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December 21, 2014

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Government plans to let states toll interstates to pay for reconstruction

Image

Steve Marcus

A view of Interstate-15, looking northbound, from a helicopter May 21, 2012.

The U.S. Department of Transportation on Tuesday asked Congress to end the prohibition on tolling existing interstate highways as a way of paying for their reconstruction, marking a major shift away from how the system has been funded for decades.

The proposal is part of President Barack Obama's $302 billion infrastructure bill aimed at addressing a looming shortfall in the federal Highway Trust Fund. States are currently able to toll interstates only to add lanes, but many simply don't have the funds they need to widen or rebuild the oldest sections of interstate. Neither does the federal government.

Transportation Secretary Anthony Foxx said Tuesday that the federal Highway Trust Fund is set to run out of cash in August, a scenario that would hurt most states. According to the American Road and Transportation Builders Association, a trade group, 31 states rely on federal funds for more than half their highway and bridge improvements.

McClatchy reported two years ago that three states — Missouri, North Carolina and Virginia — were considering tolls to rebuild their oldest interstates under a federal pilot program limited to three applicants. None of the states has enacted tolling on those highways, but Tuesday's proposal would grant that option to every state.

Longtime advocates of expanded tolling lauded the proposal. Pat Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association, noted that 35 states had used tolling as a "proven and effective option" for infrastructure improvements.

"We applaud the administration for taking the bold step of proposing to lift the ban on interstate tolling," Jones said.

Still, the trucking industry and motorist groups renewed their opposition Tuesday. Toll opponents argue that payment collection systems are inefficient, that they raise costs for businesses and consumers, and that they divert traffic to local roads that were never designed for large volumes of traffic.

The trucking industry and the U.S. Chamber of Commerce support increasing federal taxes on gasoline and diesel fuel, though the White House and Congress have shown little appetite for that. Bill Graves, president and CEO of the American Trucking Associations and a former Republican governor of Kansas, called the administration's plan "disappointing."

"The focus must be on real, long-term funding answers rather than repeatedly looking for the proverbial 'nickels in the couch cushions,' " Graves said.

The country's 47,000 miles of interstate highway have largely been free of tolls since the system's creation in 1956. Its construction and maintenance was funded through a per-gallon tax on gasoline. The tax was increased only three times in its history, most recently in 1993.

The 18.4 cent tax on gasoline and the 24.4 cent tax on diesel fuel were not indexed to inflation, and construction costs have soared. But taxpayers are paying for it anyway. Since 2008, Congress has had to transfer more than $50 billion into the Highway Trust Fund from general revenues to keep the fund solvent.

The current multiyear transportation bill, known as MAP-21, expires at the end of September, and unless Congress renews it, federally funded transportation projects would stop in 2015. According to the Congressional Budget Office, Congress would have to find another $100 billion in the next six years just to maintain spending at current levels.

"Everybody is terrified about talking about how to pay for it," said Joshua Schank, president and CEO of the Eno Center for Transportation, a Washington policy group.

Only half the funding for Obama's four-year plan, about $150 billion, would come from existing tax revenues. A one-time windfall generated by a corporate tax overhaul would generate the balance. But state transportation departments would prefer a long-term fix.

In a study last year, the libertarian Reason Foundation pegged the cost of widening and reconstructing the interstate system at $1 trillion, and it advocated tolling as the best way to raise the funds.

Opponents note that every attempt to use the pilot program to toll existing interstates has not succeeded.

"The option for states to place tolls on existing interstate capacity has existed for 23 years, and not a single state has used tolls in this way," said Hayes Framme, a spokesman for the Alliance for Toll-Free Interstates, a business coalition.

But states also may have exhausted their alternatives. They've raised their own taxes and fees for transportation projects, but it won't be enough to cover the loss of federal funds.

"We've never been in this circumstance before," Schank said.

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