Future of Tolling at Stake in Highway Reauthorization

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As Virginia tries to tackle its growing traffic congestion problems, some are looking to Congress to bring more money to the table.  Bob Poole’s article below outlines what is likely to happen in Congress and how toll roads will become a larger part of our future road trips.
Even if Congress somehow comes up with enough money (from somewhere) to avoid reductions in federal highway funding, it’s quite clear from a decade of research that business-as-usual funding will scarcely make a dent in the overwhelming problem facing the U.S. highway system in coming decades: reconstructing and modernizing the Interstate highway system. This vitally important system will be reaching the end of its 50-year design life during this period. The Interstates were also laid out based on the United States of the 1940s and ‘50s, not the country it has become in 2011. The safety and design standards of the 1950s are a far cry from what we practice today. And many urban and inter-city Interstate corridors are woefully short of capacity. Estimates for reconstructing and modernizing this vital backbone of intercity travel and goods-movement range from $1.5 to $3 trillion.
The fairest and most practical way to pay for a 21st-century Interstate system is to finance it based on 21st-century all-electronic tolling. Only those who benefit from the replaced facilities would pay for them, under this approach, contrary to what would happen via an enormous increase in fuel taxes (which everyone would be forced to pay, and which would get carved up into enough categories to satisfy every money-hungry constituency). Under the principle of value-added tolling that I wrote about last month, tolling would be applied only when a corridor was reconstructed; there would be no “putting up toll booths on the [unimproved] Interstate,” as critics rightly fear. And toll revenues would be used solely to rebuild, operate, maintain, and improve each specific tolled corridor.
I’m happy to report two recent developments that are fully in accord with these ideas. The first was the unveiling, on Nov. 2nd, of the U.S. Tolling Coalition, spearheaded by state-level highway construction associations in (thus far) 15 states, along with several chapters of the International Union of Operating Engineers. Thus far, only two state DOTs (Alabama and Florida) and one toll agency (North Texas Tollway Authority) are listed as supporters on the coalition’s website (http://ustollingcoalition.com). But given the growing number of states applying for slots in the federal pilot program that allows only three states to reconstruct an aging Interstate with tolls, I expect more to step up to the plate in coming weeks and months. (Missouri and Virginia already have slots in the program; Arizona and North Carolina have applied, and Connecticut and Rhode Island are likely to do so.)
The other key development was an announcement in late October of an agreement between the organization representing state DOTs (the American Association of State Highway and Transportation Officials) and the organization representing toll roads (International Bridge, Tunnel & Turnpike Association) to enable the two groups “to work together in support of road funding and financing tools that help states build and maintain infrastructure.” While acknowledging that not all state DOTs support tolling, AASHTO executive director John Horsley said that in signing the statement, “AASHTO expresses our common belief that all states should have the flexibility to use tolls to fund and support their highways.”
Congress holds the key to whether states will gain this flexibility during the current reauthorization of the federal highway program. Except for those portions of the Interstate system that were originally developed with tolls, federal law prohibits the use of tolling on the Interstates, except to replace an existing bridge or tunnel, or as allowed under various pilot programs enacted during the last three reauthorizations. The recently released Senate Environment & Public Works (EPW) Committee bill would leave those pilot programs intact, except for the Express Lanes Demonstration Program, which was authorized only for the duration of SAFETEA-LU (which has been extended several times since its nominal end Sept. 30, 2009). The actual language of a House bill has not yet been released, but toll supporters are worried by repeated statements this year by Transportation & Infrastructure Committee chairman John Mica (R, FL) that he supports tolling only for “new capacity” but not for “existing” capacity. Taken literally, that position would wipe out the Value Pricing Pilot Program and the Interstate System Reconstruction and Rehabilitation Toll Pilot Program, which would turn back the clock on Interstate tolling to the pre-ISTEA (1991) days.
At the ARTBA Public Private Partnerships conference in Washington, DC on Nov. 15th, House Transportation & Infrastructure Committee staffer Jim Kolb said that it was hard for House members to support an expansion of the Reconstruction pilot program when only two of the three slots have been taken after 13 years and no reconstruction project has actually begun. And Senate EPW staffer James O’Keefe added that, in his view, the politics are not there so far for expanded tolling provisions; hence, “You guys need to make a stronger case” if you expect action.
In response, I suggest the following. Both the 1998 TEA-21 law and the 2005 SAFETEA-LU significantly increased federal highway money for the states, meaning the status quo was easy to live with. It’s amazing that any state, flush with federal money in those years, would have seriously considered the politically more risky alternative of using toll financing where it had never before been used. But the best any state can hope for from a 2012 reauthorization is about the same funding as in recent years—at a time when the needs are greater than ever before. The fact that as many as half a dozen states are likely to be contending for the one remaining slot in the Interstate Reconstruction Toll  pilot program is evidence of how drastically the situation has changed since 1998. Moreover, simply expanding the number of slots in that program—or better still, removing any numerical limit—is not a mandate forcing any state to do anything. It simply gives states the option, under carefully worked out conditions that conform to the value-added tolling principle. So the case is there. The key question is: will a critical mass of state DOTs join the U.S. Tolling Coalition to make their case to Congress?
Bob Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the previous four presidential administrations on transportation and policy issues.
 

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