first on Reason Foundation.

Current estimates say the high-speed rail system’s first segment in the Central Valley, connecting Merced and Fresno, may open in 2033, eight years from now and a quarter of a century after the 2008 Prop. 1A vote approving the project. The total estimated cost of the system is now over $100 billion.

At this point, it is almost universally agreed upon that it is doubtful, at best, that the high-speed rail line will ever reach the major metropolitan areas of Los Angeles or San Francisco. So, it is time to ask: How will the state wind down the project, and what should the California High-Speed Rail Authority do with the land it acquired?

First, the state needs to admit defeat. The Mercury News asked a team of 13 university economics professors and executives across the political spectrum if it was time to step away from the high-speed rail project. Twelve of the 13 said yes. The $9.95 billion approved in 2008 to start a rail project originally estimated to cost $33 billion was never realistic. As a Reason Foundation and Howard Jarvis Taxpayers Association study warned at that time, the original business plan underestimated costs, overestimated ridership, and lacked serious discussion of construction costs, train capacity, service levels, and possible speeds and travel times.

Further, for political reasons, the government decided that instead of the rail system running in a straight line between Los Angeles and San Francisco, or straight along I-5, it would veer off to run through multiple parts of the Central Valley. This was intended to build political support for the project in the region. But it increased the possible travel times, making them slower than promised, and almost doubled the cost. From there, the mistakes piled up. Rather than start with Los Angeles or San Francisco, places conducive to high-speed rail due to their large population, employment bases, existing urban transit service, and percentages of high-income workers, the state did the exact opposite, starting in the Central Valley.

Today, an orderly wind-down of the rail program would be most beneficial. Stopping the work is technically as easy as the California High-Speed Rail Authority ordering a pause on all construction activities. The state may have to pay some contractors a termination fee, but that is a fraction of the costs of completing the line.

California may also have to remove some of the tracks. Since the track is being built on state-owned right-of-way, the agency could contract with an outside entity to remove or sell it as is and let the new owners remove it. In the Central Valley, 44% of households are renters, often because there’s a lack of housing supply. Selling the rail project’s Central Valley land to homebuilders would allow the construction of many homes, which could help decrease housing prices across the region.

In walking away from the rail plan, the biggest cost will be that the state must raise revenue to pay off the bonds and the debt already accumulated from the project. Even if the project is canceled, the debt won’t be. But since studies show the train system would lose millions of dollars annually if it ever started operating, paying down the debt is still cheaper for taxpayers. It’s a painful choice for policymakers, but it is time to abandon California’s failed high-speed rail project.

A version of this column appeared in the Orange County Register.

The post Walking away from the California high-speed rail project would be best for taxpayers and the state appeared first on Reason Foundation.

This gridlock is more than just a pain for drivers. It harms the state’s economy. Inrix finds traffic congestion costs the average Los Angeles driver 89 hours a year and drains $8 billion annually from the economy. The traffic also limits the number of jobs accessible to individuals. For instance, without traffic delays, workers could reach four times as many jobs as they can today.

Over the past decade, residents have been leaving California for various reasons. A 2024 poll by the University of California-Irvine found that 50% of the state’s residents are considering leaving. While traffic congestion isn’t the primary reason for fleeing, it is a contributing factor as people consider high housing prices, the employment opportunities they’ll have in their area, their commute times from places they can afford to live, and the quality of life they’ll have with those commutes.

Decades ago, California’s solution to reduce congestion was building high-occupancy vehicle (HOV) lanes, or carpool lanes. Initiated in the 1970s, the state added carpool lanes to hundreds of miles of highways, including I-5, I-405, SR 22, and SR 55.

Unfortunately, California has learned that HOV lanes suffer from the so-called Goldilocks phenomenon. They’re never quite right. Carpool lanes tend to experience too much traffic (they are too hot) at rush hour and too little traffic (they are too cold) during off-peak hours. If speeds in HOV lanes are the same as those in the congested general lanes, drivers have little incentive to carpool. When the lanes are underused, drivers stuck in traffic in the general lanes rightly view the HOV lanes as a poor use of valuable roadway space.

In recent years, the California Department of Transportation (Caltrans) has taken a smart approach to reducing congestion by converting HOV lanes to high-occupancy toll lanes. It is also constructing new toll lanes in some of the region’s busiest highway corridors. The high-occupancy toll lanes still allow carpools, vanpools, and buses to travel in them for free, while also allowing single-occupant vehicles to use them for a toll.

One of these initiatives is the proposed I-5 Managed Lanes Project, a 15.5-mile corridor between Red Hill Avenue and the Orange-Los Angeles County line. One key to the project’s likely success is a variably priced toll, which would rise and fall based on traffic congestion and ensure the volume of cars in the lanes is always just right.

Overall, the proposed express lanes would reduce congestion along the I-5 corridor. Less stop-and-go traffic also means the project would reduce emissions. The revenue generated by solo drivers using the toll lanes would be used to maintain the lanes and fund improvements in that corridor that the state doesn’t have money for otherwise.

Transportation planners have wanted to implement pricing since the 1970s. It is the best way to fund highways sustainably and address traffic congestion. With today’s all-electronic tolling technology, collection costs are low. As Orange County express lane drivers already know, motorists can establish an account, place a small transponder on their vehicles, and the tolls are automatically deducted as they pass under a gantry (sticker reading devices).

The SR 91 express lanes pioneered these lanes and have been highly successful. Ideally, Southern California would have a network of connected express lanes that drivers and businesses could use anytime they need to guarantee themselves a congestion-free trip. The proposed I-5 lanes would help reduce the travel time of emergency vehicles, allow us to get to a child’s soccer game or pick them up at daycare, and ensure we can deliver an urgent package or get to an important appointment on time.

Southern Californians need reliable, free-flowing trips that make it easier to access jobs and services and improve quality of life. Adding more express lanes can help.

A version of this column appeared in the Orange County Register.

The post Proposed I-5 express lanes would help Southern California’s drivers and economy appeared first on Reason Foundation.

The transportation community’s ‘plan A’ has been implementing a high-tech geographic positioning system, or GPS-based system, to calculate vehicle mileage. However, current GPS methods are expensive, and rollout has been slow. Given the need to implement an alternative revenue source in the near future, it’s time to move on to the transportation community’s ‘plan B’ and start the mileage-based user fee (MBUF) transition with low-tech odometer readings.

The problem with fuel taxes did not pop up overnight. Since the federal fuel tax was last increased in 1994, the tax’s purchasing power has decreased by 50%. Some of the decline is due to the tax not being indexed for inflation. But some of the problems with the fuel tax today stem from the growing number of electric vehicles, which don’t buy gas or pay fuel taxes at all, along with hybrid vehicles and the growing fuel-efficiency of internal combustion engine vehicles that can drive further while paying less in fuel taxes than the cars and trucks of decades ago.

Elected officials don’t tend to take action, especially when it comes to raising or replacing taxes, until a system reaches a crisis point. A full transition from the fuel tax to a mileage-based user fee will likely take 10 to 15 years, so, in this case, we’re already reaching the crisis stage of needing a sustainable revenue source to replace fuel taxes to fund the maintenance and construction of our roads and bridges.

Today, only five states have permanent mileage-based user fee programs: Hawaii, Oregon, Utah, Vermont, and Virginia. Three of these state MBUF programs are open only to electric vehicles.

Only one state, Hawaii, has plans to require all vehicles to participate in the MBUF program by 2033. Another state, Oregon, is considering making mileage-based user fees mandatory.

The state with the most participants in its mileage fee program, Virginia, with 40,000 participants, has been hampered by high administrative costs thus far. That puts Virginia’s leaders in the awkward position of wanting to encourage driver enrollment for policy reasons but discourage it for revenue reasons.

Mileage-based user fees could be an improvement over the fuel tax. For example, with a fuel tax, all vehicles pay the same rate regardless of the type of road used or the time of day traveled. With a full, GPS-based MBUF, agencies can charge differing rates for driving on an Interstate compared to driving on a local street. With the fuel tax, all vehicles pay a similar tax regardless of the type of road, time of day or traffic congestion. With a mileage-based user fee, transportation agencies could charge more to drive on the highway during rush hour than on the same road at 10 pm.

However, charging different rates based on the type of road or time of day requires the adoption and acceptance of technology, specifically GPS. With GPS, which many of us are familiar with, a receiver detects broadcast radio signals and uses the time of arrival to calculate the vehicle’s distance from orbiting satellites. Using the distance calculations from satellites, a receiver can determine its position and time.

Unfortunately, this gold-standard technology for mileage fees has its drawbacks. First, replacing fuel taxes with GPS-based mileage fees seems unpopular in the United States. In polls and surveys, even after the technology has been explained, only about half of Americans say they would voluntarily participate in a GPS mileage fee program.

GPS programs are also expensive to administer. One advantage of the fuel tax is that the cost of collection is less than 3% of the revenue generated. Most researchers predict that MBUFs at scale can have a cost of collection close to 5%. However, current technologies have collection costs anywhere from 10% to 40%.

These common concerns and expenses mean that the rollout of GPS systems is going to be slow. Unfortunately, we might not have the luxury of time. The greatest threat is that, without a reliable users-pay/users-benefit funding mechanism, we will default to funding transportation from the general fund. Already, more than 20 states subsidize their highway programs with general funds. Some states receive almost 50% of their funding from the general budget.

Using general fund revenue for transportation funding has several problems. Ideally, road users pay the full costs of using the roads and bridges they drive on. With money from the general fund, since revenue cannot be guaranteed each year, state transportation departments cannot use it to bond long-term major projects. Transportation agencies cannot factor the general fund money from future years, which they might not get from the legislature for any number of reasons, into their planning.

Transportation would also compete with other policy and spending priorities that get money from the general fund, such as education, law enforcement and health care. In competing for limited general fund dollars, transportation almost always loses.

These challenges are why transportation leaders must replace the fuel tax with odometer readings. This non-GPS, more straightforward approach does not allow differential pricing. But odometer readings could be implemented today in many states with no new technology needed. In states with annual vehicle inspections, mileage data is already collected. In regions with emissions checks, the data could also be gathered. In other states and regions, repair shops could collect this data when vehicles are serviced. Given that the infrastructure already exists, collection costs would be low.

To ensure affordable payments, drivers could be given a choice of paying for the miles they drive once a year, semi-annually, or quarterly. Many states use this method for vehicle registration and property taxes. With odometer readings, the fuel tax could be sunsetted for all drivers. The mileage fee would replace the fuel tax, preventing double taxation.

Transportation leaders need to be practical about what works and implement it. The transportation community cannot be so focused on winning the battle for GPS-based approaches that it loses the principle of users-pay, users benefit for road funding. GPS-based mileage-based user fees are likely the future of road funding. But odometer readings are available today and are a step toward shifting away from unsustainable fuel taxes while maintaining the critical users-pay, users-benefit principle.

The post Mileage-based user fees without GPS might be the best step to replace fuel taxes appeared first on Reason Foundation.

For the past 100 years, most arterial highways throughout the United States, including the Interstate Highway System and most state highways, have been funded by the motor fuel tax. However, over the last 20 years, due to the combination of a growing number of electric vehicles, a growing number of hybrid vehicles, and the greater fuel efficiency of vehicles powered by internal combustion engines, fuel tax revenue has declined significantly. Given these trends, the motor fuel tax will not be a sustainable revenue source for roads and highways over the next 100 years.

The motor fuel tax can be compared to a rock star on his farewell tour. It is still producing revenue, but it is not as effective a mechanism as when it was at its peak. Further, most transportation analysts know that it is time for something more sustainable.

Over the past 20 years, researchers have examined a number of different alternative transportation funding sources, such as a freight charge per ton, tire fees, registration fees, and sales taxes. About 10 years ago, officials with the American Association of State Highway and Transportation Officials (AASHTO) created a comprehensive funding matrix. The impetus for the chart was the decline in revenue from the motor fuel tax. AASHTO was examining how fuel tax revenue could be replaced. The organization looked at more than 35 funding sources based on the users-pay/users-benefit principle (in which people who use roadways more pay more, those who use roadways less pay less, and those who do not use them pay nothing at all) and using general funds, the most significant of which are detailed below in Table 1.

After looking at all of the options, researchers determined that the mileage-based user fee (otherwise known as a road usage charge, road charge, or vehicle-miles traveled fee) was the most promising of all of the revenue sources that they studied. A mileage-based user fee (MBUF) charges drivers based on the number of miles driven, compared with the fuel tax, which charges drivers based on the number of gallons of fuel consumed, or a sales tax, which charges consumers based on the value of goods purchased. The mileage fee ranked extremely high in economic efficiency and equity, and medium-high in implementation and administrative efficiency.

From a fiscal perspective, mileage-based user fees would generate $246 billion over an estimated six-year period, dwarfing every other revenue source, including a 10% increase in the motor fuel tax rate ($120 billion) and implementation of a gasoline sales tax ($156 billion).

Further, MBUFs were the only option that could generate enough revenue to replace the motor fuel tax (more than $200 billion for automobiles and trucks combined), more than any other option in the AASHTO matrix.

MBUFs also more closely adhere to the users-pay/users-benefit principle. In addition to being an economic advantage, it is also a political one. Transportation must compete with other policy priorities such as health care, education, and defense. And transportation usually loses out to those other priorities in a fight for general revenue sources, such as sales taxes and income taxes. Therefore, any revenue sources that do not rely on the users-pay principle are unlikely to lead to sustainable transportation revenue.

Even though MBUFs scored well in implementation and administrative efficiency, there is room for improvement. Parts 3 and 4 of this policy brief examine some of these challenges and how they can be addressed.

Equity implications are mentioned multiple times in the 2015 and 2019 versions of the AASHTO matrix. Specifically, the report examined geographic equity and equity among drivers of different propulsion methods. While many drivers would assume that rural residents would pay more, many rural drivers would pay less in MBUFs than in fuel taxes because they tend to drive older, less fuel-efficient vehicles. With fuel taxes, drivers pay varying amounts depending on their vehicle’s powertrain, despite the fact that all light-duty vehicles wear out pavement at about the same rate. Drivers of electric vehicles pay no fuel tax at all, while drivers of hybrid vehicles pay approximately half of what drivers of conventional fuel vehicles pay. With MBUFs, all light-duty vehicles that travel the same distance pay the same amount, regardless of powertrain.

The AASHTO matrix did not seek to explain MBUFs, but in some ways, they are most similar to what Reason Foundation calls 21st-century per-mile tolling. Both mileage-based user fees and tolling charge drivers a per-mile rate. The biggest difference is in the geography. Tolls are charged for a specific stretch of highway, while MBUFs are charged for the entire system. For this reason, both are better user fees than the fuel tax, which charges drivers a per-gallon rate regardless of where they drive.

However, both MBUFs and 21st-century tolling would be different from today’s toll roads, which often employ double taxation. Currently, motorists on most toll roads pay both a fuel tax and a toll, with only two states offering a rebate on fuel taxes. Motorists may also pay a variable toll on express toll lanes, although that toll is designed to manage congestion, not to raise revenue. In mileage-based user fee pilot and permanent programs where money is exchanged, drivers receive a rebate for any fuel tax that they pay. It is crucial that any potential MBUF pilot refunds fuel taxes and tolls to prevent any double taxation.

Regarding implementation, because they charge for the exact amount of roadway that a vehicle uses and can be varied based on the type of highway, many transportation researchers consider GPS-enabled and location-based MBUFs to be the ideal solution. Currently, pilot and permanent MBUF systems are divided into high-tech and low-tech MBUFs. The following section of this brief provides a brief overview of how a high-tech MBUF functions.

Full Policy Brief: Low tech mileage-based user fee options

The post Low tech mileage-based user fee options appeared first on Reason Foundation.

For more than 100 years, states have relied on fuel taxes to fund the majority of their highway needs. However, the gas tax is becoming an increasingly unsustainable revenue source due to a combination of electric vehicles, hybrid vehicles, and most importantly, the increased fuel efficiency of vehicles with traditional internal combustion engines. The gas tax once worked as a highway funding source, but it is no longer sustainable. I’ve written before that the gas tax is like a rock band with a good career and is on a farewell tour, but everybody knows the band’s best days are behind it.

Indiana has a funding problem. The state lacks the revenue to maintain its highways adequately. Indiana ranks in the bottom third of all states in terms of interstate pavement condition, according to Reason Foundation’s Annual Highway Report.

State Rep. Jim Pressel (R-District 20), chair of the House Transportation Committee, introduced and argued for the bill. Despite pushback from some Republicans, the bill passed overwhelmingly (74-21 and 38-10) in the state’s House and Senate, respectively. The governor chose to sign the bill into law when he could have let it become law without his signature.

As the fuel tax produces less revenue, Indiana’s interstate highways are also reaching the end of their design life. Intended to be rebuilt after 50 years, many highways are 60 or 70 years old. The state cannot just add another layer of asphalt and hope the overlay solves the problem. These roadways need to be rebuilt from the roadbed up, and this type of reconstruction is not cheap. Many of these highways also need to be widened due to annual increases in vehicle miles of travel. These traffic volume increases, which had slowed in the last decade, are now increasing again due partly to growth in freight movement.

The need to rebuild highways as the gas tax becomes unsustainable is why tolling is so essential. It is important to note that this is not your grandfather’s ‘throw-coins-as-you-stop-at-the-tollbooth’ operation. This is 21st-century all-electronic tolling, which has been adopted by most toll roads nationwide. Electronic tolling is much faster than 20th-century tolling. Wehicles don’t have to wait in line, stop, and wait for change or for the toll gate to rise. It is also safer because there aren’t any tollbooths, which have a disproportionate number of traffic accidents due to weaving and changing travel speeds. And the collection costs have declined from 25% to about 5% because tollbooth operators are not needed, and there is less physical infrastructure to manage.

Tolling has other significant advantages for funding highways. Tolling ensures that users pay the full costs of the highways they drive on. Interstates are built to a higher standard and have larger traffic volumes, so they cost more to build and maintain than other roads and streets. However, with the current gas tax, drivers pay the same amount per mile to use each. Further, out-of-state drivers are far more likely to be on Interstates than local roads. So, in some cases, the fuel tax subsidizes out-of-state travelers who do not buy fuel in Indiana.

Tolling also helps ensure proper maintenance. The tolls should be high enough to provide the revenue needed for the highway’s ongoing maintenance. The Indiana Toll Road has a lower International Roughness Index (indicating smoother pavement and fewer potholes) than the state’s Interstate highways

Long-term infrastructure needs reliable funding and should be funded using long-term finance rather than annually out of tax money. Tolling provides the revenue to service long-term bonds. When most people buy a house, they do not pay cash up front. Rather, they finance it over time. The same is true for state transportation departments. Instead of waiting until they have all the funds to build the project, they can finance it over time.

Finally, tolling is a good fit for public-private partnerships (P3s). Indiana was one of the early adopters of P3s and has one of the most comprehensive pieces of tolling legislation. In 2006, Indiana used a P3 for a long-term lease of the Indiana Toll Road, which was in bad shape because the state refused to raise the toll rate for 20 years despite the roadway maintenance costs continuing to climb.

Indiana is a pioneer in using tolling existing Interstates for reconstruction. While the state might be the first to authorize tolling its existing Interstate highways, it won’t be the last. Last year, Michigan released a study that found the tolling of interstates feasible. North Carolina, Virginia, and Wisconsin have each examined tolling some or all of their Interstates as the need to rebuild them grows. With the gas tax being unsustainable and the need to modernize aging Interstates growing, other states will need to follow Indiana’s lead.

The post Indiana becomes first state to approve interstate tolling to rebuild highways appeared first on Reason Foundation.

Governments have used long-term public-private partnerships for surface transportation projects for the past 60 years.

As documented by José A. Gómez-Ibáñez and John Meyer, the phenomenon began in the 1950s and 1960s, as France and Spain emulated the model pioneered by Italy prior to World War II. Italy’s national motorway systems were developed largely by investor-owned or state-owned companies operating under long-term franchises (called concessions in Europe).

In exchange for the right to build, operate, and maintain the highway for a period ranging from 30 to 70 years, the company could raise the capital needed to build it (typically a mix of debt and equity).

The model spread to Australia and parts of Asia in the 1980s and 1990s, and to Latin America in the 1990s and 2000s. Nearly all the projects in those regions from the 1950s to 1980s were financed based on the projected toll revenues to be generated once the highway was in operation.

Some projects went bankrupt as a consequence of reduced traffic and revenues during severe economic downturns (e.g., the oil price shock of 1974), leading to the nationalization of some companies.

However, in the late 1990s and early 2000s, the governments of France, Italy, Portugal, and Spain all privatized their state-owned toll road companies and formalized the toll concession P3 model.

Australia has allowed several concession company entities to go through liquidation, with the assets (in each case major highway tunnels) being acquired by new operators at a large discount from the initial construction cost.

Other governments in Europe adopted a different form of highway concession. Generally, not favoring the use of tolls, they created the concept of availability payments as a means of financing long-term concession projects.

In this structure, the company or consortium selected via a competitive process negotiates a stream of annual payments from the government sufficient (the company expects) to cover the capital and operating costs of the project and make a reasonable profit. The capital markets generally find such a concession agreement compatible with financing the project via a mix of debt and equity. Since no toll revenues are involved, this model applies to a much broader array of transport and facility projects, including rail transit. In the highway sector, nearly all long-term concession P3 projects in Canada, Germany, the United Kingdom, and a number of Central and Eastern European countries have been procured and financed as availability payment (AP) concessions.

In a small but growing number of cases—major bridges, as well as highway reconstruction that includes added express toll lanes, for example—governments collect the toll revenues and use the money to help meet their availability payment obligations. These cases are called “hybrid concessions” in this report.

Of the top 10 worldwide surface transportation P3s that reached financial close in 2024, four used availability payments, bucking what had been a growing trend over the last seven years. In 2023, seven of the top 10 P3s used availability payments.

The growing use of AP concessions has enabled P3s for projects that do not generate their own revenues, as well as hybrid concessions in which toll revenues help the government cover the costs of its AP obligations.

For the past seven years, almost three-quarters of the largest P3 projects, by financial value, have used availability payment public-private partnerships.

See the full Report here:

The post Annual Surface Transportation Infrastructure Report 2025 appeared first on Reason Foundation.

The Annual Highway Report assesses pavement conditions, safety, traffic congestion, deficient bridges, and the costs associated with roads and bridges across all 50 states in 13 categories. In the latest report, only Alaska—which is not connected to the contiguous 48 states and faces harsh winters and high costs—ranks lower than California.

California’s highways rank in the bottom 10 states in all key pavement condition categories. California’s roads are the worst in the nation in terms of urban arterial road pavement condition, 47th out of 50 in urban Interstate highway pavement condition, 46th in rural Interstate condition, and 41st in rural arterial pavement condition. With some of the nation’s highest gas taxes in the country, fixing potholes and resurfacing roads shouldn’t be too much for drivers to ask.

Miles traveled and traffic congestion are returning closer to pre-COVID-19 pandemic levels, and, unfortunately, California ranks 44th out of the 50 states in traffic congestion. The average driver in the state spends 60 hours a year stuck in traffic congestion, which wastes money and harms the environment. Ultimately, California’s poor roads hurt the economy, increase vehicle maintenance costs for families, and cause people to waste time and fuel stuck in traffic jams.

If you’re looking for anything resembling good news in the report, California is in the middle of the pack — 25th in structurally deficient bridges. But that’s about it. Regarding safety, the state is a disappointing 33rd in urban road fatality rate and 28th in rural road fatality rate.

The disappointing rankings in safety and pavement conditions are even more striking given that California’s highways are among the most expensive in the nation. In spending, California ranks 43rd, meaning it spends more than 42 other states, in capital and bridge disbursements, which cover the costs of building new roads and bridges and widening existing ones. In maintenance spending, California ranks 44th on costs like repaving roads and filling potholes. California’s administrative disbursements, which include office spending that does not contribute directly to road improvements, rank 35th nationwide.

A state can have above-average spending while maintaining a high-quality system. For instance, Utah ranks 47th in capital and bridge disbursement funding, worse than California. However, since all of Utah’s pavement conditions are in the top 10, the state’s overall ranking is a very good 8th in the nation. Neighboring Nevada ranks 36th in capital spending and 49th in administrative expenditures. Yet, because all its pavement conditions are in the top 20, Nevada’s overall ranking is 24th. 

High spending alone is not California’s problem. The problem is that higher spending is not improving pavement quality, reducing traffic congestion, or reducing fatalities.

Evaluating its overall performance and cost-effectiveness against other large and similarly populated states is concerning. California falls significantly behind in cost-effectiveness and road conditions compared to Florida, which ranks 14th in the Annual Highway Report, and Texas, which is 25th overall. Even New York and New Jersey, often near the bottom of the Annual Highway Report’s rankings, now perform better than California.

When it comes to improving in the road condition and performance categories, the state should take immediate steps to improve pavement conditions. It also needs to find a way to reduce urban traffic congestion by adding new capacity and better managing existing highways.

While California may never be able to dramatically lower its road construction and maintenance costs to levels of the average state, it can do a lot more to reduce administrative costs and improve the condition and safety of its highways and bridges. Fixing potholes, smoothing pavement, modernizing deficient bridges, and lowering traffic fatalities are reasonable expectations for drivers and taxpayers. 

A version of this commentary first appeared in the Orange County Register.

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Reason Foundation’s 28th Annual Highway Report evaluates state highway systems on cost versus quality using a method developed in the early 1990s by David T. Hartgen, Ph.D., emeritus professor at the University of North Carolina at Charlotte. This method has since been refined by Hartgen, M. Gregory Fields, Baruch Feigenbaum, and Truong Bui.

Since states have different budgets, system sizes, and traffic and geographic circumstances, their comparative performance depends on both system performance and the resources available. To determine relative performance across the country, state highway system budgets (per mile of responsibility) are compared with system performance, state by state. States with high rankings typically have better-than-average system conditions (good for road users) along with relatively low per-mile expenditures (also good for taxpayers).

The following table shows the overall highway performance of the state highway systems in the 28th Annual Highway Report, primarily using data that each state directly reported to the Federal Highway Administration.

Similar to last year, the top-performing states are a mix of large and small states as well as states that are more urban and more rural. (Tables 1, 2, 3, 4, and Figure 1). Five large-population (more than seven million people) states place in the top 10 of the overall rankings: North Carolina (2nd), Virginia (4th), Tennessee (5th), Georgia (6th), and Ohio (10th).

Numerous factors—terrain, climate, truck volumes, urbanization, system age, budget priorities, unit cost differences, state budget circumstances, and management/maintenance philosophies—all affect overall performance in the Annual Highway Report. The remainder of this report reviews the statistics underlying these overall rankings in more detail.

The overall rankings are not dramatically different from the previous version of the Annual Highway Report. However, three states’ overall ranking improved by double digits this year, while two states’ overall rankings declined by 10 or more spots:

• Idaho improved 19 positions from 34th to 15th in the overall rankings, as rural Interstate condition improved by 34 positions and urban Interstate condition improved by 22 positions. In addition, the rural fatality rate improved by 20 positions.
• Maine improved 11 positions from 32nd to 21st in the overall rankings, as rural Interstate condition improved by 24 positions. Capital disbursements also improved by 12 positions.
• New Jersey improved 10 positions from 44th to 34th in the overall rankings, as administrative and maintenance disbursements improved by 15 and 25 positions respectively. Rural Interstate condition improved by 12 positions.
• Massachusetts declined 20 positions from 20th to 40th in the overall rankings, as rural Interstate condition declined by 23 positions. The state also fared poorly in disbursements. Administrative disbursements worsened by 19 positions and maintenance disbursements declined by 26 positions.
• Arkansas declined 15 positions from 13th to 28th in the overall rankings, as rural fatalities declined by 25 positions and urban fatalities worsened by 39 positions. Capital disbursements also declined by 10 positions.

The post 28th Annual Highway Report appeared first on Reason Foundation.

Each state’s overall rating is determined by rankings in 13 categories, including highway expenditures per mile, Interstate and primary road pavement conditions, urbanized area congestion, bridge conditions, and fatality rates.

The study is based on spending and performance data state highway agencies submitted to the federal government, supplemented by data from the National Bridge Inventory, INRIX, and the American Community Survey. This study also reviews changes in highway performance over the past year. 

Although individual state highway sections (roads, bridges, pavements) deteriorate over time due to age, traffic, and weather, states perform maintenance to keep infrastructure in a state of good repair. They also reconstruct roadways when necessary. As a result, system performance can improve even as individual roads and bridges worsen. Table ES1 summarizes recent system trends for key indicators. The U.S. saw system improvements in some categories from 2020 to 2022, but declines in several other categories.

Between 2020 and 2022, three of the four disbursement measures (Capital and Bridge, Maintenance, and Administrative) for the U.S. state-owned highway system increased (states spent more money on their highway systems in 2022 than in 2020). The other disbursement measure (Other) decreased from the previous report. And when factoring inflation into account, spending has been roughly consistent over all categories during the past five years.

Further, six of the nine performance measures improved, including Rural Interstate Pavement Condition, Urban Interstate Pavement Condition, Rural Other Arterial Pavement Condition, Urban Other Arterial Pavement Condition, Rural Fatality Rate, and Structurally Deficient Bridges (a smaller percentage of bridges is structurally deficient).

Three of the nine performance measures worsened: Urbanized Area Congestion, Urban Fatality Rate, and Other Fatality Rate.

Overall, when adjusting for inflation, states are spending about the same amount of money for a slightly better quality roadway system.

Table ES2 summarizes system trends over the past 10 years.

Over a 10-year period disbursements increased, pavement quality worsened, congestion improved (on a statewide basis), the percentage of structurally deficient bridges decreased, and the fatality rate held steady. The worsening urban Interstate quality and rural arterial pavement quality are a change from the previous 10-year period. Figure ES1 displays this information in a graph.

Figure ES1: Trends in Highway System Performance

Figure ES2 shows each state’s ranking based on 2022 data. The top-performing states tend to be a mix of high-population and low-population states that lean both urban and rural.
Very rural, low-population states may have had a slight advantage before 2019. But since the report changed to using expected disbursements and ratios, that advantage no longer exists. For example, while North Dakota often leads the rankings, this year North Carolina ranked first followed by South Carolina, North Dakota, Virginia and Tennessee.

At the other end of the rankings are Alaska, California, Hawaii, Washington, and Louisiana. Two of the five worst performing states rank in the bottom 11 in population.

A number of states with large populations and/or large metro areas fared well: North Carolina (1st), Virginia (4th), Tennessee (5th), Georgia (6th), and Ohio (10th).

Some states had large increases or decreases in their ratings. The rankings for Idaho, Maine, and New Jersey improved by at least 10 spots.

However, the rankings for Massachusetts and Arkansas worsened by at least 10 spots.

Certain states spend significantly more than the national average. This spending may be justified if these states perform well in other categories. While some states’ disbursements have improved their deficiencies, other states are still performing badly:

• For Capital and Bridge Disbursements, five states have per-mile ratios higher than
  1.5: Washington, Idaho, Alaska, Utah, and Indiana.
• For Maintenance Disbursements, 11 states have per-mile ratios higher than 1.5: Washington, Indiana, Vermont, Oregon, Delaware, Colorado, California, Oklahoma, New York, Massachusetts, and Alaska.
• For Administrative Disbursements, six states have per-mile ratios higher than 2.0: Vermont, Nevada, Delaware, Washington, New Hampshire, and South Dakota.
• For Other Disbursements, three states have per-mile ratios higher than 2.0: Washington, Kansas, and Vermont.

System performance problems in each measured category seem to be concentrated in a handful of states:

• More than 25% of the rural Interstate mileage in poor condition is in just three states: Alaska, Colorado, and California.
• More than 30% of the urban Interstate mileage in poor condition is in just six states: Hawaii, Louisiana, New York, California, Delaware, and Colorado.
• Approximately 13% of the rural arterial mileage in poor condition is in just three states: Alaska, Rhode Island, and Vermont.
• Approximately 40% of the urban arterial primary mileage in poor condition is in just five states: California, Nebraska, Rhode Island, New York, and Massachusetts.
• Automobile commuters in seven states spend more than 60 hours annually stuck in peak-hour traffic congestion: New Jersey, Massachusetts, Delaware, New York, Illinois, Maryland, and California.
• Although a majority of states saw the percentage of structurally deficient bridges decline, nine states report more than 10% of their bridges as structurally deficient: West Virginia, Iowa, South Dakota, Rhode Island, Maine, Pennsylvania, Louisiana, Michigan, and North Dakota.
• Three states have rural fatality rates of 2.0 per 100 million vehicle-miles traveled or higher: Hawaii, Delaware, and Alaska.
• Urban fatality rates continue to worsen as 27 states have urban fatality rates of 1.0 per 100 million vehicle-miles traveled or higher: New Mexico, Alaska, Florida, Hawaii, Arkansas, Indiana, Montana, Tennessee, Mississippi, South Carolina, Colorado, Georgia, Arizona, Louisiana, Delaware, Oregon, Texas, California, Missouri, Nebraska, Oklahoma, Alabama, Maryland, Washington, Connecticut, Nevada, and Michigan.
• Other fatality rates continue to worsen as 25 states have other fatality rates of 1.5 per 100 million vehicle-miles traveled or higher: West Virginia, Oklahoma, South Carolina, Kentucky, Louisiana, California, Oregon, Texas, Tennessee, Arizona, South Dakota, North Carolina, Delaware, Nevada, Arkansas, Kansas, New Mexico, Washington, Colorado, Ohio, Mississippi, Georgia, Illinois, Florida, and Alabama.

System performance improved for some states but declined for others this year, with slightly less than half of the states (21 of 50) making progress between 2020 and 2022. However, a 10-year average of state overall performance data indicates that system performance problems are concentrated in a handful of states. These states are finding it difficult to improve. There is also increasing evidence that higher-level highway systems (Interstates, other freeways, and principal arterials) are in better shape than lower-level highway systems, particularly local roads.

The post 28th Annual Highway Report: Executive summary of findings and state rankings appeared first on Reason Foundation.

1. Advantages of users-pay systems

• Fairness: Those who pay the user fees receive the benefit
• Proportionality: Those who use more highway services pay more, those who use less pay less
• Self-limiting: Limits on how the tax can be used as well as its size
• Predictability: Produces a revenue stream independent of government budgets
• Investment signal: The users-pay mechanism provides a way to answer the question of how much infrastructure to build

2. Other users-pay funding sources

• Increased registration fee: Already on the higher end at $221 per year 
• Tolling: Promising on new capacity, bridges and tunnels but not realistic on surface streets and local roads
• Other options such as tire fees for light-duty vehicles can be expensive to implement and don’t generate sufficient revenue 

3. Non-users pay sources have their own weaknesses 
   • Overall weakness: Cannot be bonded against because revenue is not guaranteed
   • Overall weakness: Planning for projects becomes challenging with uncertain revenues 
   • Statewide sales tax: Must compete with other budget priorities and would create a very regressive tax climate
   • Statewide property tax levy: Would infringe on funding mechanism for local governments and worsen overall housing costs 
   • General fund revenue: Must compete with other priorities; revenue varies significantly from year to year
   • Have Delaware pay for it: Would not survive court challenges  

Full Backgrounder: Transportation revenue options in Maryland

The post Transportation revenue options in Maryland appeared first on Reason Foundation.

Chairman Korman, Vice Chair Boyce, and fellow Members:

My name is Baruch Feigenbaum. I am the Senior Managing Director for Transportation Policy at Reason Foundation, a non-profit think tank. For more than four decades Reason’s transportation experts have been advising federal, state and local policymakers on transportation funding and financing. 

Overview of Testimony

While the federal government continues to delay action on meaningful transportation funding reform, states are leading the way. Understandably, raising taxes is unpopular. And while the motor fuel tax has been a reliable funding mechanism for the past 100 years, due to the combination of an increased number of electric vehicles, an increased number of hybrid vehicles, and particularly the increased fuel efficiency of vehicles powered by internal combustion engines, the fuel tax will not be a reliable mechanism in the future. The fuel tax is like a rockstar on his farewell tour. The time to replace it with something more durable has arrived. 

While states have studied multiple options, ranging from statewide sales taxes to kilowatt-hour fees for electric charging, two national surface transportation commissions, the National Conference of State Legislatures, and several transportation research organizations across the political divide have all recommended that states transition from a fuel tax to a mileage-based user fee (MBUF). Reason Foundation echoes that recommendation. 

There are two basic types of transportation funding sources: those that follow the users-pay principle and general revenue sources. 

A road-use fee, similar to the current fuel tax, follows the users-pay/users-benefit principle. Using this principle to fund and finance transportation projects has at least five benefits:

• Fairness: Those who pay the user fees are the ones who receive most of the benefits, and those who benefit are the ones who pay. This is the same general principle used with other utilities, such as electricity and telecommunications. 
• Proportionality: Those who use more highway services pay more, while those who use less pay less (and those who use none pay nothing). 
• Self-limiting: The imposition of a user tax whose proceeds may only be used for the specified purpose imposes a de facto limit on how high the tax can be: only enough to fund an agreed-upon need for investment. 
• Predictability: A user fee produces a revenue stream that can and should be independent of the vagaries of government budgets. 
• Investment signal: The user-pays mechanism provides a way to answer the question of how much infrastructure to build, assuming that the customers have some degree of say. 

To understand why a consensus has emerged around the users-pay principle and mileage-based user fees, it helps to examine the other options. Other than the fuel tax and MBUFs, there are few other good users-pay options. Increasing registration fees would be one revenue source, but Maryland’s $221 registration fee is already higher than the U.S. average. Tolling is a promising option especially on new capacity and in bridges and tunnels. But surface streets cannot be easily tolled, and Maryland’s eight tolled facilities already generate $1.8 billion in toll revenue. Other user-pay options, such as tire fees for light-duty vehicles, are challenging to implement and don’t raise significant revenue.  

Many of the other funding options, including a statewide sales tax, statewide property tax, use of general fund revenue, or forcing Delaware to pay for the infrastructure, lack that users-pay principle. But the bigger practical concern is the money raised from general taxes is not dedicated to transportation. As a result, it is more challenging for state DOTs to bond against it, reducing the number and speed of projects that they can deliver. And the money can be easily diverted to other purposes. Typically, when transportation competes for funds directly with other state priorities such as education or health care it loses. 

Maryland House Bill 1457 takes the first step in replacing the fuel tax with a mileage-based user fee. By allowing drivers of fuel-efficient vehicles the choice of paying a sliding fee for road usage based on vehicle fuel efficiency or participating in a formal mileage-based user fee program, the bill begins the needed process of transitioning Maryland to a more sustainable road funding mechanism. 

By requiring owners of electric vehicles using the highway system to pay their fair share, the legislation will have a small but real impact on Maryland’s Transportation Trust Fund. While the exact amount depends on whether participants choose the annual surcharge or the mileage-based option, charging the state’s approximately 127,000 electric vehicles the $125 surcharge nets the state $16.5 million while charging the state’s 158,000 hybrid vehicles the $100 surcharge raises $15.8 million. 

However, the bill is not primarily about raising revenue. In fact, MBUF program participants receive a discount for participating in the program. Drivers of vehicles powered by internal combustion engines would pay only 85% of the amount that they would pay in fuel taxes. This approach has been successful in encouraging MBUF adoption in other states that have tried it, such as Virginia. While this may lead to a slight revenue decrease in the short term, it could speed up the adoption of MBUFs, providing a more reliable revenue source over the long term. 

Maryland is not starting from scratch on MBUFs. Other states across the country, including Oregon and Utah, already have permanent MBUF options. Further, Maryland has already conducted a pilot to determine how MBUFs would work.  The average driver would pay $23 a month to use roads with a MBUF, the same amount as they pay in fuel taxes. Perhaps more surprisingly, in Maryland’s pilot, rural drivers paid about 9% less with MBUFs than they paid with fuel taxes. This result echoes findings from other states, including Vermont and Virginia. The reason is that rural drivers are more likely to have older, less fuel-efficient vehicles. Under the current policy, rural, poorer drivers of Ford F-150’s are effectively subsidizing suburban and urban wealthier drivers of Toyota Prius’, an odd public policy choice.  

Unfortunately, there are several bills in the Legislature that would ban an MBUF system. While the authors of these bills raise understandable concerns about an MBUF program including the concern that an MBUF might be layered on top of fuel taxes, the reality that wealthy transit users do not contribute enough funding, or worries about privacy, each of those concerns can be mitigated. 

I strongly agree that wealthy transit users in suburban Baltimore and Washington D.C. should be paying more to ride transit. But dedicating portions of the Transportation Trust Fund that are supporting transit to highways instead will by itself not fix the fundamental underlying problems with the fuel tax. 

High-tech MBUF options use GPS signals, which are sent one-way from the satellite. However, given location is calculated using multiple satellites, GPS alone cannot be used to track the vehicle. However, for those uncomfortable with high-tech options, low-tech odometer readings are another option. Participants could use a camera app to monitor mileage data. Another option would be for mechanics, who already collect this data and report it to private entities such as insurance companies and to the Department of Motor Vehicles, to collect data for this program. The odometer readings would not provide any entity access to data for which it does not already have access. 

Thank you for the opportunity to testify on HB 1457. I’m happy to answer any question here in person or in writing. 

The post Maryland House Bill 1457 would replace the fuel tax with a mileage-based user fee appeared first on Reason Foundation.

While congestion pricing has been successful in managing traffic in other major cities, such as London and Stockholm, focusing on generating revenue to bail out the transit system instead of traffic management was always going to reduce the program’s effectiveness in New York City. As a result, supporters of congestion pricing as a useful policy tool shouldn’t be upset at the Trump administration’s efforts to kill the New York program. In fact, killing the New York City program, which has rightly been described a revenue grab for rail transit, could improve the prospects for a more effective congestion pricing system over the long-term. 

New York City’s traffic congestion is severe. Each New York City driver loses 108 hours per year. Approximately 700,000 of those drivers enter Manhattan each day from the suburbs. And it would be impossible to build enough new bridges to Manhattan and roadways in Manhattan to reduce congestion using a supply-side approach. Therefore, elected officials borrowed a page from cities across the world and decided to use a demand-side approach: cordon pricing. 

New York is using a form of congestion pricing, sometimes referred to as cordon pricing, which charges drivers a set fee for entering a designated area, typically during peak travel hours. The pricing’s primary purpose is to manage traffic volumes by spreading out or reducing trips during rush-hour periods, thus lowering greenhouse gas emissions. Secondary benefits of the congestion pricing plan were additional transit funding from these fees and faster bus travel times. To be effective, the toll must be set at a rate that optimizes traffic flow. 

Cordon pricing works in two ways. The fee, $9 between 5 am-9 pm weekdays and 9 am-9 pm weekdays, makes driving during peak hours more expensive and less attractive. As a result, some commuters switch to making trips during off-peak hours. Others switch to alternative modes, including transit, bicycling, walking, and working from home. Thus, the peak period demand and traffic congestion decrease. 

Congestion pricing has been implemented in several major cities. London has used cordon charging for around 20 years. In that span, Longon’s designated charging zone experienced a 30% reduction in congestion and a 38% increase in transit ridership. Stockholm uses a similar system. It saw a decrease in traffic congestion in the range of 30-50% since its implementation in 2006. 

However, the concept behind congestion pricing and implementing it effectively are two very different things. New York state has been trying to implement congestion pricing in Midtown and Lower Manhattan since the passage of the Traffic Mobility Act in 2019. (The program was formally known as the Central Business District Tolling Program.) The program’s initial start date was set to June 30, 2024, by New York Gov. Kathy Hochul. 

Complicating the congestion charge-setting process, the Metropolitan Transportation Authority (MTA), which oversees many of the city’s bridges and transit lines, demanded that the plan focus on financing $15 billion in needed transit system improvements. Therefore, the congestion charges were, at least in part, selected based on generating the revenue needed for major transit improvements rather than the charges needed to manage traffic congestion in the city. 

Four groups of drivers were particularly upset with the original plan: truckers, delivery drivers, New Jersey residents, and taxi/ride-hail drivers. 

Under the original plan, MTA required trucks to pay $24-$36 (depending on size) to enter the zone, while automobiles would pay $15. 

Delivery drivers claimed any added cost was unfair because it would make daytime deliveries more costly for them and their customers. 

New Jersey commuters were upset that they would have to pay the congestion charge to enter Manhattan after already having paid $15.38 in bridge or tunnel tolls if they used the George Washington or Verrazzano-Narrows Bridge or either the Lincoln or Holland Tunnel. 

Taxi and ride-hail drivers were upset that they would have to pass along the charge to customers via an additional ride fee of $0.75 and $1.50, respectively, for each ride within the city’s designated zone. 

These concerns and the political fallout that could come with them led Gov. Kathy Hochul to suspend the program, fearing a potential voter backlash against Democratic lawmakers up for re-election in November. Complicating matters further, then-presidential candidate Donald Trump announced that he would kill the congestion pricing program if elected. 

To help rebuild support for the congestion pricing program, elected officials and transportation analysts made changes. Truck tolls were reduced by 40%. Medium-duty trucks would pay $14.40, while heavy-duty trucks would pay $21.60. 

For delivery truck drivers, the New York City Department of Transportation announced an off-hour delivery incentive program to develop the infrastructure for businesses to accept deliveries past peak hours. With more night-time coordination between receivers and suppliers, drivers would pay only 25% of the charge. Other cities like Stockholm have found that nighttime deliveries reduced travel time by 25% to 30% and operation costs by 25%.

The cordon charge on passenger vehicles was reduced to $9, but the concerns of commuters using the Hudson River bridges and tunnels saying they’re being double-charged were not addressed. And, the ride-hailing charge was kept in the updated plan. The New York City tolling plan went live on Jan. 5. 

This current plan has three additional problems for the city. Most importantly, the proposed cordon charge is still not set at an efficient level to manage traffic congestion, which should be the primary goal. Early data shows that the congestion charge level has reduced traffic in Midtown Manhattan slightly, but not as much as advocates would hope. The New York Times reported, “In the first week of February, weekday traffic inside the toll zone dropped 9 percent compared with the same time last year, with an average of 561,678 vehicles entering the area, down from 617,000, according to the M.T.A.”

That level is insufficient to reduce peak-period congestion by the desired amounts. It also isn’t going to generate the amount of money the Metropolitan Transportation Authority wants. MTA has a significant hole in its budget and has to pause some transit expansion projects because of insufficient revenue. A 40% reduction in revenue from the original congestion pricing plan would imperil some of MTA’s planned projects. 

The cordon tax is also disproportionately burdening passenger vehicles more than for-hire vehicles. A study by the National Bureau of Economic Research found that, despite a comparable number of trips, personal vehicles would pay $1.057 billion in congestion pricing compared to $244 million for for-hire vehicles. 

And now President Trump is aiming to end the program. The New York Times:

President Trump intends to revoke federal approval of New York City’s congestion pricing program, fulfilling a campaign promise to reverse the policy that tolls drivers who enter Manhattan’s busiest streets to help finance repairs to mass transit.

In a letter to Gov. Kathy Hochul on Wednesday, the president’s transportation secretary outlined Mr. Trump’s objections to the program, the first of its kind in the nation, and said that federal officials would contact the state to “discuss the orderly cessation of toll operations.”

The letter, from Sean Duffy, the transportation secretary, cited the cost to working-class motorists, the use of revenue from the tolls for transit upgrades rather than roads and the reach of the program compared with the plan approved by federal legislation as reasons for the decision.

Mr. Duffy did not indicate a specific date by which the federal government intended to end the program.

Mr. Trump wrote in a post on his social media platform, Truth Social, that New York was “saved” as a result of this news.

“CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED,” he wrote. “LONG LIVE THE KING!”

Ms. Hochul defended the congestion pricing program on Wednesday and vowed to fight the president’s move.

“We are a nation of laws, not ruled by a king,” she said in a written statement. “We’ll see you in court.”

If courts side with Trump’s effort to kill it, New York City may ultimately be thankful that the tortured version of congestion pricing that creates many losers and won’t reduce congestion over the long term can be replaced. A better congestion pricing plan focused on the primary goal of managing traffic congestion and improving mobility for individuals and businesses in and around New York City rather than a plan primarily designed to generate money to reduce MTA’s debt would benefit all involved.

The post New York has chance to improve congestion pricing plan appeared first on Reason Foundation.

Voters had other ideas. Only 46% of Gwinnett voters supported the referendum, and 38% of Cobb voters supported it, leading both to fail. Why were experts wrong, what findings are transferrable to other regions, and what are the lessons for the future?

Elections do not happen in a vacuum, and other factors influence voters. Nationally, the biggest factor in 2024 appears to be inflation. With core inflation running at 3.1%, after running at 3.3%, 8.2%, and 9.3%, respectively, the previous three years, voters are paying more for many consumer goods. Grocery prices were particularly volatile, with four-year increases of up to 50% in some categories. With so much more money going to food, voters, particularly swing voters, were not interested in giving more money to the government.

Another factor is commuting trends. More than 30% of metro Atlanta workers in professional services, information, finance, and management continue to work from home. While these occupations were never the biggest transit users, they tended to support transit as a vital option when they needed it. Now that they work from home multiple days per week, these workers may view transit spending differently. 

A third factor is priorities. Most voters don’t prioritize spending on transportation the way they prioritize spending on other policy areas like education. In Georgia, education sales taxes pass at a 20% higher rate than transportation sales taxes. Many voters consider school funding more important than transportation funding, even when the results of that funding have been decidedly mixed. 

A fourth factor is the project list. While these two project lists included no rail projects and were less controversial than the previous two referendums, they still included many new fixed-route services. Given that bus transit ridership is not expected to recover more than 100% of its pre-COVID riders, even in a quickly growing metro area like Atlanta, there may have been too many bus routes and not enough microtransit (on-demand service that covers a zone instead of a fixed-route). 

Cobb County, in particular, had a large number of bus rapid transit (BRT) heavy projects. BRT heavy operates in a dedicated right of way. These projects require building a new dedicated lane or taking a travel lane away from cars, increasing traffic congestion. Most of the Cobb County BRT-heavy lines were planned to be operated in new right of way. In post-election surveys, many voters felt that these dedicated lanes were a poor use of resources. This may be why Cobb’s proposal had less support than Gwinnett’s, which did not propose BRT-heavy lines. 

A fifth major factor is the mood of the country. Republican Donald Trump won Georgia in his return to the White House. While Trump did not win Cobb or Gwinnett counties, the margins were closer than many experts predicted. Partisan affiliation is a strong indicator of voting for higher taxes; Democrats tend to support more taxes while Republicans strongly oppose them. 

What does this mean for future transit referendums?

First, given the failure of multiple referendums over the last few election cycles, the counties should likely hold off on transportation referendums. Other regions should also consider a pause. With the transit industry in a state of flux, waiting could yield more clarity on the best balance of routes in the future. 

If elected officials want to win transit referendums, they should schedule them during elections without other referendums. In elections with both an education and transportation referendum, the transportation referendum was 30% less likely to pass than if it were a standalone ballot measure. 

Finally, choose good project lists. While political mood and competing referendums are certainly factors, nothing can overcome asking voters to spend money on a bad project list. The best example was the 2012 Atlanta region’s Transportation Investment Act list, where the 10-county region was asked to approve a project list where more than 50% of the funding supported transit in a region where less than 5% of the population commutes to work using transit. In the election, only about a third of voters supported those projects. Neither of the current project lists had this flaw, but the percentage of funding that Cobb County planned to dedicate to BRT-heavy was not proportional to commute choices. 

Since voters are not interested in increasing their sales tax rate, county governments must fund transit through other means, probably general budget appropriations. There are some advantages to funding transit with general funding.

First, the largest source of general funding is property taxes, which tend to be less regressive than other options since they are assessed based on the value of the property.

Second, general funds are more stable since they rely on more recession-proof mechanisms than other options.

Third, general fund outlays can be increased or decreased based on need. Therefore, transit systems with increasing passengers can receive more funding, while those with fewer passengers can receive less. 

However, there are also drawbacks. Sales tax revenue can be dedicated to transit, which is much more challenging than general fund revenue. As a result, there is less ability to budget from year to year, and bonding is challenging due to the lack of a stable revenue source. Sales taxes can also raise significant revenue, typically more than general funds. 

The voters have spoken regarding transit expansion in Cobb and Gwinnett counties. Now, elected officials in Georgia need to heed the “no new sales tax” message voters sent as they build and operate their transit systems.

The post What does the failure of suburban Atlanta transportation referendums mean for transit? appeared first on Reason Foundation.

Chairman Fey, Ranking Minority Member Barkis, and Fellow Members:

My name is Baruch Feigenbaum. I am the Senior Managing Director for Transportation Policy at Reason Foundation, a non-profit think tank. For more than four decades, Reason’s transportation experts have been advising federal, state, and local policymakers on transportation funding and financing. 

Overview of Testimony

While the federal government continues to delay action on meaningful transportation funding reform, states are leading the way. Understandably, raising taxes is unpopular. And while the motor fuel tax has been a reliable funding mechanism for the past 100 years, due to the combination of an increased number of electric vehicles, an increased number of hybrid vehicles, and particularly the increased fuel efficiency of vehicles powered by internal combustion engines, the fuel tax will not be a reliable mechanism in the future. 

While states have studied multiple options ranging from statewide sales taxes to kilowatt-hour fees for electric charging, two national surface transportation commissions, the National Conference of State Legislatures, and the Washington State Transportation Commission have all recommended that states transition from a fuel tax to a road usage charge. Reason Foundation echoes that recommendation. 

A road-usage charge, similar to the current fuel tax, follows the users-pay/users-benefit principle. Using this principle to fund and finance transportation projects has at least five benefits:

• Fairness: Those who pay the user fees receive most of the benefits, and those who benefit are the ones who pay. This general principle is used with other utilities, such as electricity and water. 
• Proportionality: Those who use more highway services pay more, while those who use less pay less (and those who use none pay nothing). 
• Self-limiting: The imposition of a user tax whose proceeds may only be used for the specified purpose imposes a de facto limit on how high the tax can be: only enough to fund an agreed-upon need for investment. 
• Predictability: A user fee produces a revenue stream that can and should be independent of the vagaries of government budgets. 
• Investment signal: The users-pay mechanism provides a way to answer the question of how much infrastructure to build, assuming that the customers have some degree of say. With respect to toll roads, the value of the facility can be judged by how many choose to use it and what level of tolls they are willing to pay. 

Beyond the basic principles, there are several things to like about Washington State House Bill 1921, which authorizes a statewide permanent road usage charge to replace the motor fuel tax.

First, the bill acknowledges the benefits of a more direct funding system. In today’s political climate, it is a refreshing change for a legislative body to make laws based on principles that the majority of the population supports. 

Second, the bill is revenue-neutral. It does not seek to use the conversion to mileage-based user fees to increase funding. Popular support has been much lower for road charging bills that also act as tax increases. 

Third, the program is a permanent solution. Some states have had a series of endless pilot projects with no prospect of a permanent program. This bill proposes a permanent program, which all drivers would eventually join. 

Fourth, the program provides choices. Drivers could choose from a simple odometer reading collected annually or from location-based options that provide drivers additional benefits, such as vehicle health monitoring.

However, we recommend that two problematic parts of the bill be amended. First, the bill adds an additional 10% road usage assessment of all the funding collected to a new program to fund rail, bicycle, pedestrian, and public transportation. This bill component is a violation of the users-pay principle. More practically, it is unnecessary. The state of Washington already provides more than $5 billion in annual transit funding, among the highest per capita funding rates of any state in the country. Counties and cities also provide funding for transit. It is not necessary to force drivers to subsidize a transit system that is already well-funded. 

Further, it would be helpful if the 18^th Amendment provisions were strengthened. The 18^th Amendment prohibits fuel tax revenue from being used for non-highway purposes. In order for a road usage charge to be subject to the 18th Amendment, it would need to be approved by voters. I understand the practical challenges of holding a vote with no guarantee that voters will approve a road usage charge. But I also worry about legislative intent without legal support. Lawmakers can take the first step by passing Senate Joint Resolution 8202, which requires revenue collected from a road usage charge to be used for roadway purposes. 

Thank you for the opportunity to submit my comments today on transportation funding. 

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Introduced during the 1970s oil crisis to reduce highway congestion and fuel consumption, HOV lanes are limited to vehicles with two or more people. The purpose of HOV lanes is to offer a less-congested travel alternative to the general-purpose highway lanes by encouraging drivers to carpool. HOV lanes in the United States have various occupancy requirements, including two people (HOV-2) or three people (HOV-3). Vanpools (shared vehicles carrying five to 15 passengers) and transit buses can also use HOV lanes. 

During the oil crisis, carpool lanes were successful in managing traffic flow and promoting carpooling. However, once oil prices dropped, many commuters ditched carpooling. While 20.4% of Americans commuted together in the 1970s, by 2008, the percentage of carpoolers had declined to less than 10%. This decline in carpooling has led to empty HOV lanes in many areas.

Three other factors also distort carpool lane usage: the “Goldilocks phenomenon,” fampools, and solo vehicles. 

The “Goldilocks phenomenon” draws from the well-known children’s story: It refers to HOV lanes that are too “hot” (overused) or too “cold” (underused). In cities with too-hot HOV lanes, an excess number of drivers use the carpool lanes, causing traffic flow to slow and leading vanpools and buses to encounter the same congestion as the other lanes. This reduces the number of people per hour that the lane can carry. It also dissuades commuters from using bus services and reduces vanpool formation because those modes must deal with significant traffic congestion. 

In contrast, too-cold carpool lanes are underused while general-purpose lanes are full. These carpool lanes can tarnish public opinion of HOV lanes because drivers stuck in traffic perceive them as wasteful. In many drivers’ minds, empty carpool lanes should be converted to general purpose lanes open to all drivers. 

Additionally, many vehicles in HOV lanes are not the types of carpools—workers commuting together—that planners envisioned. Many in carpool lanes are fampools, vehicles with passengers from the same household traveling to the same area. Today, fampools make up around 41% of carpool vehicles. Because these fampoolers would travel together regardless of whether there was a carpool lane, they aren’t reducing the number of vehicles on the road. 

Since enforcing occupancy requirements in carpool lanes is challenging, many solo drivers use the lanes without penalty. While police can and do ticket solo drivers for entering HOV lanes, they have other priorities, and the volume of solo drivers willing to try to use them, limited technological capabilities, and lack of a proper observation area mean law enforcement is somewhat limited in enforcing carpool lane occupancy rules.

The Federal Highway Administration (FHWA) does have a stick for poorly performing HOV lanes: the maintenance of minimum average speeds. When average travel speeds drop below 45 miles per hour, it can require states to either increase occupancy requirements, convert the HOV lane to an HOT lane (which may include increasing occupancy requirements), or pay back the federal funding used to build the HOV lane (usually 90% of the overall cost).

States should start converting their HOV lanes to HOT lanes. With high-occupancy toll lanes, solo drivers pay to use the lanes, but carpools, vanpools, and buses do not. Given the large number of two-person fampools and limited capacity in HOT lanes, many transportation agencies will convert a 2+ HOV lane (two or more people traveling together can use the carpool lane) to a 3+ HOT lane (three or more people traveling together can use the toll lane for free).

It is easier to enforce carpooling with a 3+ person per vehicle requirement. In addition, HOT lane operators often use electronic (occupancy detection) enforcement.  

Unlike some toll roads, which use a flat rate per mile, most of today’s high-occupancy toll lanes use dynamic pricing. The level of traffic and demand for the HOT lane dictates the price of the tolls, which rise during heavy travel periods like rush hour. The tolls are priced to ensure the HOT lanes remain free-flowing even during peak hours.

High-occupancy toll lanes are a better option than carpool lanes for most urban areas today. Minimizing traffic congestion in HOT lanes keeps those lanes an attractive option for drivers who need quicker trips, which can also help reduce congestion in adjacent general purpose lanes. HOT lanes also help address the HOV lane enforcement problem. And the toll revenue from solo drivers paying to use the HOT lanes can be reinvested into other highway projects in the corridor, such as highway maintenance, public transit improvements using the lanes, electronic tolling collection and enforcement, or recouping the costs of the HOV-to-HOT lane conversion. 

Today’s transportation agencies should not accept the subpar conditions and results being achieved by HOV lanes. Drivers, transit users, and states would benefit from converting failing carpool lanes into high-occupancy toll lanes.

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Georgia Referendum A would increase the personal property tax exemption from $7,500 to $20,000, meaning that people would not have to pay county personal property taxes on property valued up to that amount. In Georgia, the most common types of personal property are business inventory, farm machinery, and motor vehicles. Motor vehicles, trailers, or mobile homes would not receive the exemption.  

Fiscal Impact 

Since the state does not collect personal property taxes, there is no impact on state revenue.  

However, county and city revenue would be affected. Reason Foundation estimates, based on the 123 counties that could increase the exemption for personal property taxes, that the revenue loss could be as high as $250 million annually. However, some counties may choose to hike the millage rate as well, offsetting some of the revenue loss.  

Proponents’ Arguments 

One argument is the amendment would provide a needed tax break to small businesses in Georgia. State Rep. Mike Cheokas (R-Americus) sponsored the constitutional amendment “to help reduce the burden of high taxes and prohibitive regulations that adversely affect businesses in Georgia.” The Georgia Chamber argues that the bill will contribute to the continued success of the state’s pro-business environment by lowering taxes for businesses and will encourage more businesses to relocate to Georgia, providing additional jobs and more net revenue in the long term.  

Opponents’ Arguments 

The Associated County Commissioners of Georgia and the Georgia Municipal Association opposed the bill creating this amendment on their websites, but neither provided any public rationale. The Atlanta Journal-Constitution argued that the amendment, if passed, could reduce funding for education and other purposes. Forty-two House Democrats voted against the original $50,000 exemption, and 13 were either excused or did not vote. However, none publicly expressed their rationale. The bill passed unanimously in the Senate.  

Discussion 

This measure would provide important tax relief to property owners. It counters the increasing tax burden on property due to rising property values and inflation. Further, it provides needed tax relief to lower-income residents.  

The legislation comes at a time of high inflation and government expenditures. Georgia’s personal property exemption level is not indexed to inflation. The House bill increased the exemption to $50,000, but to secure enough votes for passage in the Senate, it was lowered to $20,000.  

Georgia’s property taxes are administered at the county level and used for general budget expenditures such as education and public safety. While more populous and growing counties have the resources to overcome the revenue loss from this tax cut, many rural counties declining in population might not.  

This amendment would create some distortions because it treats similar types of property differently. For example, some types of transportation vehicles such as motor vehicles, trailers, and motor homes are not granted the exception whereas airplanes and boats receive the exemption.  

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Georgia Amendment 2 would transition the role of the Georgia Tax Tribunal, which is housed in the executive branch, to the Georgia Tax Court, which would be housed in the judicial branch. The Georgia Tax Court would have statewide jurisdiction. If approved, judges would be appointed by the governor, with approval from the House Committee on Judiciary and Senate Judiciary Committee, and serve four-year terms. 

Fiscal Impact 

Since the amendment moves jurisdiction and funding from the executive branch to the judicial branch, it is not forecast to affect revenue or costs.  

Proponents’ Arguments 

Several arguments favor this amendment. First, the Tax Court would provide more sunshine and uniformity to its decisions. Second, as noted by the firm Evans Sutherland, the Tax Court would have broader jurisdiction over constitutional claims and Department of Revenue actions, answering appeals that would otherwise go to the Supreme Court and allowing the Supreme Court to focus on more serious crimes.  

Opponents’ Arguments 

There were no arguments against the bill. Only one legislator, a Republican, voted against the bill, and he did not disclose his reasoning. There was no public opposition to the amendment.  

Discussion 

Tax tribunals and tax courts are widespread across the United States. Twenty-nine states have tax tribunals housed in the executive branch, and six states have tax courts housed in the judicial branch.  

Tax tribunals are more widespread, but tax courts are in states across the political spectrum from Hawaii to Indiana. Georgia’s current Tax Tribunal is designed to hear appeals of an official assessment, denials of a tax refund claim, challenges to state tax execution, declarative judgments, and denials of petition. The new tax court would continue to hear each of these claims in addition to constitutional claims and Department of Revenue actions.  

First, a new tax court seems a better fit for the judicial branch. Under the current system, the courts are accountable to the same branch of government that creates the rules they adjudicate, which seems like a clear conflict of interest.  

Second, if a case in a tax court needs to go to trial, it now has a dedicated pathway. Before, it would have to wait behind cases involving conventional crimes, sometimes for years.  

Third, judicial branch entities are required to release their rulings publicly, while executive branch agencies are not. So, this amendment would provide more public information on complicated cases and more guidance for defendants and lawyers.  

However, picking judges would be up to elected politicians, which could politicize the process. For example, executive branch employees currently oversee tax cases. While bureaucrats may not be known for their speed, they tend to be less political than politically appointed individuals.  

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