Value Capture: Transportation Utility Fees
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Value Capture: Transportation Utility Fees

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      Transportation utility fees are financing mechanisms that treat the transportation system like a utility. Residents and businesses are charged fees based on their use of the transportation system rather than charged taxes based on the value of the property that they occupy. Transportation utility fees are not subject to voter approval and are based on the number of trips generated by different land uses. Utility fee rates may be based on number of parking spaces, square footage, or gross floor area. This approach links the costs of maintaining transportation infrastructure with the benefits derived from mobility and access to a transportation system. The first transportation utility fees in the United States were implemented in Oregon in the 1980s, and they have been used successfully in cities with small populations in Washington, Idaho, Utah, Colorado, Texas, Missouri, and Florida. The fees are used primarily by local governments to fund roadway maintenance. They are also known as street maintenance fees, road use fees, street utility fees, and pavement maintenance utility fees. Transportation utility fees differ from other types of impact fees in that they are levied on all property occupants—owners and renters alike—rather than on property owners alone. They are also paid on an ongoing monthly basis like a utility bill and not in annual or quarterly installments the way real estate taxes are collected. Given that use of the transportation system is not metered in the same way as home electricity or sewer utilization, the fee is calculated on estimated trip generation for different on-land uses. Sixteen out of 25 transportation utility fee programs specify the use of trip generation rates prepared by the Institute of Transportation Engineers.
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