For tolling the future

Fortune tolling might best describe what happened when Indiana put its toll road up for bid. The state received an offer of $3.85 billion, far more than had been expected. Other states with roads, bridges, and tunnels that are already subject to tolls or could be converted to toll facilities have already taken notice. Should truckers oppose such initiatives? Historically, the industry has regarded

Fortune tolling” might best describe what happened when Indiana put its toll road up for bid. The state received an offer of $3.85 billion, far more than had been expected. Other states with roads, bridges, and tunnels that are already subject to tolls or could be converted to toll facilities have already taken notice.

Should truckers oppose such initiatives? Historically, the industry has regarded tolls as double taxation when there is no credit for fuel taxes paid on fuel consumed on the toll roads. In addition, toll collection can cause significant delays, as anyone trying to get off the New Jersey Turnpike at the end of a holiday can attest.

But, just as motor carriers have increasingly found that they can impose a fuel surcharge to pass along a fuel price increase, they may find customers will accept pass-throughs of toll increases. Certainly, taxi passengers have long accepted the necessity of paying separately for tolls.

The worry that private toll operators will squeeze “captive” customers through excessive toll increases seems exaggerated. Some existing and proposed private toll operators are subject to rate approvals by a public agency. In other cases, the market, in the form of alternate routes available to price-sensitive customers, will keep toll facilities from raising rates too far. In any case, private operators may not be any more arbitrary than some existing public toll agencies, which have been known to jack up tolls more on trucks than cars without a good economic rationale. In fact, private toll operators are more likely than many public authorities to innovate with toll-collection methods, variable pricing, real-time information on traffic flow, and other devices which can help truckers as well as the agency save time and money.

If Indiana uses its toll road revenue to accelerate building and rebuilding other highways around the state, as the governor has proposed, that alone could make higher tolls worthwhile for many truckers. At the same time, the private operator would undertake capital improvements that have been stymied for 20 years.

Certainly, resistance to increasing traditional highway funding sources remains high, and not just in Indiana. Wisconsin just repealed its longstanding fuel tax indexing, a change that will cut into the state's highway funding base. Tolls appear to be the only way Maryland and Virginia will find the funding to add badly needed capacity in the Washington, DC suburbs, as well as other parts of Virginia.

The cost of materials for highway construction jumped 14 percent in 2005, according to the Bureau of Labor Statistics. But the revenues coming into federal and state highway funds rose far less, despite several one-time shifts from the federal general fund. With gasoline prices running 10 to 20 percent higher than a year ago, conservation is likely to depress highway tax revenues for years into the future. The Bush administration's latest budget projections, released in early February, shows the federal highway account will be depleted by 2009. A report released by the U.S. Chamber of Commerce predicted a bare cupboard by 2008. Either way, states need to plan now how to make up for a possible shortfall in both state-generated funds and federal aid.

The bottom line: Consider the alternatives before opposing, or even remaining silent about, new tolling proposals. Without toll revenues, both toll roads and other projects in a state may be condemned to deteriorating pavement and growing congestion. By being for tolls, you may forestall a bumpier future.

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