Back to the Future on Toll Roads

Russell Sadler

Toll roads, we are told, are a great new 21st Century idea guaranteeing a future free of gridlock.

A vigorous effort is underway in Virginia and Maryland to create privately financed toll roads that would allow those who pay to commute at 60 miles an hour from the suburbs to the nation’s Capital without a single traffic jam. The cost? About $30, billed to your credit card. Existing roads would remain free -- and congested.

"We're creating choices that are not otherwise possible," Maryland Transportation Secretary Robert L. Flanagan told the Washington Post. "By using variable tolling you can use a market mechanism to keep those lanes relatively congestion free."

Translation? “We deliberately price some motorists off the highways so those who do pay experience less congestion.” It is not coincidental that this anti-egalitarian “experiment” is being conducted in the bubble that surrounds Washington, D.C.

Toll roads are not new. They are a pre-industrial idea that failed during the rapid growth of the Industrial Age when the local, state and federal governments took over the responsibility for providing a comprehensive, integrated transportation system. The revival of toll roads is not going over well in other parts of the country.

The State of Indiana -- it calls itself the Crossroads of America -- just agreed to lease the existing, publicly owned Indiana Toll Road to an Australian/Spanish consortium for the next 75 years for $3.8 billion. This is a radical departure from past practice, even in a country that still operates toll bridges and even some expensive-to-maintain publicly owned toll roads in the East and Middle Atlantic states.

Leasing the Indiana Toll Road to foreign owners is the brainchild of Gov. Mitchell Daniels, not incidentally the Bush administration’s first budget director, where he apparently got this idea. Daniels says he is “astonished” by the passionate opposition the lease unleashed. Daniels promises the $3.8 billion in lease loot will go to reduce the backlog of new highway projects and will create jobs and bring new industry to invigorate Indiana’s sagging economy.

Daniels’ critics insist the public got a bad deal. Motorists will still pay tolls on the toll road and gas taxes to maintain the newly constructed roads. Driving in Indiana will become more expensive, not less. Daniels’ approval rating has nose-dived from around 50 percent last winter to 37 percent in recent polls.

Oregon is also flirting with privately financed highway projects including a bypass of Newberg and Dundee in the Yamhill County wine country paid for by tolls. A company that builds the toll road might also be paid by granting development rights along the right-of-way, much like the Transcontinental Railroad was financed with land grants in the mid-1800s.

Private financing of a transportation project by granting development rights has already been done once in Oregon, but it did not involve a highway. The Bechtel Corp. built an extension of a light rail line to the Portland Airport in exchange for development rights on 120 acres along the right-of-way. But the motive behind this scheme was not really gaining private financing. The motive was avoiding a public vote on the debt necessary to finance the light rail extension if it was built by the government.

And that is the dirty little secret behind the latest fascination with toll roads -- it avoids public votes on potentially controversial highway projects. Most states, including Oregon, have constitutionally set debt limits. Exceeding the debt limit requires voter approval. In 2001, Oregon’s Republican-controlled legislature financed the Oregon Transportation Investment Act -- pork barrel highway projects disguised beneath a real need to repair Oregon’s aging bridges and make them earthquake resistant -- by pledging future gasoline tax revenues to pay off the bonds instead of pledging the “full faith and credit” of the state which requires a public vote to exceed the state’s debt limit.

Now the Legislature and state transportation officials find their future gasoline revenues are already spent. They are forced to consider scams like toll roads. Another scam with the same motive is charging highway taxes by the mile which discriminates against efficient cars.

Why the determined effort to avoid a vote on highway projects? New highway projects are controversial because it is increasingly clear that the post-World War II highway system that produced the post-World War II suburban sprawl is not sustainable as petroleum gets more expensive. Yet, well-entrenched interests who profit from sprawl are unlikely to give up their privileged positions gracefully.

That is why they are so anxious to avoid a public debate about trying to finance a highway system that is no longer affordable. They do not want a serious discussion of alternatives.

And that is why Oregon is among the states planning to go backward in the future by talking toll roads.

  • jim karlock (unverified)
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    Yeah, toll roads area great idea to get all the poor and low income riff-raff off of the road.

    No Thanks, JK

  • sal costello (unverified)
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    Here in Texas, Gov. Perry is using our gas tax dollars to build freeways then has unelected people set the toll rate. Read more about it here: http://salcostello.blogspot.com/

    Sal Costello Founder of AustinTollParty.com

  • Ross Williams (unverified)
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    I think it is important to distinguish between congestion pricing on existing capacity and creating new toll roads to provide uncongested travel.

    Many of the most congested parts of the freeway system are congested only a portion of the day. Charging everyone who uses the freeway during those portions of the day is no "anti-egalatarian", it is a fee charged to every user for the extra cost of providing capacity that is only used for a portion of the day.

    Of course, like any cost, an extra fee hits those with less money harder than those who have money to burn. And that creates "anti-egalatarian" effect since some people will choose not to ues the freeways rather than pay the fee. And that decision has the benefit of less traffic to those who do pay the fee.

    So how do you resolve this problem? By spending the tolls on subsidizing alternatives for those who do not use the freeway, not to build more capacity for those that do. A toll on the I5 Bridge over the Columbia would not only eliminate the need to add expensive new capacity by reducing the number of users, but it would generate revenue to pay for alternatives for those who choose not to pay the toll.

    Essentially, this is a win-win but not for those who benefit from new highway construction. Instead they want to take the existing gas tax and supplement it with tolls to build private highways for those who can afford the tolls. As Russell points out, that is "anti-egalatarian" in the extreme.

  • Don Smith (unverified)
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    I'm surprised at the backlash against variable toll roads. If you want to access the internet faster, you pay more for broadband. If you want to fly comfortably, you upgrade to first class. If you want your package to get there faster, you pay for overnight rates. That's the market. But it has the benefit of reducing congestion, paying for improvements, and allowing those who NEED or very much want to get somewhere fast the means to do so (ambuli, buses, people who don't like to sit in traffic, people who got up too late for the hour-long commute, etc.). Now, the gas tax should drop proportionately since the stretch of road covered by the toll will be maintained by the toll, and the rate should be set by the drivers themselves. That's how variable rate tolls work. I understand Sal's grievance with the way Texas is doing it, but frankly, that's an implementation issue, not a philosophical one. We all want something for nothing, and unfortunately, that's not how the world works.

    There's a reason everyone uses the NJ Turnpike. It's the fastest way to get where you're going. There are free options in Jersey, like I-95, Route 18, or any other number of alternate routes, but people pay the toll to get there faster. Not that the 'Pike is always traffic free, quite the contrary. But it's still faster than the other options and it's fair that those who want to get somewhere faster pay a premium.

    And Jim, I hope your tongue is in your cheek.

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    Projected revenues for toll roads are often much higher than reality -- as a recent Denver Post series discovered.

  • Ross Williams (unverified)
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    Now, the gas tax should drop proportionately since the stretch of road covered by the toll will be maintained by the toll, and the rate should be set by the drivers themselves.

    There are a couple things to keep in mind:

    1) The current gas tax is insufficient to pay the maintenance of the existing road system. All new construction is being paid for by deferring maintenance. It will be a long time before those roads go back to gravel, but it is already at a point where it will cost more to repair roade in the future as a result of them not being adequately maintained.

    2) I don't believe there is a single toll road proposal in Oregon that even pays for its construction cost in full, muchless maintenance. All the proposals to use tolls have the public subsidize the cost of the toll facility with additional public investment.

    3) Under congestion pricing, the idea is for people pay a fee to get other people not to use the facility. That fee ought to be used to build alternatives for the people who aren't paying the toll. The better those alternatives are, the lower the toll will have to be to create an uncongested facility.

  • EJ (unverified)
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    Usually I am against toll roads, but this Newberg by-pass is different because the people who will pay most of the tolls are the tourists that clog 99W now. People using the toll road are either going to the coast or going to the vineyards. Only a very small amount use it as a commuting corridor. These people have all the change thay need in their pockets to throw at a toll booth, so the arguiment by Mr. karlock about keeping the riff-raff off the road does not hold water. Poor people do go on vacation, but not as often as the wine seekers that permiate the Yamhill County vineyards every summer. Everyone has a quarter to give whent hey drive, because if you dont have any money to begin with, you dont have a car. Yes, some don't drive and have a car as a choice, but some can't afford the privilage to drive. Driving is a privilage, not a right, and because of that notion, toll roads have to come along sooner or later to pay for the privilage to traverse the roadway.

  • jim karlock (unverified)
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    Don Smith:I'm surprised at the backlash against variable toll roads. If you want to access the internet faster, you pay more for broadband. If you want to fly comfortably, you upgrade to first class. If you want your package to get there faster, you pay for overnight rates. That's the market. But it has the benefit of reducing congestion, paying for improvements, and allowing those who NEED or very much want to get somewhere fast the means to do so (ambuli, buses, people who don't like to sit in traffic, people who got up too late for the hour-long commute, etc.) JK: But that is not how it will be used by the anti-mobility crowd. It will be used to punish those of us that refuse to be herded into cattle cars for their transportation needs. Remember these people are too dumb to do the numbers and realize that mass transit uses MORE energy than new cars and that mass transit pollutes more than new cars and that mass transit costs more than small new cars (you can make the payments on a KIA for ½ of the actual cost of a Trimet monthly pass). People that stupid are just blindly following a religious dogma, in this case that of the Sierra club. We don’t want to give them any more control over our lives than they already have.

    Don Smith: Now, the gas tax should drop proportionately since the stretch of road covered by the toll will be maintained by the toll, and the rate should be set by the drivers themselves. That's how variable rate tolls work. JK: In an ideal world, not in the Oregon world run by the anti-mobility crowd. I even heard one city council person wish for $5.00/gal gas a few years back when it was under $2.00. He was stupid enough to think it would get people out of cars. It doesn’t in Europe and it won’t here! (Actually Europe drives a little less than we do, but not much less and driving is increasing faster there).

    Don Smith: There's a reason everyone uses the NJ Turnpike. It's the fastest way to get where you're going. There are free options in Jersey, like I-95, Route 18, or any other number of alternate routes, but people pay the toll to get there faster. Not that the 'Pike is always traffic free, quite the contrary. But it's still faster than the other options and it's fair that those who want to get somewhere faster pay a premium. JK:When the NJ turnpike was built, the goal was mobility, that goal is no longer shared by most of government.

    And Jim, I hope your tongue is in your cheek. JK:This is one of the few areas that I depart form the Libs. I might feel differently if PDOT and ODOT cared about people’s needs instead of social engineering. Why give them another tool to misuse?

    Thanks JK

  • Chris McMullen (unverified)
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    "The current gas tax is insufficient to pay the maintenance of the existing road system."

    Only because state and federal DOTs are bloated and wasteful. It'd be nice if our "small government" Republicans would actually represent their contituency.

    ODOT's $1.5 billion annual budget isn't enough to maintian our roads? What a joke.

  • Steve Bucknum (unverified)
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    I've been thinking about what this issue might look like 50 years from now.

    If the toll road idea works out, it will be viewed in 50 years as part of a broader movement (isolated issues always are). What would that movement be? The obvious answer as seen from today's viewpoint would be "privatization", but I think the future answer would be entirely different.

    I think this would be viewed as one part of the broad effort to restrict the options of poor people. Land use laws and population pressure are restricting where the poor can live. The price of operating what used to be "cheap" transportation (e.g. old beater cars), is going up through the roof and won't come down. The threat of terrorism is building towards a national ID program. Toll roads and the means to pay tolls in an environment where the government will know instantly where you make any payments - means that if you are poor, you will be restricted as to location and probably to mass transit. It will be hell to be rural and poor.

    I think this is one leg of the movement towards what will be viewed in 50 years as the "New American Ghetto" program.

    I'll put my crystal ball away now.

  • Ross Williams (unverified)
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    Only because state and federal DOTs are bloated and wasteful.

    "Bloated and wasteful" is meaningless blather. The fact is that the ODOT, like almost every transportation department in the country, is spending money on new capacity instead of on necessary maintenance. Like any large organization, I am sure there is waste in both those endeavors. The trick is to identify and eliminate it. Unless you can do that, knowing it exists is irrelevant.

  • askquestions1st (unverified)
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    Russell has put his finger on the real issues with the current incarnation about toll roads that the current posters have failed to address, although at the end he kind of wanders off in a dubious attempt to link this to anti-sprawl arguments. Let's be clear: The modern toll-road phenomena is not about using market principles to maintain and allocate use of a public asset. Rather it is about a form of privatizing what should be public assets for the financial gain of a few. The difference is that private profit is the objective of the modern toll-road movement and that was not the objective of the earlier model of collecting tolls just sufficient to maintain the public asset (the case of Robert Moses and NYC is in a class by itself). It is important to confront the acceptability of the values of those who advocate privatization, particularly when they misleadingly use arguments about employing market principles to best manage public assets to advance a privatization agenda.

    By the way, the Indiana case is the best argument calling into question Russell's confused attempt in the third-from-the-last paragraph to link this issue to the very confused anti-sprawl movement fashionable in the NW. The Indiana East-West Toll Road, like the Pennsylvannia Turnpike, is an artery that connects population centers, but most miles of that road travel through much more sparsely inhabited areas. Although the usage can be high by people moving between population centers and on the relatively few miles in population centers, the majority of miles travel through areas with much smaller tax bases and local usage. So even though these federally subsidized roads serve important local, state, and national economic needs, the total tax base to build and maintain such long roads has never been large enough to generate the required state contribution. In a real sense these roads were never "affordable" based on local and state taxes. It would be interesting if anyone could actually bring forth reliable numbers that suggest this class of roads has become any more unaffordable than any other public asset --- including public transit in urban areas.

  • Ross Williams (unverified)
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    Let's be clear: The modern toll-road phenomena is not about using market principles to maintain and allocate use of a public asset. Rather it is about a form of privatizing what should be public assets for the financial gain of a few.

    I agree. However, it would be mistake to reject tolling of existing capacity where those tolls are used to provide alternatives.

    The problem is that traffic engineers have looked at the equation distance = speed * time and assumed that it is the distance that is fixed. If they can speed travel it will take less time. But in fact, for human beings, it is the time we are willing to spend that is fixed. If you increase the speed, you increase the distance we are willing to travel. This makes adding capacity just chasing ones tale. Build it and they will come.

    The same is true for providing alternatives. If you build alternatives to people using their personal vehicle on the I5 bridge for every trip to Portland, some people will use them. And that leaves the bridge and Interstate capacity for higher value trips that really require that capacity. And it is far less expensive to build those alternatives than it is to build a new bridge and all the infrastructure in Portland needed to absorb the additional traffic the larger bridge brings across the river. Not to mention, leaving North and Northeast Portland healthier, more pleasant and more valuable places to live.

    So there ought to be a very healthy scepticism of tolls as a replacement for the gas tax to sustaine the highway industry. But it would be a mistake to throw out tolls as a means of managing existing capacity and providing alternatives for those trips that don't require a personal vehicle and a six lane freeway.

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