To complete its comprehensive assessment of potential surface transportation revenue options, the Commission considered several that were deemed more appropriate for addressing targeted needs, unviable at the national level but potential state/local options, or simply infeasible for a variety of reasons (but did not fit into the major option categories discussed above). For the most part, these include mechanisms that are either currently used at the state and/or local level or have been suggested by other groups with an interest in increased transportation funding. The following is a brief discussion of the remaining options.
• Passenger Facility Charges-The federal Passenger Facility Charge (PFC) Pro- gram allows the collection of PFC fees of up to $4.50 for every enplaned passenger at commercial airports controlled by public agencies. Airports use these fees to fund Federal Aviation Administration-approved projects that enhance safety, security, or capacity, that reduce noise, or that increase air carrier competition. Revenues from these charges can be used for highway and transit capital expenses, although these investments must meet fairly rigorous tests with respect to their role in exclusively providing access to aviation facilities. Increasing the cap on PFCs could thus provide local governments with a means to raise money for highway and transit access to airports. The rules and practices regarding which activities are eligible for PFC funding also could be broadened to include surface transportation that is not exclusively used for airport access.
• Development and Impact Fees-The Commission broadly supports strategies that impose targeted sales taxes, property taxes, developer assessments, and so forth on individuals and businesses that directly benefit from specific transportation investments. These strategies, however, are most appropriate at the local level and have a limited if any role as national funding mechanisms.
• Proceeds of Asset Sales, Leases, and Concessions-As with development and impact fees, the Commission supports state and local government efforts to monetize assets as long as the proceeds are used for transportation, but it views these activities as mechanisms for raising state and local revenues rather than as a means for providing a stable source of long- term federal funding.
• Federal Tax on Local Transit Fares-The Commission notes that transit fares are already direct user charges, and they already fund a significant portion of operating expenses and some capital expenses for those systems. The Commission believes that transit fares should continue to be set locally, based on market conditions in each local transit market. Local transit systems generally try to set transit fares so as to maximize revenues, taking into account the need to keep fares affordable for low-income users. A federal tax would interfere with appropriately balancing these objectives. The Com- mission also dismissed this option for practical reasons: transit agencies already face stiff opposition to raising fares sufficiently to cover operating costs. Federal policy might appropriately include incentives for local governments to set fares efficiently. And, as a related matter, federal policy might reduce the current parking subsidies that exist in the tax code (employers can provide parking to their employees as a pre-tax benefit), at least to the point where they are equal to subsidies for transit, while also expanding subsidies to other commuting modes, such as telecommuting, walking, or biking, by providing a fixed amount of income in pre-tax form.
• Federal Tax on Parking Fees-As with a federal tax on transit fares, this revenue mechanism is a good example of charging users directly. Again, the disadvantage of a federal tax on local parking fees is that it would in effect require an across-the-board fee increase for all parking systems to maintain the same revenue level. The Commission believes that parking fees should be set locally, based on market conditions in each local parking market. Parking fees should be set so as to make efficient use of available parking capacity and to minimize congestion caused by motorists cruising for parking spaces. A federal tax would interfere with appropriately balancing these objectives. The Commission also dismissed this option for practical reasons: the variation in ownership of parking facilities and parking rates from state to state makes it impossible to implement an equitable national surcharge. Federal policy might appropriately include incentives for local governments to set parking fees efficiently.
• Tourism Taxes-These include sales taxes, surcharges, and fees for rental cars, hotels, and other tourism-related activities. While there is a reasonably strong relationship between these sources and transportation infrastructure (particularly with respect to rental car usage), these sources are widely used as a state and local revenue source. As such, the Commission determined that the imposition of federal taxes, fees, or surcharges on these activities would simply cut into the revenue capacity of state and local governments.
• Tobacco, Alcohol, and Gambling Taxes-These taxes (frequently referred to as "sin taxes") are often considered at the state and local levels since they can raise significant revenues and tax products/activities that can lead to undesirable outcomes. Although taxing tobacco and alcohol at the federal level would be much more viable than taxes on gambling, these options have little if anything to do with transportation and were deemed inappropriate as sources of long-term surface transportation funding at the federal level.