Value Capture for Transportation Finance

Zhirong Zhao, Michael Iacono and David Levinson

No 64, Working Papers from University of Minnesota: Nexus Research Group

Abstract: As vehicles become more fuel-efficient and overall levels of travel stagnate in response to increases in fuel prices, conventional sources of revenue for transportation finance such as taxes on motor fuels have been put under increasing pressure. One potential replacement as a source of revenue is a set of policies collectively referred to as value capture policies. In contrast to fuel taxes and other instruments that impose charges on users of transportation networks, value capture policies seek to generate revenue by extracting a portion of the gains in the value of land that result from improvements to transportation networks. In this paper we identify a set of eight policies that contain elements of the value capture approach. These policies include land value taxes, tax increment financing, special assessments, transportation utility fees, development impact fees, negotiated exactions, joint development, and air rights. We evaluate each of the policies according to four criteria: efficiency, equity, sustainability (in terms of revenue adequacy and stability), and feasibility. The value capture concept is placed within a more general framework of transportation finance that emphasizes the relationship between different types of charges and groups of beneficiaries from transportation investments.

Keywords: Transportation Ð Economics; Land value; Transportation Ð finance and taxation (search for similar items in EconPapers)
JEL-codes: H23 H27 H71 R14 R21 R33 R48 R51 R52 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Published in Procedia - Social and Behavioral Sciences 48 (2012) 435 Ð 448.

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Persistent link: https://EconPapers.repec.org/RePEc:nex:wpaper:valuecapture

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