Commentary

Why Truckers Should Reconsider Their Opposition to Tolling

Tolls are the best way to finance the reconstruction of Interstates and the system can be set up to be fair to truckers

Could the trucking industry eventually come to see toll-financed reconstruction and modernization of our aging Interstate highways as the best way forward?

In this column last month, I recounted the surprisingly moderate comments made by American Trucking Associations (ATA) President Bill Graves about public-private partnerships, private activity bonds, and tolling in June congressional testimony.

Recently, I put those ideas to the test, in a new Reason Foundation policy study, “Truck-Friendly Tolls for 21st Century Interstates.”

Here are some key takeaways from this research:

  • To replace all Interstate lane-miles as they exceed their 50-year design life (a $1 trillion endeavor), all users will have to pay considerably more than they currently pay in fuel taxes. For heavy trucks, the study estimates it will be nearly twice the 7.2 cents/mile they currently pay.
  • Dedicated truck lanes on key Interstate shipping routes, which the industry seriously desires, are only likely to come about via toll-financed reconstruction and widening projects like that proposed for I-70 from Kansas City to Ohio.
  • The cost of state-of-the-art all-electronic toll collection-especially for trucks-can be far lower than the trucking industry thinks. Instead of consuming 20 to 30 percent of the revenue in collection costs, it could be well below 5 percent for a nationwide trucking-specific system.
  • Rebates of fuel taxes-as envisioned in pilot projects for mileage-based user fees-for all miles driven on reconstructed toll-financed Interstates are both technically feasible and politically essential to win highway user support for such tolling.
  • State DOTs would come out way ahead even after giving those rebates, since they would be getting 14 cents per mile in truck toll revenue while giving up just 3.5 cents per mile (on average) in state fuel taxes.
  • Trucks are already using the prototype of a nationally interoperable trucks-only electronic tolling system in the 15 E-ZPass states. It provides all the features the trucking industry says it needs: a single transponder, a single consolidated monthly invoice, and complete confidentially of routing and billing information. This system can easily be expanded nationwide as more tolled Interstates are added to the system. And two ATA-certified services-Bestpass and PrePass Plus-already compete to offer these services to trucking companies.

What the trucking industry is fighting against is expansion of 20th-century tolling, like what exists on the Pennsylvania Turnpike, New Jersey Turnpike, and several other legacy tolled Interstates in the Northeast. The average cost for a heavy truck to use such corridors is a whopping 27.1 cents per mile (tolls plus fuel taxes), compared with just 7.2 cents per mile (fuel taxes) on legacy non-tolled Interstates like I-75. The reason for that very high cost is that legislators in states like Pennsylvania have turned their Interstates into cash cows for their state DOTs (and in some cases for pork-barrel “economic development” projects in their states).

When you say “tolled Interstate” to someone in the trucking industry, they hear “cash cow.” And when you read recent headlines from states like Connecticut and Rhode Island that are considering Interstate tolling, the context is once again to create a cash cow to bail out their under-funded state DOTs. A toll that pays for more than the capital and operating costs of the tolled highway goes beyond being a user fee: the excess is a tax that singles out toll road users rather than all highway users. And ATA is right to oppose any further spread of that perversion of the users-pay/users-benefit principle.

The challenge before us, then, is to reinvent tolling and highway management in a customer-friendly way for the 21st century. In previous work, I have laid out a set of principles called “value-added tolling,” aimed at achieving that reinvention. As repeated in the new trucking-oriented study, they call for the following:

  1. Tolls should be designed to cover only the capital and operating costs of the new or replacement highway (where those costs obviously include financing and return on equity investment);
  2. Tolls should replace, rather than be charged in addition to, current fuel taxes (implemented by providing fuel tax rebates for the miles driven on newly tolled segments); and,
  3. Tolling should begin only once a segment has been built or reconstructed and is opened to traffic (just as with a new bridge or express toll lanes).

For any state to go forward with toll-financed Interstate reconstruction today, it must obtain permission from the U.S. Department of Transportation, which is currently available only to the three states that hold slots in the Interstate toll-financed reconstruction pilot program. None has been able to reach political consensus on using toll finance to rebuild an aging Interstate-in significant part because of opposition from highway user groups. The three conditions above should be added to that program to protect highway users from cash-cow tolling. In addition, more than just three states should be able to participate, as long as they are willing to accept the value-added tolling principles.

At this point, the draft Senate highway reauthorization bill does not address these points. The only change it makes to the pilot program is adding a use-it-or-lose-it provision, so that a state cannot sit on its slot indefinitely without using it. That would help, but far more important would be adding highway user safeguards. That might garner the support of the American Automobile Association (AAA), and it might even lead ATA to at least not lobby against the provision.

Or maybe not.

I’m disappointed that ATA’s initial public response to the study was negative. Its news release says the study “demonstrates a continued misunderstanding of the trucking industry and intentionally overlooks real issues with tolling,” including that tolling is “less efficient” than fuel taxes and is “a way to single out and discriminate against truck traffic.” Those concerns apply to what I see going on in Connecticut and Rhode Island, but not to the customer-friendly vision of tolling presented in the study.

Robert Poole is director of transportation at Reason Foundation. This article originally appeared in Public Works Financing.

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.