Thank you for visiting Tolling Points.  IBTTA has moved it's official blog to to the Advocacy tab at www.IBTTA.org.
Thanks,

Pat Jones
Executive Director and CEO
IBTTA
www.ibtta.org

Everybody in the Poole!

Bob Poole, the Director of Transportation Studies at the Reason Foundation and a regular speaker at our conferences, is a brilliant man, as regular readers of Reason’s Surface Transportation Newsletter know.

In the most recent edition of the Surface Transportation Newsletter, Poole examines:

What reauthorization means for tolling and PPP’s – “The rather status-quo oriented MAP-21 reauthorization bill that was signed by the President offers a few positive developments for tolling and PPPs, but fails to address the continued erosion of the users-pay/users-benefit nature of the Highway Trust Fund.”

The growing number of PPP bridges and tunnels – “From large to small, new or replacement toll bridge and tunnel projects are proliferating around the country, as state DOTs and city governments cope with diminished fuel-tax revenue.”

Whether Managed Lanes are self-supporting – In this piece, Bob does a masterful bit of sleuthing to determine that the Manage Lane project on I-95 in Miami “would be in the black in every one of the 10 years, based on the criteria used by other state DOTs,” and NOT unable to cover its costs, as the South Florida Sun-Sentinel reported.

Bob is just one of the many talented contributors to the Surface Transportation Newsletter, which is a must-read for all of us in the industry. To read the latest edition or to subscribe (it’s free!) click here.

Engineering a Solution to Highway Funding Shortfalls

When it comes to a dispassionate accounting of reality, engineers are hard to beat. That’s why this article posted on MissouriWatchdog.org caught my attention today.

It reports on a study by University of Missouri civil engineering professor Carlos Sun, finding that tolls more equitably distribute the costs to build and repair roads, since only people who use them pay the fees.

He also suggested that toll roads will actually attract drivers who want a smoother ride. “Well-maintained toll roads could capture revenue for Missouri’s economy from out-of-state truckers and travelers, even if they don’t buy gas or other products in the state,” the Watchdog quoted him as saying.

While tolls have become a hot-button issue in Missouri for politicians, the article cites another engineer, who boils the problem down to its essence:

Matt Seiler, assistant engineer in the southeast district, said his area needs nearly $1 billion for projects in the next decade, and is allocated about $600 million during that time.

“Current funding will only allow the condition of the current transportation system to get worse,” he said.

We all need to apply this kind of clear-sightedness to the issue of our nation’s transportation infrastructure.

Road to Prosperity

In a recent speech, President Barack Obama said, “If you were successful, somebody along the line gave you some help. … Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.” 

Regardless of politics, virtually every American understands that our nation’s surface transportation infrastructure is critical to our economic health and our future prosperity. The issue now is, how do we fund these critical arteries of commerce?

Showing Good Judgment on Tolling

Tolls are often erroneously labeled “taxes,” but a recent lawsuit in Massachusetts actually sought to have some of the tolls collected there deemed as illegal taxes.

The Supreme Judicial Court, however, unanimously agreed that tolls are fees, not taxes.

"Where, as here, a public authority manages an integrated system of roadways, bridges, and tunnels, and chooses to impose tolls on only some of the roadways and tunnels in an amount sufficient to support the entire integrated system, its purpose does not shift from expense reimbursement to revenue raising simply because the toll revenues exceed the cost of maintaining only the tolled portions of the integrated system," Justice Ralph Gants wrote for the court.

"Nor must every road, bridge, and tunnel in an integrated system of roadway, bridges, and tunnels be tolled to enable the tolls collected to support the expenses of the entire integrated system without being deemed taxes," he wrote.

I couldn't have put it better myself.

Public-Private Partnerships: White Knights in Dark Economic Times

While the recently signed highway bill pledges to maintain current funding levels for the next 27 months—a move funded by borrowing almost $20 billion, mainly from pensions—many states and cities are pursuing innovative public-private partnerships (PPPs) rather than follow Uncle Sam’s “borrow from Peter to pay Paul” strategy.  As a recent AP article noted, many of our nation’s roads, tunnels and bridges were constructed over 50 years ago, and the recession has left states and cities without the revenue bases—or the credit ratings—needed to  make the improvements their residents need and deserve.

Luckily, private companies (and investors) are willing to step into this financial breach—paying significant up-front fees to state and local governments, quickly financing and completing transportation improvements, and using the fees from tolls to maintain these projects. For more information on how PPPs function, check out this Reason Foundation report.  And with the recovery continuing to limp along, it’s reassuring to know that financial analysts see a stable future for toll roads as an industry here in the US. Though unfortunate that cities and states don’t share that strong financial outlook, PPPs offer a bright spot in an otherwise rather gloomy economic picture.