U.S. Transportation Secretary Ray LaHood spoke to our Legislative Conference yesterday (March 8) in Washington, DC. He got a big laugh from delegates when he said he had come to IBTTA for the second year in a row to get a lecture about tolling the interstates.
On a more serious note, LaHood said the states want to build big projects, but many states are simply too cash-strapped to attempt them. He said the Department of Transportation wants to help them find ways to pay for the transportation solutions they need. In his blog, he said “repairing our existing roads, bridges, and tunnels and building new projects is essential to pushing the economy forward.”
The Secretary said he supports tolling and sees it as one component of America’s overall transportation funding mix. He said he supports the use of tolls on new road capacity but not on roads that have already been built. He cited examples of linkages with other modes on projects that the U.S. Department of Transportation has supported, such as combined highway and transit solutions. “We would be interested in hearing some new ideas about tolling,” LaHood said. “Propose some new ideas and we’ll take a look at them.”
Later in the day, I spoke with a senior U.S. DOT official who said the Secretary is sensitive to the views of Congress on transportation funding and tolling. According to this official, the Secretary isn’t hearing much support for tolling from members of Congress.
This observation reinforces what former Pennsylvania Governor Ed Rendell told our delegates on March 7. “You will never convince the Congress directly that they should increase gas taxes or allow tolling on the interstates. Therefore, you have to convince the hometown. When the folks from home reassure their members of Congress that they won’t be thrown out of office because they support commonsense things like expanded use of tolling to improve infrastructure and create jobs, that’s when things will change,” Rendell said.
So here’s our question: What new ideas about tolling would you propose to Secretary LaHood? Beyond the call to ease restrictions on tolling interstate highways, what new ideas would you propose?
On a more serious note, LaHood said the states want to build big projects, but many states are simply too cash-strapped to attempt them. He said the Department of Transportation wants to help them find ways to pay for the transportation solutions they need. In his blog, he said “repairing our existing roads, bridges, and tunnels and building new projects is essential to pushing the economy forward.”
The Secretary said he supports tolling and sees it as one component of America’s overall transportation funding mix. He said he supports the use of tolls on new road capacity but not on roads that have already been built. He cited examples of linkages with other modes on projects that the U.S. Department of Transportation has supported, such as combined highway and transit solutions. “We would be interested in hearing some new ideas about tolling,” LaHood said. “Propose some new ideas and we’ll take a look at them.”
Later in the day, I spoke with a senior U.S. DOT official who said the Secretary is sensitive to the views of Congress on transportation funding and tolling. According to this official, the Secretary isn’t hearing much support for tolling from members of Congress.
This observation reinforces what former Pennsylvania Governor Ed Rendell told our delegates on March 7. “You will never convince the Congress directly that they should increase gas taxes or allow tolling on the interstates. Therefore, you have to convince the hometown. When the folks from home reassure their members of Congress that they won’t be thrown out of office because they support commonsense things like expanded use of tolling to improve infrastructure and create jobs, that’s when things will change,” Rendell said.
So here’s our question: What new ideas about tolling would you propose to Secretary LaHood? Beyond the call to ease restrictions on tolling interstate highways, what new ideas would you propose?
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Customers could be incentivized to use toll roads, thereby easing congestion on public highways, if a federal tax deduction was made available for tolls. Currently, individuals may deduct the cost of parking and public transportation, but tolls are not eligible. Expanding the definition to include tolls would benefit both toll roads and the local highways. This would also take us further down the road in developing strong Public-Private Partnerships.
ReplyDeleteOne idea would be to think of road user charging as a supplemental revenue source, not a replacement for the gas tax. It is a bad idea to give up an existing tax; they are too hard to get in place. Start road user charging for electric vehicles (EVs). We need taxes and tolling to keep our cars rolling. To catalyze a new “pay as you go” mindset, the Feds could advocate a twenty year graduated schedule of federal gas tax increases to disincentivise carbon based travel, with the first increase coming in 2015 or 2016. The road user charging implemented for electric vehicles could start feeding a new trust fund: perhaps called the “Surface Transportation Sustainability Trust Fund.” It could be called STST, or ST2. An initial deposit of $10B in the ST2 fund could incentivize EV use. The ST2 fund could address EV user “range anxiety” by developing federal standards for EV recharge facilities in and around our interstate corridors, providing a safe, secure and adequately sized recharge experience. The fund could focus on rehabilitation and repair as opposed to new highway construction. The ST2 fund could provide subsidies for Toll Authorities to pay for conversion of abandoned toll plazas created by cashless tolling to Regional EV Recharge facilities.
ReplyDeleteMaurizio Rotondo
ReplyDeleteMy view is from Europe, and it is perhaps not such appropriate to intervene in a US specific issues, but some general ideas came to my mind and I hope they may be useful.
First, I perceive an odd feeling from US, where almost everything can be run by "contractors" (from hospitals to trains, to prisons, to nuclear power plants....) except roads. Clearly if tolling wants to expand, it has to overcome this strong, although somehow hidden, feeling.
Interstates do exist, they reasonably work and are for the current drivers generations just a fact of life; tolling them would be a new burden, and people would ask "why?".
The answer to the "why?" may be indirect though; tolling is a wonderful tool relieve an aching situation, where a link is missing or it is definetely not matching the necessities. It may be a bridge, a ring-road, a new something, if it eases life people would not ask why, people would say "thanks for it, my life is now easier".
From those considerations my suggestion would be to search for bottlenecks, missing links, brownfields that could not possibly be financed otherwise, and use tolling as a swiss-army-knife for those cases, to prove that "yes, tolls can...."; that may eventually become a lever on which base efforts to propose tolls also for other assets, once citizens would start appreciating what tolls can do for them.
One very important fact to understand when tolling existing infrastructure, is that, when tolling existing infrastructure the toll tariff is based on the design, construction and finance costs of the upgraded infrastructure as well as the future upgrade, operations and maintenance costs of the upgraded infrastructure; it is not based on what is there already, in fact what is there already, has been paid for, as always argued by the public, but unfortunately their argument stops there. The continuation of this argument is that the cost already incurred is a sunk cost and it is not recovered(again)from introducing a toll, the toll pays for the upgraded infrastructure. Thus the benefit of tolling existing infrastructure is a lower toll tariff.
ReplyDeleteIf this very fundamental and logical principle can be sold to the politicians and thereafter to the public, you will progress. The challenge faced is to set an acceptable toll tariff(or rate per mile); however, doing this is no easy task, numerous toll strategy and financial models with some form of public involvement will direct the process?
Once an acceptable rate per mile is established it will inform the funding process; then government can decide how to achieve the rate; this can be done by government part funding the project or by extending the debt repayment period(plus clever financial instruments) and even concessioning a project.
Send the folks to SA to learn from us, we have been tolling existing roads since 1984, and we are still around.........
Regards,
Neil Tolmie
CEO
N3 Toll Concession (Pty) Ltd
If, as we hear from Sec. LaHood and Chairman Mica, tolling on the federal-aid highway system will be limited to "new capacity" than HOT lanes and other kinds of managed lanes should offer the best opportunity for future tolling. Given the expected revenue constraints, there will be few new "greenfield" toll roads built in the foreseeable future. The most likely future candidates for tolling will be networks of tolled managed lanes built in existing highway corridors--as Bob Poole and I recommended several years ago.
ReplyDeleteKen Orski
Editor
Innovation NewsBriefs
While not new, I would emphasize managed lanes and congestion pricing. Also, if more cities get serious about cordon pricing members of Congress may see other alternatives as more acceptable from their regional perspective.
ReplyDeleteThe 'user-pay' (tolling) is not an easy principle to sell nor is it a willing purchase. It is generally a grudge purchase. Perhaps those of us who are tasked with promoting the implementation of a grudge purchase have to engage the buyer directly? Relying on politicians, who have a vision just short of their term of office, is going to make the road user and the economy the ultimate loser.
ReplyDeleteIf you want customers (and they are not homogenous) to pay for a product or service, you must increase their willingness to pay. One way to do this is to provide a minimum level of performance, a guaranteed level of service. The technology permits you to do so, assuming providers are willing to be accountable.
ReplyDeleteWhile supporting "new" ideas in tolling, let's not lose sight of tolling being one of the "oldest" and therefore most proven ideas in transportation dating back to the Susa-Babylon highway in the 7th century BC and within the U.S. to the pre-interstate AND even pre-auto era. AND, let's look for successful applications of tolling that might be replicated and appear "new"- one example that comes to mind is the Delaware River Joint Toll Bridge Commission model of toll-supported crossings, some with tolls collected and others supported by tolls, in recognition of the combination of roadways operating as a unified transportation system.
ReplyDeleteWhat we need are new federal incentives for transportation investment that will encourage tolling without making it mandatory or highlighting it with a big neon sign that says "pay toll." Incentives that could result in states asking for looser federal restrictions would be much preferable, and more likely, than trying to impose tolling from the top-down.
ReplyDeleteThe way to do that is to include tolling as one of several criteria that would enhance applications for a competitive discretionary grant program. Other criteria could include use of Intelligent Transportation Systems, better coordination between municipalities within a given region, and use of multiple modes. We could call them "transportation innovation grants" and model them after the "race to the top" that this administration seems to view as a success in Education. States and regions that meet multiple criteria would have a better chance of receiving a grant.
Doing it this way will help to enhance innovation and encourage tolling without making anyone in Congress sign off on a new tolling program or loosening restrictions on tolls. It is a way to use federal money to incentivize transportation programs that work.
Secretary LaHood and Chairman Mica repeatedly make a key distinction when it comes to tolls on the Interstates. Both encourage tolling for new capacity (i.e., added lanes or entirely new routes) but oppose putting tolls on existing lanes. But that distinction ignores a critically important third category: tolls to reconstruct Interstate highways as they reach the end of their design lives. While this country does need additional lane capacity on some long-haul Interstates, and HOT or Express Toll Lanes on urban Interstates, by far the largest opportunity for Interstate tolling is to rebuild and modernize this aging system, as most parts of it reach or exceed 50 years of age over the next two decades.
ReplyDeleteThe possible need for tolling to finance the reconstruction of worn-out Interstates was recognized by Congress in TEA-21, when it created a three-state pilot program allowing states to use toll finance for that purpose. That program was renewed in SAFETEA-LU. Critics will argue that since no state has implemented any such projects, the pilot program was a failure. But remember that both TEA-21 and SAFETEA-LU involved large increases in federal highway funding. State DOTs would rather take the easy way out if federal funding is readily available, rather than having to make the politically more difficult case for toll finance to rebuild a key Interstate. But that was then. In 2011, we are in a no-new-funding environment, in which highways will be doing good to retain the amount of Trust Fund money typical of pre-stimulus years. In this new fiscal environment, “toll road or no road” becomes an easier sell.
Therefore, I urge the toll road community to make the case that reconstructing worn-out Interstates is not “putting tolls on existing lanes,” because those existing lanes will soon be worn out and will need to be replaced—not at the “paid-for” price of 1960 but at today’s cost of construction. The existing three-state pilot program for toll-financed Interstate reconstruction should be broadened by removing the numerical limits altogether, making this critically important financing tool available to all states. At the same time, the law’s existing criteria on use of the toll revenues must be retained. Those provisions, which restrict the revenues to Interstate reconstruction, operations, and maintenance, were painstakingly negotiated with the highway user community (i.e., the customers), and groups such as AAA and the American Trucking Associations did not oppose them in either of the last two reauthorizations. Those provisions were what prevented Pennsylvania from “erecting tollbooths on I-80” in order to use the revenues as a general transportation funding source, including bailing out the transit systems of Pittsburgh and Philadelphia. They ensure that Interstate tolling for reconstruction would be a true user fee, not an all-purpose transportation tax.
I second Bob Poole's views about making the case for using tolls to rebuild roads as they near the end of their useful lives- IBTTA members can draw on Ed Regan's article in the current issue of Tollways and information presented at past IBTTA conferences e.g. at the 2007 Transportation Finance Summit, Gery Nielsten reviewed roadway math basics- construction cost per mile of roadway in the 1950s was between $1 and 2 million and as of 2007, this had escalated to $50 million per mile. There will be costs of delay in rebuilding roads and harmful effects on the economies that rely at every level on a viable transportation system to function and grow.
ReplyDelete