CBO Offers Suggestions on Highway Spending

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There is ample opportunity to make federal spending on highways more productive, according to a new Congressional Budget Office (CBO) report.

Funding formulas that the federal government uses to apportion spending to each state do not correspond well to how roads are used or valued by drivers. CBO suggests three approaches to maximize the value of highway spending:

Implement “congestion pricing” — charging drivers a road use fee that increases during periods of peak demand — or a vehicle miles traveled (VMT) tax. Either of these systems could provide information to help identify high-value repairs and expansions of roads.

Give a greater portion of federal funding to projects with high economic benefits.

Link spending more closely to measures such as standards for pavement quality and traffic congestion.

Lawmakers should consider the report’s recommendations when they decide how to finance highway spending over the long term. The Highway Trust Fund, the accounting mechanism through which highway funds are disbursed, is projected to become insolvent in 2021.

A balanced solution would include higher revenue and greater spending discipline, which could be enhanced through the implementation of some of CBO’s suggestions.

External links:
Making Federal Highway Spending More Productive (CBO)
Fixing The Highway Trust Fund (Concord)

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