With increasing concerns about the present level of highway funding, this study was initiated to investigate historical trends and to develop predictive methodologies for considering alternatives available for increasing highway revenues. Emphasis was placed on historical trends, and a data base of highway-related and socio-economic variables were prepared to document the relationship between these variables and highway-user revenues. A historical file of 37 variables was prepared for the period 1964 through 1984.

As a means of investigating future alternatives that will affect highway-user revenues, a series of nine equations or models were developed that represented historical data. Input data necessary for the models were personal income in 1972 constant dollars, the price of motor fuel, motor fuel taxation rates, and motor vehicle fuel economy.

These models provided logical and reasonable relationships, and the statistical data generally indicated high levels of correlation as represented by R-squares. An effort was made to develop models that were policy-sensitive such that future scenarios could be investigated. Using the series of nine models, forecasts of highway-user revenues were made for the years 1990 through 2005. This was an attempt to demonstrate use of the models for investigating the influence of policy-sensitive variables on revenues. Scenarios investigated were the following: 1) variations in fuel price and fuel tax, 2) increasing fuel economy, 3) variations in usage tax rate, and 4) registration fees increases. Examples showing the impact of future alternatives indicated several possible sources of increased highway-user revenues.

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The contents of this report reflect the views of the authors who are responsible for the facts and accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the University of Kentucky, the Kentucky Transportation Cabinet, nor the Federal Highway Administration. This report does not constitute a standard, specification, or regulation. The inclusion of manufacturer names and tradenames are for identification purposes and are not to be considered as endorsements.