'Tolls Not Gas Tax', Says Bush

Keep gas and diesel taxes stable and add new road tolls and private investment, and the road funding deficit will be solved, according to the new Bush transportation plan released July 30.

"The White House says more tolls and public-private partnerships can solve perhaps the biggest problem confronting the nation's aging infrastructure.

The administration's proposal comes as Congress gears up to start work later this year on a six-year transportation spending bill that could cost well more than $400 billion. The last multiyear bill, which expires in September 2009, carried a $286 billion tab.

Earlier this year, a bipartisan commission concluded the nation is spending only about 40% of what is needed to reduce congestion, improve safety and spur economic growth.[See related link].

Transportation Secretary Mary Peters says gas-tax rates should hold steady -- at 18.4 cents a gallon for regular gasoline and 24.4 cents a gallon for diesel, where they have stood for more than a decade -- and private money and toll revenue can address any needed increases in funding."

Thanks to Mike Keenly

Full Story: Bush Calls for New Highway Tolls



Reduce congestion?

How do tolls reduce congestion. Don't they just move it around? They will propose anything to save the wasteful autosprawl system that we pay for, and they profit from. Who are they? The carbon-auto industry.


Tolling reduces congestion by changing discretionary behavior

Tolling works to reduces congestion because it provides an incentive to either carpool (toll split 2 or three ways), or change discretionary car trips to a different time of day. only 15% of average daily traffic during the afternoon peak hours is made up of commuters. A lot of people still do not feel a marginal cost in getting in their car to shop or run errands at the same time as other people are coming home from work or school. Tolling addresses this issue on highway corridors. Tolling and smartcards in my opinion are the two best ways to equalize the imbalance between transit and driving. Tolling makes driving feel like transit because you pay by the trip, and smartcards make transit feel like driving in the sense that the cost is already paid for and all you're doing is hopping on any of a number of transit modes.

In addition tolling is the most fair and equitable way to pay for new lanes. As the tolls build up then the money can be used to expand just that corridor, meaning the money people pay goes right back into the route they take. In addition toll roads often have more money to mitigate against environmentally damage. The 73 tollroad for example as wildlife corridor tunnels built under the highway, and a sophisticated stormwater runoff catchment system that Caltrans does not have the money to build into its projects.

Tolling and Market Economics

I agree that tolling will reduce congestion. This is basic economics: if you charge more for a product, people will consume less of it.

But I am worried about "As the tolls build up then the money can be used to expand just that corridor, meaning the money people pay goes right back into the route they take."

The Bush administration, Reason Foundation, etc. want everything that people pay for roads to go back into building roads. This would obviously be an environmental disaster, since the tolls account for the direct costs of building roads but not for their environmental costs.

If you mean that the money goes back into either roads or transit in the corridor, that is much better, but I still have doubts. From the perspective of the entire metropolitan area, it makes sense to take tolls generated in the most remote suburbs and spend them on public transportation in areas where we want to concentrate smart growth - not to spend all the money from tolls generated in sprawl suburbs to build transportation to those sprawl suburbs, generating even worse sprawl.

Again, the market doesn't work in this case, because the market ignores externalities, and it is not equitable to enable the sprawl suburbanites to impose all those external costs on us and on future generations.

Charles Siegel

Tolling and equity

Hi Charles,

I've been thinking a lot about tolling. And much of my thinking has been based on Donald Shoup's High Cost of Free Parking. The model he develops for parking costs is based on Pasadena where the city got political buy-in by directing the tolls from the parking meters into an improvement district "where the tolls are collected". I think the same sort of thinking needs to go into roadway tolls. "Charge those that can pay, and spend the money on those most affected." In London the congestion zone charges where spent on the transit system, and that was a fair usage. But that was a case of zone charging not corridor charging. Funding transit improvement options for zone charging is easier. You just need to get people from outside the zone to inside the zone. Corridor charging is trickier, because you have to figure out a way to get people from all the points along a corridor to all the other points along a corridor. using transit that is difficult.

However in the case of freeway tolling, I do not agree with taking the tolls from a freeway and spending it in a totally different area. Thinking about some place like the 80 in the East Bay. If it were to be tolled they should spend the money on environmental mitigation for those living closest to the freeway, and on transit options in the corridor. But how do they do that? How do you develop transit options for everyone living in Richmond, Cerritos, Albany, Berkeley to get to all the other employment, shopping, and entertainment options throughout the corridor.

Since getting out of grad school, I've been very concerned with fairness in planning, and in getting away from "punitive" planning. I agree that the market does not account for externalities, but we've talked before about how externalities can be very tricky things to quantify. But punishing people for making rational choices based on the existing market levers is not the way to make political allies. And I think tolling is the best way to start internalizing those externalities. Tolling should not be seen as a way to charge people for driving because it is worse for the environment than taking the bus, but rather tolling should be a way of signaling to the driver the per-mile costs of their behavior. That will be the best way to start internalizing the external costs of driving. However this can be jeopardized if people see their tolls spent on projects on the other side of the region. And the rational regional planning model doesn't make as much sense to most people outside of planning circles.

Makes Sense In Limited Application

Hello, Marco.

I agree that spending tolls in the corridors where they are collected could help politically, as it does for Shoupian parking. This makes sense if we consider tolls as a limited source of transportation funding.

But imagine the possibility that I mentioned in a post yesterday: that hybrid electrics reduce gasoline use so dramatically that shift to tolls as our primary source of funding for transportation infrastructure.

If you think of it as the main source of funding, I think you have to agree that we can't limit spending to the corridor where the funds were collected. That would mean that we would have to spend the funds generated by sprawl suburbs to keep powering the expansion of sprawl suburbs; imagine that all the paid by commuters from the Central Valley of California had to be spent on transportation projects that promote more urbanization and suburbanization of the Central Valley. And it would mean that the areas that have the most efficient and cleanest transportation would have the least funding for transportation: there would never be funding to improve transportation in Manhattan, precisely because there is so little driving per capita in Manhattan.

When we think about parking policy, we can think locally, but when we think about major sources of transportation funding, I believe we have to think regionally.

Charles Siegel

Irvin Dawid's picture

"Living on Earth" on 8/1

"Living on Earth" on 8/1 interviewed the reporter, CHRISTOPHER CONKEY of this article. For script, see
"For Whom the Roads Toll"

For streaming, see

Irvin Dawid, Palo Alto, CA

Tolls Not Gas Tax

Simply tolling certain roads and, possibly, selling them off to private interests might be the best solution for the ultra-rich international elite but certainly not in the best interest of American citizens.

Perhaps, the president should pay attention to the advise of his own economic advisors.

According to Lester Brown:
'Some 2,500 economists, including eight Nobel Prize winners in economics, have endorsed the concept of tax shifts. Former Harvard economics professor N. Gregory Mankiw, [who was appointed] Chairman of the President's Council of Economic Advisors in early 2003, wrote in Fortune magazine: "Cutting income taxes while increasing gasoline taxes would lead to more rapid economic growth, less traffic congestion, safer roads, and reduced risk of global warming—all without jeopardizing long-term fiscal solvency. This may be the closest thing to a free lunch that economics has to offer."'

Everyone is looking for easy solutions to this latest "energy crisis", i.e. $4.00 gallon gasoline. When it comes to getting off oil addiction we should consider that "There will be Pain". However, we need to adopt public policies that will move us quickly to safe, clean, and renewable alternatives with the least amount of disruption and pain. Yes, there is a place for tolling but it is not an ultimate solution. Most honest economists tell us that we need to tax carbon and rebate the proceeds to help in this great energy transition. See http://www.carbontax.org/ for more information.

Tax What We Burn, Not What We Earn

Both Tolls And Gas Taxes

But note that Charles Komanoff, one of the people who runs carbontax.org, was a strong backer of NY's proposed congestion pricing, and he said explicitly that the amount we charge as a carbon tax would not be enough to eliminate traffic congestion in Manhattan, so road pricing was also needed. I suspect the same is true on many congested freeways.

I believe this will come to a head some time in the 2010s. Toyota and GM are both introducing plug-in hybrids in 2010. Because the electricity to power them will be equivalent to $1 per gallon gas, I expect most Americans will shift to them during the 2010s. At that point, gas tax revenues to build roads and transit will decline drastically, and road pricing with congestion pricing is the obvious replacement.

Charles Siegel

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