Building on the funding principles outlined in Chapter 1, the Commission established a comprehensive set of criteria to support consistent and objective consideration of alternative revenue mechanisms. In coming to its conclusions, the Commission applied these evaluation criteria to a large set of options derived from numerous sources, as described in later sections of this chapter. Although the Commission focused on evaluating options at the federal level, most of the evaluation criteria generally are applicable at the state and local level as well, so the evaluation approach followed here also will be of value as a model for state and local policy makers who wish to use the framework to conduct their own evaluation with scoring and weightings that are specific to their own situations.
Following is a brief overview of the evaluation criteria considered by the Commission in carrying out its assessment of individual revenue mechanisms. Application of these criteria in turn informed the Commission's recommendations. These criteria are not rank-ordered Put rather are presented in logical subcategories as follow:
• Funding Stream Considerations, including the overall revenue-raising potential, sustainability, and flexibility of the funding approach
• Implementation and Administration Considerations, including the political and legal viability of a particular approach as well as the ease and relative cost of initial implementation, ongoing administration, and enforcement
• Economic Efficiency and Impact Considerations, such as the ability of the mechanism to promote efficient use of the system and internalize any adverse side effects
• Equity Considerations, including application of the user/beneficiary pays principle and consideration of equity across income groups and geography
• Applicability to Other Levels of Government, focusing on the potential applicability of various funding approaches beyond the federal level to state and local government
Inevitably, some criteria conflict with one another, such that the ultimate assessment of any mechanism requires some amount of balancing and weighting across the criteria. The Commission factored this into its analytical approach, as discussed further in this and subsequent chapters. Further, the Commission recognizes that Congress as well as state and local policy makers will want to go through their own evaluation processes, applying their own balancing across criteria and relative weighting among them. The Commission offers this chapter as a template for such exercises.