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Answering Populist Critiques of Tolling and P3s

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(Editor’s Note: As Virginia increasingly turns to toll lanes to improve major transportation arteries, pushback has come from both the political right and left. Virginia is not alone in this, and here Mr. Feigenbaum reviews those critiques … and answers them.)

The rise of Donald Trump and Bernie Sanders shows the strength of populism, both left and right, in the United States. One thing these two political movements agree on is that tolling is somehow a bad policy. Unmoved by economic arguments, engineering studies, or common sense, these groups are trying (and in some case succeeding) to kill managed lane and P3 projects. Faced with unsupported claims from both extremes, most engineers and planners can relate to the Stealers Wheel song from the 1970s: “Stuck in the Middle With You.”

Texas is one of the centers of right-wing anti-toll populism. The past two legislative sessions have featured a flurry of anti-toll, anti-P3 bills. In 2017, the Texas House defeated Bill 2861 that would have allowed TxDOT to partner with the private sector to build, renovate or widen nearly 20 highways. In November 2017, Governor Abbott and Lieutenant Governor Patrick argued successfully for a freeze on new toll highways. Representatives have even authored bills that would remove tolls from every highway in the state. (TxDOT has calculated that removing tolls would cost $36.7 billion, to pay off existing toll revenue bonds, more than the agency’s entire budget for 3 years). A pending 2019 bill would require voter approval of all new toll projects. In response to the furor, the Texas Republican party switched from having a pro-toll platform to an anti-toll platform.

Maryland DOT’s plan to add variably-priced toll lanes, procured as P3s, to I-270 and I-495 outside the nation’s capital, has been opposed by left-wing anti-toll populists. The significant congestion and safety problems with these Interstates are irrelevant to project opponents. Thirteen bills have been introduced in the Maryland Legislature to hobble or kill the projects.

Despite being from opposite ends of the political spectrum, the anti-tolling arguments can be remarkably similar. One of the most common is that since motorists pay gas taxes, adding tolls is double taxation. Yet in many states, the gas tax does not pay the full cost to build, maintain and operate highways. Neither the Maryland nor the Texas gas taxes have been altered significantly in 25 years. Inflation and increased vehicle fuel efficiency have eroded the purchasing power of the tax, causing its revenue to decline in real terms by 50 percent.

A related argument is that tolling is not a “fair” way to pay for roadways. In fact, tolling is based on the same users-pay/users-benefit principle as the gas tax. But unlike in Texas where 25 percent of the gas tax is dedicated to education and Maryland where gas tax revenue has been diverted to the general fund, tolling is dedicated to transportation improvements. Additionally, unlike the gas tax, whose revenues are spent statewide, tolls are dedicated to specific projects. And variable tolling is a powerful tool for reducing congestion.

Some call toll lanes “Lexus lanes.” Yet the five most common vehicles using express toll lanes are the Ford F-150, Honda Accord, Honda Civic, Toyota Camry and Toyota Corolla. None are luxury cars. In fact, a recent study of Virginia toll lanes showed that there is a higher percentage of luxury vehicles in the general purpose lanes than in the toll lanes, meaning wealthy customers are less likely to use toll lanes than the general population. Motorists choose toll lanes for urgent trips, such as when running late for a business meeting, a plane flight, a doctor’s appointment, or picking up a child from daycare. Average monthly bills are less than $20. That same $20 buys only 6 gallons of gasoline, less than 1/3 of a tank for most vehicles.

Another common gripe is that tolls are state-imposed solutions and that local governments should have control over these highways. In reality, there are different types of roadways. Major highways–designed to move people and vehicles quickly across the state or throughout a large metro area–are the state DOT’s responsibility. Other roads that provide access to neighborhoods and local businesses are the local government’s responsibility. Local management of state roads would inhibit commerce, slow down travel, and increase freight costs.

Some residents oppose toll lanes or toll roads due to eminent domain concerns. No entity (public or private) wants to take residents’ property. It is expensive, legally challenging, and creates negative publicity. States are required to offer just compensation, although that may be cold consolation to those who have lived in that property their entire life. But the reality is that growing metro areas need additional roadway capacity and while a few people are displaced, thousands more benefit from the project.

Environmentalists’ main concern is increased greenhouse gas emissions. Yet emissions follow a U-shaped curve. They are greatest at low speeds and high speeds, but much lower in between. Increasing travel speeds in a congested corridor to 45-55 mph, as express toll lanes do, will actually reduce emissions compared with traffic operating in stop and go conditions.

Left populists complain that the express toll lanes are not a transit solution. But those lanes serve as an uncongested guideway offering reliable trip times for express buses, too. One reason people do not take transit is the travel speed. If commuters must sit in traffic, they would prefer to be stuck in their own vehicles. But transit on express toll lanes that runs largely at 55 mph has proven very popular in Los Angeles, Miami, Texas, and the Washington DC area. Transit agencies have added express bus service and some residents have switched from driving to riding the bus In the Washington region, the biggest transit gap is suburb to suburb. The express lanes could fill that gap far more effectively than a new rail line to downtown DC.

Other concerns relate specifically to P3s. Right populists complain about international companies investing and profiting from toll roads. In reality, these private concessionaires don’t own the roads; they lease them. All P3s operate under concession agreements that the state can cancel if the concessionaire fails to honor the agreement. The concessionaire takes the risk; if traffic fails to meet its forecast and toll revenue is below expectations, the concessionaire–not the taxpayers–loses money. P3 concessions that went bankrupt during the Great Recession were a victory for taxpayers. Taxpayers got a brand new highway without having to pay for it. The way to increase the number of American companies operating in this space is to build additional P3 projects, not restrict them.

This column originally appeared in the March 2019 edition of Surface Transportation Newsletter.

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