To Repair Its Deficient Bridges, Pennsylvania Should Embrace Value-Added Tolling


To Repair Its Deficient Bridges, Pennsylvania Should Embrace Value-Added Tolling

PennDOT and public-private partnerships can fully address concerns about wasteful government spending, double taxation, and the fairness of tolling.

In late 2020, the Pennsylvania Department of Transportation (PennDOT) introduced a plan to replace or rebuild nine Interstate bridges across the state. Eight of the nine bridges are so obsolete that they need to be replaced. Some of the bridges are in urban areas, such as the I-95 Girard Point Bridge Improvement Project, while others are in more rural areas, such as the I-80 Nescopeck Creek Bridge.

PennDOT has proposed rebuilding the bridges through a 30-year public-private partnership toll concession. The basic idea is that those who will use and benefit from the bridges should be the ones paying for them.

Unfortunately, some Republicans in the General Assembly are not on board with the plan and don’t necessarily want those driving on the bridges to be the ones to pay for them. Concerning the potential toll on the I-83 South Bridge, State Sen. Mike Regan (R-York County) said, “I have heard a very loud cry,” and he didn’t mean tears of joy. “Some of the families who live in my district would not only have one, not two, but three family members who cross that bridge two times on a daily basis,” Regan told The Morning Call

The users-pay/users-benefit principle is key to effective transportation infrastructure. Customers who drive on, and benefit from, bridges should pay for them. Last month, however, a State Senate committee introduced a bill to require legislative approval for the PennDOT tolling plan. Senate Bill 382 would specifically require a concurrent resolution from the state legislature favoring a project for a public-private partnership (P3) deal with a user fee to move forward. A P3 project without a user fee could be blocked if the legislature passes a concurrent resolution to disapprove it.

In the House, State Rep. Jason Ortitay (R-South Fayette) introduced a similar measure that would prohibit tolling, absent special approval by the state legislature. 

PennDOT said this “politicizes a process designed to foster innovation and efficient public-private collaboration.”

When it comes to bridges in need of repair and modernization, there is no debate that many of Pennsylvania’s bridges are old and in poor condition. Pennsylvania ranks 46th—or 5th worst—in the country in the percentage of state bridges that are structurally deficient, according to Reason Foundation’s Annual Highway Report.  And the ranking would actually be worse if not for the recent completion of the Rapid Bridge Replacement Project.

In 2015, PennDOT entered into a public-private partnership to rebuild 557 small bridges across the commonwealth. The availability payment P3 employed more than 50 Pennsylvania-based companies. By mid-2020, all 557 bridges had been rebuilt. Prior to that deal, Pennsylvania had the highest percentage of structurally deficient bridges in the country. 

Unfortunately, the bridge replacement project did not address Interstate highway bridges. And those bridges, like the rest of the Interstate system, are aging—many are over 50 years old, and all but one of the bridges need to be replaced.

PennDOT says it needs billions of dollars for the project. But Pennsylvania already has the second-highest state gas tax rate in the country, so drivers aren’t likely to support a gas tax hike and any additional revenue requests are likely to be viewed as controversial. But if tolling is enacted thoughtfully, most of the fears of tolling opponents can be addressed and the repairs and upgrades needed can be directly paid for by the users of those bridges.

To alleviate concerns about wasteful government spending, double taxation, and fairness, PennDOT needs to adopt what my colleague Bob Poole refers to as “value-added tolling,” which is designed to protect highway users and has five key principles. 

First, tolling should begin only after the bridges have been replaced or rebuilt. Drivers are paying for a new bridge, not the existing facility. Therefore, it does not make sense for them to pay tolls during construction. In addition, construction is likely to temporarily worsen traffic conditions. 

Second, when tolling is implemented, the state should rebate state fuel taxes for miles driven on newly-tolled facilities. Much of the outrage over tolling stems from concerns about double taxation and because Pennsylvania’s drivers already pay among the highest fuel tax in the country. With the manual toll collection of the past, there was no easy way to refund gas taxes paid. However, with today’s all-electronic tolling systems, a car’s make/model and owner are known to the toll road operator. Tolling software can calculate the fuel used by knowing the vehicle’s highway fuel economy (miles per gallon) rating and the number of miles driven on the toll facilities. Multiplying that number by the state fuel tax rate calculates the rebate amount. The toll road operator could generate a computer file listing rebates monthly and send it to the motor vehicle department to process. Similar calculations and rebates are already offered to trucking fleets in New York state by the tolling service provider Bestpass. 

Third, the toll revenue paid by drivers needs to be dedicated to the bridges so they are properly maintained and upgraded. Toll diversion is a sensitive topic in the state. The state already diverts Pennsylvania Turnpike toll revenue to help pay for things such as mass transit systems in Philadelphia and Pittsburgh, which many Turnpike drivers don’t use. The General Assembly and PennDOT should pass legislation that provides statutory protection to ensure that the tolls paid by drivers on bridges are dedicated to maintaining and operating those bridges. 

Fourth, and relatedly, proper maintenance needs to be guaranteed for the life of the bridges. Pennsylvania does not have a great record when it comes to maintenance. In addition to its bridges being in poor shape, Pennsylvania ranks in the bottom third of all four pavement condition categories (rural Interstate, urban Interstate, rural arterial, urban arterial) of Reason’s Annual Highway Report.  The use of a P3 and revenue bonds could help in this regard. Bondholders insist on proper maintenance of an asset to ensure that the tolled facilities remain attractive to their toll-paying customers. Guaranteed maintenance is generally also written into and required by long-term public-private partnership contracts. 

Fifth, the state should aim to minimize the cost of toll collection. There are two costs; the first is the initial cost of the tolling gantries and equipment, which adds 5 percent to the costs of rebuilding the bridge. The second is the ongoing costs of collecting the tolls. However, all-electronic tolling, in which customers either pay with their E-ZPass prepaid account or via their smartphones, eliminates most of the biggest costs—staff for billing and collections. Some staff will still be needed for those without accounts, who are billed in the mail, but overall today’s staff needs are greatly reduced and can reduce the collection costs to close to five percent of the revenue collected. 

PennDOT points out that if the estimated $2.2 billion cost of the Interstate bridge replacement came out of its regular budget, that would prevent numerous other transportation projects across the state from being funded in the years to come. General Assembly Republicans have valid concerns about double taxation and toll diversion. But if PennDOT commits to these value-added tolling principles, the concerns about tolling can be alleviated and ensure the state has the funding needed to repair and maintain vital infrastructure.