Value-added Tolling: A New Road to Highway Funding or Just Another Dead End?

By April 22, 2014 March 7th, 2016 Logistics, NationaLease

Our interstate highways are in desperate need of repair. Does anyone have the answer to funding?

Everyone knows our infrastructure, especially our roads and bridges, are in pretty awful shape; almost the entire 47,000 miles of interstate highway will need to be rebuilt in the next twenty years. Yet how to remedy the situation depends on who you ask. Increased state taxes, fuel surcharges, increased tolls, and value-added tolling are all suggestions; however, there is no consensus on which works best….or if any of them will solve the problem at all.

Recently, the Reason Foundation, a non-profit think tank, came out with a 21-page “policy brief” with a set of value-added tolling proposals.

Since the estimated cost to fix the interstate is close to $1 trillion, how to get there is extremely important. The Reason Foundation understands the natural inclination to disapprove of interstate tolls, from bottlenecks at toll booths to government using interstate toll revenue for reasons other than maintaining and fixing the interstate. So the proposal has the following conditions:

  • Toll revenues can only be used for the benefit of the highway system where they are collected.
  • Tolling can only begin after the designated improvements or construction are completed.
  • Vehicles would be charged only enough to cover the building, maintenance, and improvement, and rebuilding costs of the highway.
  • Eliminate highway user taxes and replace them with these tolls.
  • Increase the level of service on the road.
  • Tolls will be collected electronically and only on a per-mile use basis.

This may sound like a good idea; however, the Alliance for Toll-Free Interstates, an advocacy group including the American Trucking Association (ATA) and Truckload Carriers Association, begs to differ.

The major concerns and issues are:

  • Electronic tolling is inefficient; those who don’t sign up need to be billed separately resulting in under- or over-billing and that means increased administration, enforcement, and operational costs.
  • A wide range of businesses that depend on shipping are opposed as their costs and time to delivery would increase.
  • The Reason Foundation is basing their proposals on “rosy” assumptions; it’s optimistic to assume that tolls collected on an interstate would not go to repairing or maintaining roads not relating to the tolls.
  • Instead of reducing bureaucracy, this proposal will simply add another layer
  • People may choose to avoid paying the toll and instead divert to other roads adding to congestion and damage to those alternate routes.

It looks as though this discussion will continue; but all involved need to acknowledge that something must be done. And the sooner the better.

What do you think about this solution?

David Beaudry

About David Beaudry

David Beaudry is Director of Logistics Engineering and Consulting for NationaLease. He brings 25 years experience in surface transportation, logistics engineering, and consulting. His earlier career includes management posts with Ryder System Inc. and National Freight. He holds a Bachelor of Science degree from Central Connecticut State.

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