Surface Transportation Innovations Newsletter

Surface Transportation Innovations #6

Topics include: using tolls and PPP for a major Interstate reconstruction, an impressive report on road pricing's future, Reason at the TRB Annual Meeting, and rethinking the Midstate Tollway.

In this issue:

Rebuild Milwaukee Interchange with Tolls?

Much of America’s hugely important Interstate system is nearing the end of its useful life, just as states and the federal government are facing serious budget problems. One of the most acute situations is the Marquette Interchange, where I-43 and I-94 meet in downtown Milwaukee. This critical link is beginning to crumble—but the state does not have the $1.5 billion needed to rebuild it to a more modern design.

More than a year ago, my Wisconsin colleague Kevin Soucie suggested that we study the possibility of rebuilding the Marquette using tolls and a public-private partnership. With grant funding from the Wisconsin Policy Research, Kevin and I embarked on a year-long study of this idea. With hugely valueable assistance from electronic tolling experts Daryl Fleming and Tom McDaniel of eTrans Group, we produced the policy study which you can find on our website: Our conclusion was that traffic levels were sufficient to support up to $2 billion in toll revenue bonds, and that a completely automatic ETC system like that in use since 1997on Toronto’s 407 Electronic Toll Road would work very nicely. Sensitive to highway user groups’ concern over double taxation, we built into the model a rebate of fuel taxes paid while using the interchange, so that users would be paying only tolls, not tolls plus fuel taxes.

Needless to say, the initial knee-jerk media reaction when the study was came out last month was mostly negative. Reporters got dismissive comments (but no alternative proposals) from Milwaukee’s mayor and the newly elected governor. But comments from other officials were mostly neutral. Wisconsin has a projected two-year budget shortfall of $2.8 billion. And there are numerous claims on the limited amount of state and federal highway trust fund monies. Our work demonstrated that there is capital available for this much-needed project, if only Wisconsin policymakers can think outside the box.

A more measured response came from The Daily Reporter, a construction industry publication:

This is a desperate time for transportation funding, and any idea, at this point, is better than what we have. . . . Maybe toll roads are all wrong. Maybe the idea of private consortiums managing public jobs is a mistake. Maybe the state can cut costs on the Marquette. But there’s a crumbling interchange in the heart of Milwaukee, and someone needs to find a solution. Legislators can rage against stark reality all they want, but covering their eyes to hide the problem won’t make it go away. (Dec. 19, 2002)

Download the study and take a look. And think about all the other costly Interstate rebuilding that’s going to be necessary over the next two decades.

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Outstanding Report on the Future Role of Road Pricing

One of the best transportation conferences I’ve ever attended took place in March 2001 under the auspices of the Eno Transportation Foundation. Recently, Eno published a very well-written 30-page summary of the day-long discussion involving over 40 key transportation researchers (including yours truly) and policy makers. Titled “The Role of Pricing in the Nation’s Future Transportation System,” it is well worth the $30 price. (Alas, it is not downloadable from Eno’s website, but you can find an order form there, at

What’s especially valuable about the report is the way it puts road pricing in context. There’s a good overview of the role of both pricing and public-private partnerships overseas and of institutional differences that have made these approaches difficult, thus far, to translate easily to a U.S. context. There is also a provocative chart comparing surface transportation with other networked utilities, drawing on presentations that Steve Lockwood, Gabriel Roth, and I have been giving for a number of years. And there is an insightful discussion of the role PPPs could play, and how greater use of that mechanism could bring about more and better applications of pricing.

  • I especially like the suggested steps forward-policy changes that could make road pricing more user-friendly, and hence more likely to be implemented. The four changes are:
  • Phase out all tollbooths, replacing them with electronic toll collection (ETC);
  • End double taxation-use ETC to ensure that road users pay either a fuel tax or a toll, but not both on the same roadway;
  • Expand opportunities for specialized lanes (HOT lanes, Toll truck lanes) that provide greater value in exchange for charging a toll;
  • Develop a national standard for ETC, and aim for transponders to become original equipment on all new vehicles.

Thanks to Eno for an outstanding project.

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Reason Well-Represented at TRB Annual Meeting

During the past two years, Reason’s Transportation Program has been working on two large-scale policy ideas that could be included in this year’s reauthorization of TEA-21: Toll Truckways (PS 294, released last June) and HOT Networks (forthcoming, next month). Both propose the creation of special priced lanes aimed at specific transportation market niches. The former aims to give truckers the ability to haul dramatically more freight without either endangering passenger vehicles or wrecking the pavement. And the latter would provide free-flowing guideways for express buses and vanpools as well as a congestion-relief alternative for time-sensitive drivers. Both of these ideas are on the agenda of the Transportation Research Board Annual meeting next week in Washington.

Toll truck lanes will be the topic of back-to-back TRB sessions, on Wednesday morning, January 15th, at the Shoreham Hotel. PS 294 co-author Jose Holguin-Veras will be one of the presenters in that all-morning set of discussions. That afternoon, Ken Orski and I will be presenting our HOT Networks proposal at a session on Managed Lanes at the Hilton, from 2:30 to 4 PM. If you’re in Washington for TRB, I hope to see you at these sessions.

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Could the Mid-State Tollway Rise Again?

I almost fell off my chair when I read about a new report on development in the East Bay portion of the San Francisco Bay Area last summer. It was commissioned by the 19 cities of Contra Costa County to help them plan for economic development. The report, by Strategic Economics in Berkeley, told them to forget about attracting high-tech industry to cities like Antioch, Brentwood, or Oakley in East County. Why can’t East County compete for such jobs? Lack of access to Interstate highways, explains the executive director of the Contra Costa Transportation Authority. The Contra Costa Times (August 21, 2002) news article goes on to say that East County officials hope to remedy this problem, and among the ideas is “a renewed bid for a north-south bypass . . . to link East County with I-580 and I-5 truck routes.”

That rang several bells, so I dug into my files and found the material on the long-abandoned Mid-State Tollway, one of four public-private partnership proposals from 1990 under California’s AB 680 legislation. Just as I thought, the proposed toll road would have done just that, providing a north-south link from I-580 to Brentwood, Oakley and Antioch, and eventually north all the way to I-80. But after spending three or four years and a hefty sum of money, the private consortium that had proposed the tollway threw in the towel. There was overwhelming opposition—on the grounds that the new highway would open up East County to development!

Having been burned once, it’s not likely the private sector would risk a lot of time and money on another try. But with California in its biggest budget crunch ever, about the only way such a new link could be paid for is with tolls.

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