Using Toll Financing to Fund Highways

New technology allows us to manage traffic flow better than ever before, but we need to shift away from reliance on gas taxes, which are failing to deliver necessary revenue, a new Reason study argues.

A new Reason Foundation study examines the various methods being used to fund major new highway projects and concludes toll financing is an "important part of our transportation system" that should be utilized more frequently.

The federal gas tax (18.4 cents per gallon, 24.4 cents per gallon for diesel) has not been increased since 1993. During that time the cost of living, as measured by the consumer price index, has risen 40.4 percent, which means that the purchasing power of the gas tax has declined 29 percent. By 2009, the federal highway trust fund will be $21 billion in the red. And while the government tries to find a better way to finance much-needed new highways, your commute is going to get a lot longer.

By 2030, drivers in 30 U.S. cities will experience daily traffic delays that make their commutes 50 percent longer than they would be in free-flowing traffic conditions. Today just four cities – Los Angeles, Chicago, San Francisco, and Washington, D.C. – experience that level of congestion. A new Reason Foundation report examines the various methods being used to fund major new highway projects and concludes toll financing is an "important part of our transportation system" that should be utilized more frequently.

The study is authored by Peter Samuel, a senior fellow at Reason Foundation and editor and publisher of, and Robert Poole, director of transportation studies at Reason Foundation, a free market think tank he founded.

Full Story: The Role of Tolls in Financing 21st Century Highways (PDF, 680KB)



The Technology does more than Toll

Surely we can use this new technology much more effectively than only for tolls. We can have instant impromptu carpools, navigation to and sharing of parking spaces, more honest auto insurance payments, and accident-free cars. But mostly we need to plan for the congestion-free vehicle that is about to invade our highways. Find a letter for Reason Foundation Researcher Adrain Moore below.

Dear Mr. Moore,

Thank you for accepting the difficult task of guiding National Surface Transportation Infrastructure Financing. You appear to appreciate the importance of convenient transportation provided by a free market. Have you considered the full potential of applying electronics to provide transportation consumers with more options?

You are undoubtedly aware of Oregon’s program using GPS technology to collect 1.25 cents per mile driven when people buy fuel. This makes every road a toll road. With minor software adjustments the toll can be different depending on the lane and the time of day. (It would be polite for the device to inform the driver of differing cost options for changing lanes or changing travel times.) But you can do a lot better than this simple charging more money for little or no improvement in service.

People will buy the “toll everywhere” approach mentioned above if it comes with accident-free, congestion-free vehicles. Seth Teller, MIT faculty adviser, points out, “If cars are communicating, no one has to idle at a light for three minutes again.” Jacob Peters, University of California at Davis notes that “Active safety technology that makes cars drive closer together would easily double (road) capacity.” (from May 2007 Popular Science)

Relieving congestion on limited access highways is a relatively minor extension of the above tolling technology and the electronics in 2007 vehicles. Fully drive-by-wire stability control systems, explained in the April Scientific American, cost only $111 and will be mandatory shortly for safety. More cars have adaptive cruise control. Add those with to General Motors V2V style communications, and people will buy into cars platooning on highways.

If you would like more examples of applying electronics to transportation funding, contact me.

Mark E. Capron, PE

More Info On Toll Everywhere??

Can you provide any links with more info about Toll Everywhere technology?

The last I heard (about 6 months ago), a professor in Sydney, Australia, was saying that the technology was 90%-95% there. (see

I would be interested in studies or articles showing it is 100% there. At this point, I am just looking for info about Toll Everywhere technology, not other uses of electronics for transporation.

Charles Siegel

Links on Oregon experiment

The Oregon experiment uses GPS on the car that communicates with the gas pump. Could easily eliminate privacy issues, if it only records the product of miles x $/mile (and doesn't record the actual location).

The estimate is from

Oregon Department of Transportation website,

You might need to copy and paste these links. I just grabbed them from footnotes on my volunteer draft of a portion of a "Fossil Free by 2033 Plan."


Links Needed On Congestion Pricing - Not Oregon

Thanks, but I am actually looking for links on using similar technology for Toll Everywhere congestion pricing. That would mean tracking when people are in congested areas to charge them tolls.

In Oregon, I think they should just raise the gas tax rather than having a mileage fee. Having a mileage fee rather than a gas tax just encourages people to buy less fuel-efficient cars.

But if similar technology could be used for congestion pricing, that would be a real benefit.

Thanks for any help you can supply.

Charles Siegel

Toll Everywhere is Original

Sorry, I haven't seen anywhere that anyone else realizes we have all the technology to toll everywhere in our cellphones. (If you want to differ between lanes, you'd need a phone with vehicle navigation features.)

The Oregon technology is toll everywhere all the time. If it doesn't use GPS, it could. It can also have a clock. Software ajustments would allow for differing "fees" by time of day and road lane.

See comment above for how to resolve privacy issues.

If you would like a more complete discussion on electonics technology in general, check out You'll need to wade into the text to find the cellphone carpooling, and the parking spot pooling, and a lot of the technology component descriptions.


Toll-Everywhere Congestion Pricing Is A Good Idea

You might want to contact the professors in Sydney Australia who are working on region wide congestion pricing to share ideas with them, since they say the technology is not quite there.

Find their names at

Charles Siegel

Privacy Issues in Planning

James Pugsley, AICP
I think the toll financing mentioned in this article is a terrific idea, and will probably be a solution to many of our transportation woes. It does share a characteristic that is common to solutions proposed for many planning and other social problems, however- an erosion of privacy. To finance specific road projects with electronic tolls means that people will be identified as being in their cars at a specific place at a specific time, on a computerized record. In a larger context, think of a lot of the other problems that we face- crime control, minimizing medical costs, control of immigration, identity theft, voter fraud (if it really exists), even disaster planning- one common denominator in crafting a solution is that we have to know where people are, who they are, and what they're doing. Planners and other would-be policymakers need to either design solutions that involve no privacy concession, which I don't think is possible, or we need to convince the citizenry that the benefits outweigh the costs. Maybe the problems will get so bad that they'll do our convincing for us. I think we all need to learn to deal more effectively with privacy issues if we want the solutions we propose to be enacted. The census and the IRS function fairly effectively- maybe we should look at the way they deal with private information.

True, but...

If those roads are privately owned and operated, would that alleviate the problem of which you are speaking?

Private ownership?

The only difference I can see with private ownership is that, much like credit card companies and banks, no matter how much they guarantee that they will not, they will sell that information to every other business on the planet. But unlike credit cards, toll roads typically do not have any immediately equivalent competitors. (Other heavy-traffic public roads, maybe, but not other toll roads). The government may not always respect people's privacy, but with all due respect, I don't believe the private sector is any better.

Private owner has wrong incentives

A private owner is incentivated to maximize toll income. Electronics can be used to minimize fossil fuel use and congestion and even eliminate the need for tolls to fund more infrastructure. Because of the electronics potential, it is the wrong time to turn over transportation to the private sector.

The Oregon (pay at the pump) model need not invade privacy because it need not record where you were. You could elect what level of detail you wanted in a bill. All it needs to know at the pump is your fee. You could elect to have it record and report to you either: only the total $ at time of fueling, or only a list of how many miles in each toll rate, or (if you aren't a private person and want to see all the details) the miles at each rate with the actual locations, or the miles at each rate with location and time.

If the system doesn't toll in real time, there is no inherent privacy issue.


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