The two largest sources of concern related to America’s highway system are: the need to rebuild and modernize the aging Interstate highway system and the need to start replacing per-gallon fuel taxes with per-mile charges.
I recently suggested that the Transportation Research Board Future Interstate Study Committee had missed an opportunity to propose a way to deal with both problems simultaneously. That committee discussed but did not recommend a long-term financing plan for Interstate modernization using per-mile electronic tolling. In that article, I did not discuss how such a transition could take place, but that is the subject of a new Reason Foundation policy study.
“The Case for Toll-Financed Interstate Replacement” draws heavily on the TRB Committee’s argument that the interstates need both reconstruction and selective widening. Our new study also explains why long-term financing is wiser than pay-as-you-go funding using annual revenues, and that any plan that depends on a huge increase in federal gasoline and diesel taxes would be unwise as well as a hard sell to lawmakers.
It also explains that if we expect highway users to pay (over several decades) for a trillion dollars’ worth of work, they will need to get real value for the per-mile charges they are paying. And that, alas, is not what the TRB Committee report offered to motorists and truckers. Under its mid-range scenario, after 20 years of spending $57 billion a year on interstate modernization, the committee projects that both poor pavement and traffic congestion would be worse than it is today.
With political control of Congress now divided, circumstances are not promising for major new infrastructure funding. It seems highly unlikely we’ll have an agreement on either a switch from per-gallon to per-mile highway fees or a switch to tolled Interstates.
Instead of proposing those options, our report calls for a voluntary program to be offered to all 50 states. For any state that wanted to move to toll-financed Interstate replacement, Congress would lift the 1956 federal bans on tolling and on commercial rest areas (i.e. service plazas), but only if the state in question agreed to a set of conditions that would establish a genuine value proposition for motorists and truckers.
Here are the six conditions we are proposing, and the reason for each.
- Tolls would have to be collected electronically and charged for each mile traveled. (This would begin the transition from per-gallon to per-mile fees.)
- Tolls would be collected in lieu of fuel taxes rather than in addition to those taxes—meaning fuel-tax rebates from the state would be required. (This would reinforce the goal of having per-mile charges replace fuel taxes.)
- Toll revenues would be used only for capital and operating costs associated with a state’s Interstate highways, bridges, and tunnels. (This would prevent tolled corridors from being used as cash cows.)
- Tolls could start to be collected on a particular stretch of road only after that stretch were rebuilt or replaced and opened to traffic. (This would ensure that users pay only for something better than the status quo.)
- Tolls would have to apply to all vehicles that use rebuilt Interstates. (This would prevent discrimination against trucks.)
- For a given category of vehicle, tolls would have to be charged at the same rate for in-state and out-of-state customers. (This would ensure there would be no discrimination in interstate commerce and travel.)
As I watch the debates going on in states where Interstate tolling is being considered, I’m often dismayed for several reasons. First, there is far too much emphasis on revenue generation and far too little concern about the value for newly tolled customers.
Second, there is a strong desire to get tolling in place as soon as possible—without assurances that those who will pay tolls will be able to count on receiving meaningful benefits in return. There is no consideration that per-mile tolls can and should be the first step in a move to mileage-based user fees—which should be seen as a replacement for fuel taxes, not an add-on. There is also still too much talk about charging only trucks, and there are all kinds of proposed schemes to make out-of-state Interstate users pay far more than in-state users.
Congress established the interstates to aid inter-state travel and commerce. If, as seems highly likely, Congress does not come up with money needed for long overdue reconstruction work, it still has an obligation to make sure the interstates remain part of a national system, one that does not discriminate between in-state and out-of-state users.
Lawmakers also need to make all users pay for this immense and much-needed make-over. The above conditions are an attempt to ensure that states that are taking advantage of our proposed voluntary program would do so in a way that would both add value to all users of replacement corridors and preserve a seamless interstate system that eases inter-state travel and commerce.