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Tuesday, September 17, 2013

How to Toll Every Interstate Highway in America


By Ryan Holeywell, September 12, 2013

Motorists pay tolls to pass through an Interstate 90 tributary in New York. Most of the few roadways that allow tolling on the interstate are on the East Coast.

When it comes to infrastructure in America, two things are clear to most observers: the need for improvements are vast, and Washington isn't too keen on figuring out how to pay for it.

That's caused various organizations and interests to continue exploring potential ways Congress could pay for roads. Some advocate for higher gases taxes. Some pitch per-mile driving fees. And still others are hoping Congress will allow more tolling.

To that end, the Reason Foundation this week published an ambitious study to explain how, exactly, tolling the interstate might work.

Historically, tolling the interstate has been prohibited, except for a few roadways -- mainly on the East Coast -- that were grandfathered in when the interstate system was created. Over time, that situation has changed slightly. In the 1990s, states started to get greater flexibility to toll the interstate when they built new lanes. And since 1998, a pilot program allows states pursuing major rehabilitation to interstates to toll them too (the three states in that pilot, Virginia, Missouri and North Carolina, haven't actually done interstate tolling yet).

But the Reason Foundation -- along with several other stakeholders -- is asking Congress to make a major departure and instead let states toll all the interstates, so long as they use the money to rebuild or expand the roads.

Such a move would be dramatically different from the status quo and no doubt controversial. But Congress hasn't raised the gas tax in 20 years, and it hasn't taken any steps to indicate its serious about addressing the funding shortfall facing the country's roadways. "There's no serious alternative on the table anywhere that has a chance," says Robert Poole, Reason's director of transportation policy.

Poole and others argue that the timing is right for wide-spread interstate tolling for a few reasons. While the interstate represents just 2.5 percent of all lane-miles of roadway in the country, it represents 25 percent of the miles driven by motorists. Meanwhile, most of the interstate was designed for a 50-year life span, which is quickly approaching.

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The technology exists to make widespread tolling possible without the huge cost of actually manning toll booths. Traffic has grown since the early days of the interstate, when tolling was initially banned due to concerns about insufficient volume to make it economically feasible. And the growth of the population in the south and west means tolling could work in places where it previously wouldn't have made much sense.

But those are old arguments. So Poole took the case a step further, and tried to model how, exactly, a nationally tolled interstate system would work in hopes of giving him and other advocates more ammunition.

First, he tried to estimate on a state-by-state basis how much it would cost to reconstruct the country's interstates and widen the ones in need of more capacity. The work was based largely on traffic projections using a U.S. Department of Transportation model. Moreover, construction cost estimates were calculated for each state too, based not only on the amount of work needed but how expensive construction is in each state.

Then, he came up with some standardized toll rates. Under Poole's model, interstates could be tolled at 3.5 cents per mile for cars and 14 cents per mile for trucks, adjusted for inflation annually. Those tolls would be feasible in about 30 states, would need to be a bit higher in 15, and would seemingly be prohibitively expensive -- and thus in need of supplemental funding -- in about six mostly rural states.

In short, Poole concluded, the whole undertaking would cost about $1 trillion, and the tolls could pay for it, under a plan to rebuild the interstate over a decade and pay for it via tolling for 35 years after that. "It appears feasible to finance the reconstruction and selective widening of nearly the entire Interstate system via moderate toll rates collected via (all-electronic tolling)," he writes.
That's important, because advocates have long called for lifting the interstate tolling ban, but Poole's study shows how, exactly, it would work.

Still, the plan could be a tough sell, which Poole fully acknowledges. The trucking industry generally opposes tolling, and so to do some auto clubs. Moreover, a massive system of interstate tolling would likely be a huge opportunity for so-called "public-private partnerships," in which the private sector would take a larger role in operating the country's infrastructure. Those deals have been controversial in many states, and undoubtedly, they could be controversial on something like the interstate as well.

But Poole envisions a scenario in which users of the tolled interstates could be reimbursed the gas tax they pay on those routes, to eliminate criticism of "double taxation." Moreover, he argues that tolls are actually more politically palatable to drivers than across-the-board gas tax hikes, since they're seen as more equitable. The people who use the interstate the most would pay the most, and the tolls would reflect the actual cost of the roadway improvements.

The idea of easing interstate tolling restrictions gained some traction last year, when Congress debated the MAP-21 highway bill. Three moderate senators -- Democrats Tom Carper of Delaware and Mark Warner of Virginia, and Republican Mark Kirk of Illinois -- introduced an amendment that would have lifted the cap on interstate tolling pilots, but they ultimately withdrew it. Tolling advocates want to see that amendment again.

But that raises the question of why other states could be expected to toll, when the the three states already in the pilot aren't doing it? Poole says he doesn't expect every state would take advantage of the policy, at least initially, but if Congress lifted the tolling ban, one state would eventually figure out a politically palatable way to do it and could become a "pathfinder" other states would follow.

Patrick Jones, who leads the trade association representing toll owners and operators, says the issue is about giving states the flexibility to toll the interstate, not a mandate. "Right now," he says, "we can't even have that debate in the states."