Transportation Utility Fees

By Ewing, Reid | Government Finance Review, June 1994 | Go to article overview

Transportation Utility Fees


Ewing, Reid, Government Finance Review


A study of 10 local governments' experiences with TUF ordinances spotlights those features that courts have upheld as representative of a fee rather than a tax.

Historically, cities and counties paid for roads with taxes and special assessments. Since the mid-1980s, localities in certain states also have imposed transportation impact fees. Even while tapping all these sources, many localities find their road needs outpacing their revenues. Property tax hikes are death politically, and transportation impact fees can be used only to meet the needs of new development. Local governments must come up with the funds to operate and maintain the new roads built with impact fees and to eliminate congested conditions on existing roads. These are precisely the uses of funds for which transportation utility fees (TUFs) are intended.

In jurisdictions with TUFs, roads are treated as a public utility, and developed properties are charged a fee for service in much the same way they are charged for water, sewer, trash collection and, increasingly, stormwater utility services. Like other utility fees, TUFs are imposed on a jurisdiction-wide basis and continue in perpetuity, financing ongoing operations.

In June 1992, Port Orange, Florida, became the 10th U.S. city (and the first east of the Mississippi River) to adopt a TUF. Initially, TUF funds will replace a 0.287-mill subsidy from the city's general fund and eliminate a shortfall in the city's road maintenance budget. Eventually, funds will be used to pave dirt roads, construct bike paths, and reconstruct and widen deficient city streets.

This article discusses legal and practical issues faced by Port Orange and others adopting TUFs. Findings and conclusions are based, in part, on a survey of localities with TUF ordinances. A nationwide search in late 1991 uncovered nine such places outside Florida. Exhibit 1 delineates the key characteristics of those TUF ordinances.

Main Advantage of a TUF

Use of a TUF to fund road maintenance has one compelling advantage over the common alternative of reliance on property tax receipts from the general fund. With a property tax, a significant percentage of traffic generators pay nothing due to their tax-exempt status. In contrast, with a TUF, every local traffic generator pays to support the local road system. Some inequity creeps into a transportation utility fee schedule because road use usually is estimated rather than measured and because estimates are based on averages for entire classes of property. Still, this shortcoming may be less problematic than the exemption of entire classes of developed property from any financial contribution to road maintenance. In Port Orange, the amount of tax-exempt property getting a free ride was a sore point with local officials.

Tax or User Fee?

In Florida as in most states, localities may levy taxes only if specifically authorized by state law, whereas they have blanket authority to charge user fees. The object in structuring a TUF, therefore, is to make it as much like a user fee and as little like a tax as possible. A TUF imposed by Fort Collins, Colorado, was upheld by the supreme court of that state when it was determined to be a valid fee. The Supreme Court of Idaho struck down Pocatello's TUF when it was held to be a disguised tax.

Among the forces shaping the design of TUFs are the Supreme Court of Colorado; the Supreme Court of Idaho; the Attorney General of Oregon, who opined that Ashland's TUF is a property tax; and the courts and legislatures of other states, which have drawn the line between user fees, taxes and special assessments through their case law and statutes.

To qualify as user fees, government charges must be reasonably related to the use of public facilities or services. For TUFs, the most reasonable basis for fee setting is the "cost occasioned" by a class of road users, that is cost incurred by government in meeting the needs of that class. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Transportation Utility Fees
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.