Why We Should Pay for the Highway Miles We Use

We expect to pay for services like phones and electricity and water that are reliable. Shouldn't we treat roads the same way?
July 17, 2015
By Scott Lazenby  |  Contributor
Scott Lazenby is the city manager of Lake Oswego, Ore., and an adjunct professor at Portland State University's Hatfield School of Government.

When you live or travel in a third-world country, you can't take basic infrastructure for granted. Water might come out of a faucet when you turn it on, or it might not. Electric lights might work, or they might not. Something might happen when you flush a toilet, but you probably don't want to know where the sewage goes.

Here in the U.S., we don't accept these kinds of conditions. We have little tolerance for outages of services like cable TV and cellphones, water, electricity, natural gas, garbage collection and Internet access. We insist on, and pay for, reliable provision of all the basic services. Except one: roads and highways.

We put up with crumbling highways, falling bridges and frequent failures of service--congestion caused by systems pushed beyond capacity. In this area, we are solidly in the third-world camp. What's wrong with us?

Part of the answer is defeatism. You can't build your way out of congestion, the pundits tell us. Add a lane to a freeway, and development and driving patterns will shift so the new lane is quickly pushed beyond capacity. Adding capacity is therefore futile.

But this is only true because we give the service away for free. If we didn't meter electricity or water, there is no doubt these systems would be equally over-subscribed.

Some have argued that we do pay for road capacity in the currency of aggravation and squandered productivity, by putting up with the time lost to congestion. When it gets bad enough, we finally change our driving habits. But if you think about it, this is a perverse and lazy way to manage demand for road use.

If as a society we refuse to pay what it takes to keep up with highway demand, then at the very least we should manage that demand so that no highway or arterial is ever overloaded. Many areas use ramp metering, but that is obviously ineffective. It should be possible instead to use computer-controlled demand management to allow vehicles onto a ramp only if there is a safe margin in downstream capacity.

But while controlling demand for road capacity by denying access to the roads might take us out of third-world status as far as congestion is concerned, it would be a totalitarian, Marxist solution, not an American, capitalist one.

The American way would be to treat our road system like a utility, the same way we treat electricity or water. We have the technical capability now, thanks to GPS, to charge at the gas pump for every mile we use rather than the current practice of collecting a per-gallon tax. Because of the high cost of adding capacity anywhere, but especially in urban areas, the per-mile charge would of course be highest when demand is highest, during peak periods, and lowest in the middle of the night. Rather than denying drivers access to the system, demand would be managed through price signals that would let drivers decide how and when it is worth it to use the system.

The concept of congestion pricing isn't new, but it has typically been considered for only a few highways within a system or for higher-toll express lanes. In contrast, we can, and do, meter every drop of water and every kilowatt-hour of electricity. It doesn't make sense to put a price on some components of the system and give away the rest for free.

The revenue generated by per-mile pricing could be used to both increase capacity and to maintain the highway system. This revenue-producing result of demand pricing isn't merely a nice side effect; it is precisely how a utility works. Over time, drivers would pay the cost--no more and no less--for the facilities and capacity they consume. (For a detailed discussion of per-mile pricing, see Randal O'Toole's Cato Institute paper on the subject.)

The answer to the question "What's wrong with us?" has nothing to do with a lack of technology or experience in providing basic public services. Allowing any road or highway to be used beyond its capacity is not only a systems failure; it is a failure of public policy and leadership. People like to use roads for free, but letting that desire overwhelm a sensible approach amounts to the kind of democracy that H.L. Mencken described: "the theory that the common people know what they want, and deserve to get it good and hard."