Friday, February 20, 2009

A transportation finance concept with widespread appeal?

Governor Jim Doyle's apparent pronouncement that he is open to considering tolls to help finance transportation improvements in Wisconsin (which has since been qualified) was treated as front page news in yesterday's Milwaukee Journal Sentinel. While this may have been justified from a political perspective given the Governor's previous strong opposition to tolling, such open-mindedness actually would have put Wisconsin in the mainstream.

As the Journal Sentinel article noted, utilizing tolling mechanisms to more appropriately price the true cost of transportation infrastructure is a concept that has been advocated by conservative think tanks such as the Reason Foundation for years. More recently, the concept also has been touted by transportation industry interests (such as the American Road & Transportation Builders Association) who are concerned that increased use of fuel efficient vehicles has rendered the gas tax obsolete as a means of financing infrastructure needs.

But they're far from alone. A blue ribbon transportation policy commission and a commission on transportation finance - both authorized by Congress - have cited the need to relax or remove restrictions on tolls on federal interstates. Also joining the call for tolling have been groups advocating for more investment in mass transit, such as the Brookings Institution and American Public Transit Association.

What's that, you say - transit proponents pushing for highway funding sources? Therein lies one of the most interesting aspects of the movement to toll: it has shown signs of appealing to people on all sides of the political and transportation spectrums. The key is in the pricing aspect of tolling, i.e. the ability to use tolls not simply as a means of collecting additional revenue to pay for transportation projects but as a means to price use of the transportation infrastructure to reflect the true cost of such usage.

A 2006 report by the Transportation Research Board (TRB) of the National Academies of Sciences argues that "an important opportunity exists today to create an extensive system of tolled expressways and expressway lanes …although such a toll program probably would not greatly increase the funds available for highways, it could expedite construction of critical highway improvements, provide a tool for managing congestion, and help gain public acceptance of road pricing.”

The "road pricing" scenario envisioned by the TRB would reflect the true cost of maintaining the road and highway infrastructure, a significant percentage of which today is borne by general taxpayers, not solely users. It also would incorporate the market-based principle of charging higher prices for use of the infrastructure during periods of peak demand. This approach not only would involve use of tolls but, more controversially, also use of GPS or other technologies to track and charge individuals for actual miles travelled, as opposed to taxing them for gasoline usage. Oregon has piloted the concept and is now considering broader usage.

With regard to its potential benefit for transit, the TRB argues that if subsidies for highway use were eliminated, transit would have the "market power" to increase fares and improve service without additional public support. In other words, if we started charging motorists the true cost of using the transportation infrastructure, then more people would opt for transit, which would improve the fiscal plight of transit systems and also allow them to increase their charges without losing riders.

Clearly, broader use of tolling and road pricing faces some legitimate policy hurdles, not the least of which are issues of privacy and fairness to low-income populations. Nevertheless, in light of the momentum these strategies are gathering at the federal level, an open mind might be a necessity.

No comments: