A study of rural highway maintenance expenditures in Virginia: forecasting and policy testing

Abstract

The purpose of this study is to determine the financial adequacy for highway maintenance in Virginia during the period from the year 1981 to 1990. Future highway maintenance expenses were projected using regression analysis and hypothesized to be a function of travel. The forecasts of maintenance expenditures were performed for each district in the state and for the three major highway systems-- interstate, primary and secondary-- which are responsible by the Virginia Department of Highways and Transportation.

Maintenance expenditure projections were also made for three economic scenarios--high, moderate and low inflation rates. The results showed that with high inflation, there will be a shortfall of maintenance funds under the present taxation policies. To avoid the future shortfall, an increase in an additional fuels tax of three percent of the price of gasoline was assumed and also a deferment of maintenance activities was considered. The results of both cases show a need for a further increase in highway taxes in order to cope with the increasing highway costs in the next decade.