In Absence of Gas Tax Increases, States Look to Tolls

States are increasingly looking to alternative transportation revenue sources due to the failure of state and federal gas taxes to keep up with inflation and transportation needs. More states are turning toward tolling to make up the gap.

To a tax-averse public, what's worse, increasing gas taxes or tolling?

Susan Milligan of the Pew Charitable Trusts writes that "(n)obody likes to pay tolls, but raising the gas tax is even less popular", according to Patrick Sabol, an infrastructure analyst with the Brookings Metropolitan Policy Program. "At least with tolls, Sabol said, people feel they are paying directly for roads they travel, instead of paying taxes to build and maintain roads they may never use." 

Road tolls are becoming more common, not just restricted to older, East Coast turnpikes. "According to the National Conference of State Legislatures, 42 states and the District of Columbia now have some sort of tolling authority or facility," writes Milligan. There are reasons why states are resorting to tolls.

“There’s a fairness argument,” added Leonard Gilroy, director of government relations at the Reason Foundation, a libertarian think tank in Los Angeles. “If you use the roadway, you pay. If you don’t, you don’t.” [See "How Interstate Tolling Could Work"].

And don't think that once the road or bridge is paid for, the toll should go away.

Roads need constant maintenance and at some point, they just need to be rebuilt, Gilroy said. “People believe that because they poured asphalt into the ground, they’ve paid for it, and that is never true. A road is never, ever paid for,” Gilroy said. “What tolling does is take the hidden costs and make them transparent.”

Tolling becomes more politically feasible for states if "they don’t have to float an unpopular public bond issue", by delegating financing to
public-private partnerships which are growing in popularity, according to NCSL’s Jaime Rall. However, tolling and P3s, are not infallible, as the underperforming Transportation Corridor Agencies in Orange County, Calif. illustrate.

And then there was the landmark leasing of the Indiana Toll Road in 2006 that brought $3.8 billion to Indiana, touted by former Gov. Mitch Daniels as one of his greatest achievements. According to Milligan, revenues have not lived up to expectations, which could lead to Indiana taking ownership of the road.

In a related article on federal transportation funding, Mike Hancock, secretary of the Kentucky Transportation Cabinet and newly elected president of the American Association of State Highway and Transportation Officials (AASHTO), issued this proclamation:

“We’ve got to make sure Congress and the American people understand that the highway trust fund is not able to sustain itself and will not provide the funds we so desperately need to maintain and expand our transportation networks in this country,” he explained in a telephone interview with Fleet Owner.

Full Story: Tolls Fill Gas Tax Gap

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