BIKE: Toll roads as national policy?

[Roger Baker]

Whats going on here? (see article at bottom)

The underlying problem is that the cost of road-building as usual is  
exceeding tax revenues, so the federal government is taking the path of  
least resistance.  "Double tax" toll roads seem about to become  
national policy:

"... Congress has little appetite to raise the tax, leaving tolls as  
one of the few remaining funding options for road builders. ''Gas taxes  
are deemed something we can't touch. It's political suicide to add a  
gas tax," said Neil Gray, a spokesman for the International Bridge,  
Tunnel, and Turnpike Association in Washington. ''In that bind, what  
are your options? You can't do nothing."..."

But the reality is that unavoidable increases in the price of fuel due  
to  oil cost are ALREADY far greater increases than any of the gas  
taxes contemplated. So why can't they raise gas taxes?

The real problem is the low credibility of special interest-dominated  
government that lacks the public trust to shift to a wiser policy that  
does not involve paving the countryside as usual to benefit a whole  
constellation of special interests.

This all amounts to a train wreck in slow motion. Building toll roads  
necessarily implies borrowing money.

This ability to borrow implies a faith on the part of some lender that  
the economics of transportation will not change for decades. That  
implies lots of cheap oil. But the reality is that, barring a world  
depression caused by high oil prices, gasoline is likely to go above $5  
a gallon in the next five years, trashing the economics of toll roads.

The toll road bond lenders and their willingness to finance such  
craziness seems like the weak link. As long as government is myopic and  
corrupt (few signs of improvement here), it will try to borrow as much  
money as the lenders are willing to front for toll roads. At some point  
within the next few years (I say by 2008) the herd mentality on Wall  
Street will change and the lenders will slam the window shut.

-- Roger


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<http://www.boston.com/news/nation/washington/articles/2005/04/10/ 
highway_bill_could_pave_way_toward_more_tolls_on_interstates/>

The Boston Globe
Highway bill could pave way toward more tolls on interstates
By Alan Wirzbicki, Globe Correspondent  |  April 10, 2005

WASHINGTON -- A provision in the $284 billion highway bill under  
consideration on Capitol Hill could open the way for more tolls on the  
nation's congested interstates, marking a departure from long-standing  
federal highway policy that has traditionally frowned on collecting  
tolls to pay for roads built with federal tax dollars.

Under the transportation bill passed by the House of Representatives  
last month, states would be allowed to convert overall up to 25  
segments of the interstate highway system into toll roads over the next  
six years. The Senate is expected to vote on similar legislation this  
month.

The proposals, backed by the Bush administration, would ''greatly  
expand state tolling authority" over roads that were constructed with  
federal dollars, said Darrin Roth, the director of highway operations  
for the American Trucking Association, which opposes the changes.

Currently, only highways such as the Massachusetts Turnpike that were  
begun before the establishment of the free interstate system in 1956  
can collect tolls.

The proposal marks a response to the growing clamor among state highway  
officials that the federal government's gas tax of 18.4 cents per  
gallon is no longer enough to fund the nation's transportation needs.  
Congress has little appetite to raise the tax, leaving tolls as one of  
the few remaining funding options for road builders.

''Gas taxes are deemed something we can't touch. It's political suicide  
to add a gas tax," said Neil Gray, a spokesman for the International  
Bridge, Tunnel, and Turnpike Association in Washington. ''In that bind,  
what are your options? You can't do nothing."

Backers of the proposed legislation envision states adding toll lanes  
with less traffic next to existing free highways, giving motorists a  
choice, but opponents say the bill could also allow states to simply  
turn existing interstates into toll-only roads.

While only one state, Virginia, has specifically requested permission  
to charge tolls on a stretch of Interstate 81 in the Shenandoah Valley,  
the spread of technology for Fast Lane and EZ-Pass has eased concerns  
about safety and congestion around toll plazas and made tolls more  
attractive to highway officials.

Both the House and Senate legislation mandate that any new tolls would  
have to use Fast Lane or a similar device.

In New England, Connecticut lawmakers are considering charging tolls on  
I-95 for the first time since 1985, and other congested Northeastern  
states could be tempted to take advantage of the tolling proposal if it  
clears Congress.

A Boston city councilor recently proposed charging commuters for  
entering the downtown area, and state Representative Joseph F. Wagner,  
chairman of Massachusetts' Joint Committee on Transportation, has said  
that the Commonwealth needed to consider tolls as a way of meeting its  
highway needs.

Some states have also expressed interest in using electronic tolls to  
adopt ''congestion pricing," a practice already in use in some parts of  
Europe that aims to encourage motorists to drive during off-peak hours  
by lowering tolls during off-peak hours.

On one stretch of highway near San Diego that uses congestion pricing,  
tolls vary from as low as 50 cents in the middle of the night to $8  
when the highway gets particularly congested.

By providing an incentive to drive outside of rush hour, Gray said,  
''you're spreading the peak."

''It doesn't even matter if you make money," he said. ''If you can make  
the roadway operate more rationally, that's what you're looking for."

In March, the US House of Representatives defeated an amendment that  
would have required such lanes to become free once their costs had been  
recouped in tolls. Instead, under the House bill, states that adopt  
congestion pricing would be allowed to keep it as a mechanism to fight  
congestion and fund other transportation projects.