Road Funds, User Charges and Taxes

When orderly planning and execution of road maintenance is undermined, through insufficient or uncertain budgetary allocations, road networks can deteriorate to the point that production and distribution costs of other economic activities are significantly increased. Road Funds are a continuing subject of controversy. They are regarded as a boon by highway specialists who see them as facilitating the provision and maintenance of a highly productive asset by means entirely consistent with the general shift away from direct government production of goods and services. Macroeconomists and public finance specialists have tended to regard them as a bane because they reduce fiscal flexibility; do not adequately address problems associated with the provision of public goods or the internalization of externalities; and are often not well managed.