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Trucking and Toll-Financed Interstate Reconstruction

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The trucking industry is opposing current proposals to expand the use of toll financing to reconstruct and widen aging and inadequate Interstate highways. To some observers, this appears paradoxical, since the trucking industry depends critically on the Interstates as their most important infrastructure—yet this vital infrastructure is reaching the end of its 50-year design life and will soon need replacing.

But trucking’s opposition to current tolling proposals is rational. The American Trucking Associations (ATA) rightly fear that any new Interstate tolling will turn those highways into cash cows for state DOTs, as has happened with the Pennsylvania Turnpike, the Port Authority bridges and tunnels in New York City, and a number of other legacy toll roads (mostly in the Northeast). And observe the rhetoric in some of recent tolling discussions. A headline in Connecticut last month read, “Study: State Could Rake in $62 Billion in Highway Tolls.” Similar headlines have appeared in several other states that are looking into increased use of tolling. And at a Senate Finance Committee hearing last month, David Narevsky of Mayer Brown LLP urged Interstate tolling authority for states, so they could “use the toll revenue to pay for all this badly needed infrastructure that we’re told we can’t find a way to pay for.”

It’s against this background that Reason Foundation has just released a study I’ve been working on for the past six months, “Truck-Friendly Tolls for 21st Century Interstates.” In doing the research, I engaged in considerable discussion with trucking industry contacts. Their feedback pointed me to additional sources of information, while broadening my knowledge of the things that really concern them about tolling. My hope is that what’s proposed in the study will lead to further discussion and dialogue with this critically important goods-movement industry.

The first part of the study discusses the need to replace the 20th century Interstate system with completely new pavement, additional lanes in many corridors (including dedicated truck lanes in some corridors), and replacement of numerous interchanges that are major bottlenecks for goods movement. This draws on Reason’s 2013 Interstate 2.0 study that estimated the net present value of the cost of Interstate replacement at just under $1 trillion. Next, the study compares three alternative proposals for paying for Interstate reconstruction/replacement:

A general increase in federal gas and diesel tax rates, like those currently advocated by an array of transportation and business groups, including ATA;

A new diesel-only tax, whose proceeds would be used to create a freight corridor improvement fund, as proposed several years ago by ATA;

A toll-finance program under which all lanes of each Interstate would be tolled only when each is rebuilt and modernized, with the tolls legally limited to paying only for the capital and operating cost of the replacement Interstates (i.e, as pure user fees).

The analysis faults the first two as falling far short of what is needed, leaving the user-fee toll plan as the best (or least-bad) alternative.

The study goes on from there to discuss how all-electronic tolling would work on the replacement facilities. The vision of each truck needing only a single transponder to operate nationwide, with the trucking company receiving a single monthly invoice no matter how many trucks it has or how many different Interstates they operated on—is already reality today in the 15 E-ZPass states, thanks to two ATA-endorsed service providers, Bestpass and PrePass Plus. And with national electronic tolling interoperability on the near-term horizon, the same kind of customer-friendly service will be available nationwide well before any aging Interstate is actually reconstructed via toll finance.

Further sections of the study address a number of other trucking industry concerns, such as the cost of all-electronic toll collection (far lower than they think), the need for confidentiality of routing and billing information (already available via Bestpass and PrePass Plus), predictable toll rates (standard practice in E-ZPass states), and several others.

The final section discusses what is probably the most important concern of all: how to guarantee that the 21st century tolls begin as—and remain—true user fees, rather than a cash cow for state DOTs. I have proposed that the value-added tolling principles Reason published last year be included as requirements in an expanded federal pilot program for toll-financed Interstate reconstruction. In addition, any participating state would be required to pass enabling legislation affirming its long-term compliance with those principles as a condition of using toll finance for its Interstate reconstruction and widening. I’m looking forward to serious discussions about these ideas with trucking industry leaders.

(This article first ran in the July edition of Surface Transportation Innovations)

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