NMA E-Newsletter #164: Are Toll Roads the Future of the Interstate Highway System?

Historically, states have been prevented from slapping tolls on existing roads. But thanks to a federal pilot program designed to fund interstate improvements through toll revenues, the Federal Highway Administration (FHWA) has approved plans for three states to do just that.

North Carolina is the latest prize-winner (or loser, depending on your perspective) and joins Virginia and Missouri in pursuit of tolling revenue. North Carolina and Virginia are devising schemes to toll I-95, while Missouri will sink its teeth into all 250 miles of I-70 within its borders.

Other states, including Rhode Island, Pennsylvania and Arizona, submitted applications but were rejected for various reasons. Pennsylvania lost out primarily because it wanted to divert toll revenue for purposes other than to maintain the toll road.

The North Carolina plan calls for tolling the state’s entire 182-mile stretch of I-95 to help pay for $4.4 billion in improvements to that highway. Plans call for widening the entire length, bridge raising and reconstruction, rebuilding of interchanges, and safety upgrades.

The problem is, according to the North Carolina DOT, the state only has the resources to finance about 10 percent of the project. “Without putting a toll on I-95, there is really no other way to make these improvements, and these are necessary improvements,” said a DOT spokesperson.

That “there is no other way to make these improvements” is the driving theme of the FHWA agenda, and it should make motorists dubious. Remember the “too big to fail” refrain from a few years back?

By design, the I-95 plan will put the heaviest toll burden on long-distance truckers, out-of-state drivers and others driving longer distances. Local users will be able to travel shorter distances (around 10 miles, or so) without having to pay tolls. Sounds like the locals have been thrown a bone to discourage opposition. But what’s to prevent the tolls on local drivers from going up once the system is operational?

And what about the inevitable lawsuits that will result from the disparate costs charged to different groups of drivers?

The point is toll roads never work as promised. Instead of eliminating congestion and safety hazards, they push them to secondary roadways where they are less likely to be addressed. Lack of accountability leads to diversion of funds and other abuses. Electronic tolling sounds good until one considers the potential for increased surveillance and heavy-handed traffic enforcement.

And it will only get worse, if some lawmakers and special interests have their way. A proposed amendment to the transportation bill currently in the U.S. Senate would expand the FHWA program to seven more states. The ultimate goal is to “provide maximum flexibility to states to toll any portions of their Interstate systems and non-Interstate freeways,” according to one backer of the amendment, The U.S. Tolling Coalition.

Toll road advocates point out that states are facing severe funding pressures in maintaining and rebuilding interstates. They say traditional revenue streams like fuel taxes are insufficient given the scope of the need. But isn’t adjusting the fuel tax the simplest and most equitable to address funding shortfalls (provided the revenues go solely toward road projects)?

Motorists already pay nearly $120 billion in user fees annually, two-thirds of which come from fuel taxes. However, more than $26 billion (about 20 percent of the total) goes to programs not directly related to highway improvements or expansion.

Rather than defaulting to conventional wisdom that says tolling is the only solution, policymakers should examine why existing financing models have fallen short. Hint: It may have something to do with poor fiscal management, wrongheaded priorities and lack of political will. ♦

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