In 2009, bridges earned a grade of C, roads a C-minus and public transit a D on the American Society of Civil Engineers' "Report Card for America's Infrastructure." Roads and bridges are largely funded by revenue from the state and federal gasoline taxes. But the 18.4-cents-a-gallon federal levy hasn't been raised since 1993. Inflation has eaten away at the buying power of that gas-tax revenue.
Our transit systems are in even worse shape. According to the Federal Transit Administration, 29 percent of American public transportation assets are in poor or marginal condition.
With gasoline prices currently near $4 per gallon, there's not much appetite for higher gas taxes. Even if they are increased, better fuel efficiency and the rise of alternative-fuel vehicles would result in diminishing returns. Add it all up and you have a drag on economic growth.
Recent technological advancements may offer part of the solution.
With "open-road tolling," enabled by electronic toll-collection technology, motorists don't even have to slow down at toll booths. They could be charged electronically each time they use a limited-access highway in metropolitan areas that experience the most congestion and would produce the most revenue. Since all limited-access highways in a region would be tolled, prices on each road would likely be lower than on the small number of highways that currently charge.
Open-road tolling could bring a new level of fairness to highway finance. The burden would be spread among all motorists in a metropolitan area instead of only on those unlucky enough to live or work near a toll road. Not only would how much you pay depend on how much you drive, but those driving trucks that wear down pavement quicker or pollute more could pay a higher rate, while drivers of clean, relatively low-impact vehicles could pay less.
Technology can also promote efficient use of existing assets by spreading out demand. We can charge more during rush hour, less during off-peak times. The resulting reduction in congestion would also yield clean-air benefits.
Motorists could pay an additional charge to drive in a lane that offers lower travel times. Those who think drivers would be unwilling to spend a little for better service need only look at the success of companies like Federal Express and UPS.
Revenue from open-road tolling could be used to make desperately needed maintenance investments. In 2008, the cost of improvements needed to maintain the operational condition of American highways was estimated at about $500 billion.
Open-road tolling could lead the transformation to a financing system in which revenue is linked to customer satisfaction, complete with features such as rebates if traffic fails to move at a guaranteed speed.
Toll revenue should be invested with an eye toward creating new customers and providing them with mobility. Customers don't think in terms of transportation modes; they just want to get where they're going, and highways are only part of the answer.
The revenue could provide a way to pay down the $78 billion the Federal Transit Administration says it would take to get American transit assets to a state of good repair. Wise transit investments translate to better service and more riders, which would take vehicles off the road and yield environmental and mobility benefits.
Cross-subsidization is already used in New York, where the Triborough Bridge and Tunnel Authority operates seven bridges and two tunnels that generate about $900 million annually. Revenue in excess of what's needed to maintain authority assets (about two-thirds of the total) goes to New York City's transit authority.
Open-road tolling is currently in use in states including California, Georgia, Minnesota, New Hampshire, New Jersey, Oregon, Texas and Washington. But none have yet expanded the program to each of its metropolitan areas.
Open-road tolling offers a fair, sustainable way for states to pay for the transportation infrastructure that is a cornerstone of economic growth while also maximizing efficiency and providing environmental benefits.
