Should We Privatize Toll Roads?

Yes: More funds would give us bigger, better highways

Atlanta has the dubious distinction of being the traffic congestion capital of the Southeast. Its annual delays per traveler are second only to Los Angeles’. And that gridlock hurts Atlanta’s competitiveness as a place to live and do business.

Atlanta’s congestion got this bad because the metro area stopped adding freeway capacity in the mid-1990s-but population and traffic kept right on growing. Meanwhile, the cost of highway construction has skyrocketed, making it harder to upgrade bottlenecked interchanges, add lanes to the most congested highways, or build new expressways in fast-growing suburbs.

Like most other rapidly-growing states, the Georgia Department of Transportation finds itself barely able to pay for repairs and maintenance on existing roadways, let alone build new ones. Federal and state gas taxes have not kept pace with either inflation or miles driven. As drivers give up gas-guzzlers for smaller cars and hybrids, the gallons of fuel sold declines-and therefore, so does the highway revenue used to fund road and transit projects.

This dismal set of facts confronts all fast-growing states. So Georgia should look closely what California, Florida, Texas, and Virginia are using: tolling and public-private partnerships. In the 20th century, tolling was simply a way to pay for a new bridge or roadway. But 21st-century tolling is different. First, it’s all-electronic, with no costly, inconvenient toll booths. Second, with variable pricing that adjusts to guarantee traffic is always moving freely at the speed limit, it becomes a powerful tool for reducing congestion.

A large-scale program to tackle Atlanta’s congestion via 21st-century tolling would produce a trifecta of benefits. First, it would pay for billions of dollars worth of new road capacity that would otherwise be unaffordable (i.e. never built). Second, variable pricing would keep the new lanes free-flowing, even at rush hours. And third, the new lanes would provide an uncongested guideway for region-wide bus rapid transit service. Fast, reliable express buses would be a new commuting alternative throughout the metro area, possibly luring people out of their cars.

What specific tolled improvements should Atlanta add? One clear priority is a network of high-occupancy toll (HOT) lanes, across whole freeway system. Some of these would be created by converting existing carpool lanes into toll lanes; the rest would require adding new lanes. In places where it is too costly to widen the freeway, elevated HOT lanes like those on Tampa’s East-West Expressway would make sense.

Another big project is the proposed downtown tunnel, to relieve the hugely congested Downtown Connector (I-75/85). A 2006 Reason Foundation study proposed this tunnel as an extension of the Georgia 400 southward, eventually all the way to I-675 (but initially as far south as I-20). A double-deck design for cars and buses only, inspired by the nearly completed French tunnel under historic Versailles, would provide three lanes in each direction and cost about $5 billion (in 2005 dollars).

Other worthy projects are a limited set of truck-only tollways (to entice big-rigs off the congested freeways by offering them large time savings in exchange for tolls) and selected new tollways in Atlanta’s fast-growing suburbs outside the Perimeter. Maryland is building such a toll road, the InterCounty Connector, to link I-95 with I-270 outside the Washington, D.C.-Capitol Beltway area.

Public-private partnerships can be used to pay for these projects. Atlanta already has a competent toll agency, but there are several reasons to enlist the private sector, using long-term lease agreements, to share the load. Mega road projects have high risks of going over budget, being completed late, and not generating enough toll revenue to meet their obligations. In other states and countries, these risks are being shifted away from taxpayers and onto private sector partners. If the road doesn’t meet traffic or revenue projections, the private company, not taxpayers, loses money. At a time when conventional highway funding is in short supply, private investment funds have $100 billion ready for U.S. roads. It is foolish not to consider this alternative.

Fixing Atlanta’s congestion problem is not hopeless-unless we stick with status quo programs and funding sources. By thinking outside the box and embracing 21st-century tolling and public-private partnerships, Atlanta can provide congestion relief and a larger and better transit system. And that will make Atlanta a better place for people to live and companies to prosper.

Robert W. Poole, Jr. is director of transportation studies at Reason Foundation, where he has advised the last four presidential administrations. An archive of his work is here. Reason’s transportation research is here. This column first appeared in the Atlanta Journal-Constitution.