Cheap Thoughts: funding highways through tolls

My friend Billy posed a question the other day that got me thinking. I was surprised at how such a simple question could set off an hour’s worth of pondering. His question was this: would you be willing to trade the federal taxes on gasoline in exchange for paying tolls on every interstate highway?

My first reaction was to think well, who would want to pay tolls all the time? Then I thought, wait a minute – why should everyone play for highway construction and maintenance if only some drivers use it? This led to me to conclude that if highways all had tolls, drivers would be encouraged to make more local trips.

Since the opening of the I-540 Outer Loop around Raleigh I’ve been thinking about the problem of sprawl. Traffic engineers will tell you that new roads don’t solve traffic problems: they just shift it to another place. And it’s true. If 50,000 vehicles get on a highway all 50,000 are going to get off somewhere. The traffic jam is simply shifted. The Outer Loop caught my attention because its opening encouraged lots of development where there was none before, causing sprawl and stretching the limits of vital city services.

But what if Billy’s idea of funding highways was in effect? What if tolls were the law of the land? Those that benefited from the highway would be the ones who supported it. Not only that, but the highway would be built when demand for it was sufficient to support it. Currently, roads are the tail that wags the development dog. If interstates were funded by tolls they would not get built far in advance of development but would be built in response to the need. This seems a more equitable way of planning.

But back to how tolls would affect driving patterns. If drivers were paying the true cost of an interstate by means of a toll, many would naturally look for alternative routes. Now there is no connection between the taxes paid at the pump and the kind of driving that that gasoline is used for. One pays per gallon and no one cares whether it’s a long-range gallon or a local gallon. A toll would ensure the costs of those trips are connected.

Now, some might argue that highway driving is more efficient than city driving, and such a proposal would therefore be bad for the environment by encouraging less efficient urban driving. While cars do drive more efficiently at highway speeds, I think the current funding encourages more miles to be driven than would otherwise be required. One also must add the cost of urban sprawl to this equation.

What about alternative-fuel vehicles that don’t pay state and federal fuel taxes? A few years ago, North Carolina agents fined RV owners at Charlotte’s Lowe’s Motor Speedway for having biodiesel in their tanks. The way things are set up now, governments have zero incentive to encourage alternative-fuel vehicles because such vehicles cut into their road funds. Maybe a road-use tax is a better way to go. All vehicles, whether fueled by gas, diesel, solar, or electric, will pay the same price. (North Carolina, along with four other states, has since exempted biodiesel users from fuel-tax enforcement.)

Some truckers complained that a toll-based means of funding would hurt the trucking industry. Then again, trucks burn a lot of diesel fuel. That fuel-tax savings would go a long way to balancing any toll burden, I would think.

Crazy idea? Perhaps, but one that could solve a lot of transportation and planning problems over time.