National Academies Report Demands $70 Billion In Highway Tolls, Taxes: NMA E-Newsletter #521

“This article originally appeared on TheNewspaper.com, (“Driving Politics”) and is reprinted with their kind permission.” 

Federally funded report explores the possibility of turning every mile of interstate highway into a toll road.

The National Academies of Sciences, Engineering and Medicine on Thursday released a report saying motorists ought to pay up to $70 billion in higher taxes and tolls every year. The 650 page document laid out the conventional argument of transportation officials who insist that drivers simply are not paying enough at the pump, DMV registration counters and toll booths.

Currently, about $25 billion is spent on interstate highway system improvement, with just $2.2 billion of that amount devoted to new construction. The study, funded by the Federal Highway Administration, examined the need to upgrade and repair the interstate highway system from the foundation up.

“Although proven durable, the interstate system’s roadway foundation will eventually become unserviceable, and much of it is already more than 50 years old,” the report noted.

The report also cited the need to dramatically expand highway capacity to meet growing demand, while at the same time allowing urban activists to “right-size” interstates.

“Although the system has long been considered complete in its national and interregional coverage and connectivity, shifts in the geography of the country’s population and economic activity are creating demands for the addition of new nodes and links, and in some cases for the modification or replacement of urban segments viewed as unduly intrusive to communities,” the report explained. “Transportation agencies, especially in urban areas, may substitute more active operations and demand management measures, such as congestion tolling, for spending on lane widening and other physical additions to interstate highways.”

The report highlighted the Interstate 66 high occupancy toll (HOT) lane project in Virginia as a promising example of imposing tolls on existing capacity. The document was completed before those lanes opened, but I-66 commuters making the ten-mile journey into the nation’s capital today face one-way tolls as high as $45. While “managed lanes” are often described as a congestion reduction measure, the study notes that there is no reduction in traffic backups for motorists who fail to pay those high tolls.

“Congestion must remain on the general-purpose lanes to continue to entice drivers to pay for the premium service,” the report explained.

The study explained the same reconstruction costs could paid with an increase in the current federal gas tax from 18.4 cents per gallon to 30 cents per gallon over ten years.

“A major advantage of the fuel tax is its very low administrative cost for collecting revenue — most estimates indicate collection costs are less than one percent of total revenues,” the report explained. “Fuel taxes generally encourage efficient behavior insofar as the taxes paid are generally proportional to system use.”

Option two in the study is tolling every mile of the interstate highway system.

“The revenue potential from tolling is substantial,” the report explained. “Most evidence indicates that tolls are more complicated and costly to collect than fuel taxes. Even for the toll roads that have extensive electronic tolling, Kirk reports that collection costs consume 8 to 13 percent of gross revenue.”

TheNewspaper calculated that the best-managed toll roads in the country had overhead costs of 23 percent (view figures). The National Academies study also noted that the cost of adding toll collection equipment to every existing interstate highway would be $55.5 billion. Another option considered in the report is for Congress to use more of the existing $41 billion that motorists already pay in federal gas taxes on the interstates.

“Although the existing federal funds could be sufficient for the interstates, the rest of the federal-aid highway system, many routes of which serve as important connectors to the interstates, would have to be funded by states alone — which could have broad implications for the future of the federal-aid highway system and the connectivity it provides,” the report noted.

Editor’s Note: In order to download and read the entire report, you will first have to register for a free account from the The National Academies of Sciences, Engineering and Medicine. Find the full report HERE.

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