An Interstate Highway System for the 21st Century

Tolling, public-private partnerships in the equation

The New Year will bring many celebrations of the 50th anniversary of the Interstate highway system. As a major contributor to both personal and freight mobility, it’s well worth celebrating. But it’s also worth having a serious national debate on what we should do next.

I share the growing concern that the federal funding system created to build the Interstates has outlived its usefulness. Thoughtful commentators like Tom Downs and Ken Orski have argued that once the program achieved its original objective of building the system, it has “lost its unifying national purpose” and “become a vast program of local public works” enmeshed in pork-barrel highway spending and diversion of large fractions of highway users’ funds to non-highway purposes. There is also growing evidence from econometric studies that the rate of return on new capital investment in the highway system has steadily declined over the past 40 years, and has now reached the single-digit range.

That last point is ironic, at a time when the nation’s highway system is woefully short of capacity, especially in urban areas. A huge imbalance of supply with demand is responsible for the $63 billion per year that individual motorists lose in wasted time and fuel, just in urban areas. And that number, from the Texas Transportation Institute, does not include the cost to goods movement (either local or long-haul) or to regional economies and economic productivity. Evidently, the heavily politicized status-quo funding system is directing the scores of billions in highway capital spending into low-productivity uses.

That, broadly speaking, is why I’m so enthusiastic about the role that tolling and public-private partnerships can play in 21st-century highways. Clearly, if we can carve out a large role for new highway investment that’s directed by return-on-investment rather than by politics, Americans’ mobility will benefit.

But how should these concepts be applied to the Interstate system, specifically? One position that’s been advanced by conservatives is that the entire federal program did its original job and has been so transformed into public works and social engineering that the whole thing should be scrapped, with all highway responsibilities devolved to the states (which, after all, are the owners of all the highways in question).

While I’ve been generally in favor of devolution, when it comes to the Interstate system I think the case for continued federal involvement is stronger than most devolutionists will admit-for two reasons.

First, contrary to just about all the rhetoric we’ll hear in anniversary celebrations, the Interstate system is not “finished.” What is completed is a map of routes created in the early 1950s, based on what America looked like then. While those routes have certainly shaped travel and goods-movement patterns, they have left unmet a great many needs for direct, high-speed routes to and from places that were hick towns then but which are major metro areas today. For example, there is no Interstate route between Las Vegas and Phoenix. The large growth of NAFTA trade has created the need for more Interstate-quality north-south routes. And the huge growth in international trade means our global seaports and major cargo hubs need better truck access, on a scale never imagined at the time the Interstate system was planned.

Second, the Interstate system is as integral a part of interstate commerce as anything can be. And facilitating interstate commerce is a power the Constitution gives to the federal government. It is not just California that benefits from the massive trade flows through the ports of Los Angeles and Long Beach. The entire country does, and I have no problem with the feds making sure that this commerce can continue to flow, thanks to adequate infrastructure capacity.

This country faces an enormous challenge in coming decades, with truck vehicle miles traveled projected to increase 70% between 2000 and 2020-just 15 years from now. We are clearly going to need a lot more highway capacity to handle this increase, and it would also be hugely beneficial if the system could handle bigger truck payloads so that the growing volume of freight didn’t need as many total vehicles to handle it. But it’s also glaringly obvious that current fuel tax programs can’t begin to provide the hundreds of billions of dollars that will be needed to build this new capacity.

The trucking industry rightly fears any moves to “erect toll booths on the Interstates,” i.e., turning the existing lanes into a cash cow (at best) for other highways or (at worst) for general governmental purposes. But there are real opportunities for win-win solutions: using toll finance and public-private partnerships to add new truck-only capacity to key portions of the Interstate system, and to build entirely new links in the system. The trucking industry is interested in value-added tolling opportunities such as congestion-beating truck-only toll lanes to bypass Atlanta and triple-trailer toll truckways between the LA ports and the inland distribution centers. There are also intriguing possibilities for long-haul toll truckways involving multiple states; indeed, the truly promising corridors are nearly all multi-state.

For all these reasons, a continued federal role in a 21st-century Interstate system will be essential. But so will a major role for tolling and public-private partnerships.

Robert W. Poole Jr. is director of transportation studies and founder of the Reason Foundation.

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.


Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.