To Toll or Not: Could the Feds Lift a Ban on Interstate Tolling?

Transportation advocates want Congress to OK tolling on interstates, allowing states and cities to generate their own revenue.
by | June 24, 2013
 

If Patrick Jones has his way, you could wind up paying a toll every time you drive on the interstate.

If that sounds shocking, it should. Historically, tolling on 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.

But Jones, who leads the trade association representing toll owners and operators and the businesses that serve them, says it's high time for a change. "For more than 50 years, we've relied pretty heavily on the gas tax to fund the construction and maintenance of roads in this county," Jones says. "Now the well has run dry. We're not generating as much revenue from the fuel tax as we have before. We really see tolling as an alternative to the gas tax -- a very powerful alternative."

Indeed, the 18.4 cent-per-gallon gas tax has remained unchanged for 20 years. Come 2015, the Highway Trust Fund won't be able to meet its obligations, according to the Congressional Budget Office. And federal lawmakers -- facing political pressure -- are struggling to develop any big new sources of revenue for roads and transit.

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To that end, Jones wants Congress to simply lift the ban on interstate tolling, allowing states and cities to generate their own revenue. He and a growing number of transportation experts argue that if Washington won't step up and develop ways to provide more funding, it should at least empower other jurisdictions to do so.

Of course, Jones' organization, the International Bridge, Tunnel and Turnpike Association (IBTTA), has a stake in the fight. The private-sector companies that IBTTA represents would ostensibly see expanded business opportunities from increased tolling.

Several independent organizations, however, back the cause as well, including Building America's Future Educational Fund and the Bipartisan Policy Center. Both were among the groups that signed a letter sent to leaders of the congressional transportation committees last year arguing that in the absence of new funding sources, Congress should ease up on interstate tolling rules. "If states and metropolitan regions are going to be asked to do more in transportation," they wrote, "and if more of the funding and investment responsibilities are to devolve to them, it is essential that this legislation remove the restrictions to their capacity to innovate."

Critics of interstate tolling argue that it's tantamount to double taxation, since the roads would have already been paid for with gas taxes. Others note that adding tolling to existing interstates would be unfair to people who already own homes and businesses along those routes.

But tolling supporters say given the need for constant maintenance and inevitable upgrades, reliable and sufficient funding is necessary. "Our argument is a road is never paid for," Jones says. "When someone says to me, 'When should the tolls come off?' My response is never."

Federal tolling prohibitions have been relaxed since the 1990s, primarily by granting states greater flexibility to toll the interstate in cases where they're building new lanes. Last year's highway bill further expanded tolling by easing requirements that states get federal approval in those cases, but it kept the underlying principle -- no tolling of existing interstate capacity -- intact.

Since 1998, the one major exception has been a pilot program that allows states pursuing major rehabilitation to interstates to toll them. The program is in just three states; it applies to I-95 in Virginia and North Carolina, and I-70 in Missouri.

In the case of Missouri, for example, the interstate is in need of a complete rebuild that could cost as much as $4 billion, according to a recent blog post by HNTB, an architecture, civil engineering consulting and construction management firm that is involved in the undertaking. The figure is so high that if the state didn't have the unique tolling option, It would have needed to shelve most of its other scheduled transportation projects for a decade. Jones argues that other parts of the interstate will get to the point that they'll be unusable unless someone is willing to put up the money to fix it. "Essentially, we'd say it's new capacity because unless we rebuild it, we'll have to close it," Jones says.

Still, the prospect of expanded tolling isn't without its flaws. If the ban on tolling existing capacity was ever lifted, federal officials would still have to play some sort of coordinating role to ensure that the mismatch of tolls didn't inhibit interstate commerce. Skeptics of interstate tolling also note that states may very well be tempted to toll the parts of their highways that are most likely to be used by out-of-towners.

Joshua Schank, head of the Eno Center for Transportation, says the authors of the original interstate highway legislation specifically chose to fund the system via the gas tax as opposed to tolls because they recognized that some parts of the network would need to subsidize others. "There will never be enough money for tolls to fund I-90 through Montana," Schank says. He says tolling existing capacity has more promise in urban areas, where it can also be used as a tool to mitigate congestion.

Meanwhile, despite the dire need for transportation funding in some places, there's no guarantee that states would even take advantage of tolling if it was allowed. The idea of having citizens paying tolls on roads that were once free -- at a time when gas costs more than $4 per gallon in some places -- would undoubtedly be a political challenge. The North Carolina General Assembly, for example, is debating whether to allow I-95 tolling, and earlier this year, lawmakers in Virginia enacted a rule that threatens the prospect of I-95 tolling as well. "There's still a great deal of backlash [against tolling]," says Greg Cohen, president of the American Highway Users Alliance, which opposes it. "Even though some government people, construction and engineering firms, and think tanks think it would be wonderful ... it's proven to be highly unpopular locally."

There was big debate on tolling in Congress last year, however, when a trio of moderate senators -- Democrats Tom Carper of Delaware and Mark Warner of Virginia, and Repubican Mark Kirk of Illinois -- introduced an amendment that would have lifted the cap on pilot projects allowed to experiment with tolling. But Republican Sen. Kay Bailey Hutchison of Texas countered with her own amendment that would have banned interstate tolling. Both sides ultimately withdrew their proposals.

Cohen says he doesn't expect a similar debate emerging when MAP-21, the authorization bill that governs federal surface transportation spending, expires next year. "There's very little desire to relitigate those issues again in a year," he says.

Others say the timing could be right for that debate. Lawmakers used a convoluted patchwork of maneuvers to provide level funding in the current highway bill, and members of congressional transportation committees concede many of those were one-time options, which will make funding an even more pressing issue in the next bill.

Interestingly, interstate tolling tends to get support from the political center, while lawmakers who lean heavily to the left or the right have been the biggest opponents. Liberal Democrats oppose it for populist reasons, arguing that it's an onerous fee that low-income Americans can't afford, while hard-line conservatives oppose it as just another expensive government-imposed fee.

Bill Shuster, the new chairman of the House Transportation and Infrastructure Committee, has said every funding option is on the table when lawmakers start debating the highway bill next year. He hasn't revealed publicly many details of what he's envisioning, but tolling advocates are hoping he's open to ideas.

"If federal funding is going to be stagnant, then the federal government ought to get out of the way and allow states to innovate, to exercise discretion and to develop their own sources of revenue," says Emil Frankel, a visiting scholar at the nonprofit Bipartisan Policy Center.

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