Transportation Legislation: For Whom the Bells Are Tolling

by: Ryan Avent

The big obstacle to passing a new, comprehensive transportation bill is the lack of agreement over a source of financing. The traditional source of funding for federal transportation programs is the gas tax, which, as we all know, hasn’t been increased since 1993, which means its real value has fallen considerably. And, it seems to be taken as given that any new increase is unthinkable, although I’m not sure why. Of course, there are other potential funding sources out there, like, say, tolling. But:

During a discussion on the massive financing gap that is bogging down the next transport bill, Oberstar also pooh-poohed the prospects of tolling interstate highways built during the road program’s postwar heyday. Pennsylvania is currently pushing for federal approval to add tolls to an existing interstate.

“We’re not going to allow tolling of the interstate highway system,” Oberstar said. “It’s already been built and paid for.”

Built, yes. Paid for, no. The trouble with roads, you see, is that you have to repair the damn things, which requires money. And the federal government is currently raising nowhere near enough money to handle that task, let alone invest in ambitious new infrastructure projects.

But I continue to be bothered by the way in which legislators, among many others, view tolling — as a revenue-raiser and nothing more. Revenue needs aside, tolling to reduce congestion would be a very good thing. It would lead to a more efficient use of the roads we have. Congestion is annoying and wasteful, but it’s also economically costly. Tolling roads is the surest way to reduce the problem.

The lack of imagination on this issue among politicians has become extremely frustrating to me. Metro is currently faced with all sorts of difficult funding decisions. It’s cutting services and facing costly delays thanks to a backlog of capital investments, due to funding shortfalls. Meanwhile, downtown Washington during rush hour is a mess. The region’s major highways are, at almost any time, a mess. Congestion is perpetual. Tolling of central business areas and major highways could meaningfully reduce congestion while generating enough money to significantly increase and improve transit service. Politicians struggling to figure out how to fund Metro should just walk down to 14th Street near the Potomac at 5 on a Friday, or to I-270 in Maryland at basically any time. The money is sitting right there, in the form of red brake lights as far as the eye can see.

Advocation for congestion pricing instantly generates complaints about regressivity. I find this argument to be extremely short-sighted. No one would benefit more from congestion-priced streets and highways than bus riders. Bus service could be increased immediately upon adoption of a tolling regime, and trips would become much faster, much more comfortable, and much more predictable in a world with congestion pricing. With increased demand for bus services, you might even be able to reduce bus fares — perfectly justifiable given the reduction in congestion produced by a shift from driving to bus-riding.

Some very small subset of poor commuters would find themselves in a situation in which they might not be able to find a transit option to their destination and would be forced to pay the congestion toll. Even then, they’d be getting something for their money — more time to spend with family or at work thanks to reduced congestion and less dough spent on gas burnt while idling in traffic. But it’s not inconceivable that some would wind up a little worse off.

For this, we’d sink the whole enterprise? The bottom line is that ubiquitous congestion creates a significant and persistent drag on metropolitan economic performance, which impacts everyone in the metropolitan labor market. It makes businesses less efficient and consumer goods more expensive, all of which ultimately impacts things like job creation and income growth. And any other mechanism for solving these problems is likely to be costlier, less efficient, and less effective.

The issue is somewhat less clear-cut within metro areas without transit. But for the inflexibility of their transportation networks, they should face a gas tax surcharge. In their way, they’re already punishing the poor by providing such a limited set of alternatives to automobile ownership.

It just drives me nuts to watch politicians bang their heads against the wall trying to find money for transportation projects while their roads are perpetually congested. And it drives me just as nuts to watch people complain about the regressivity of a congestion toll while actual poor people who can’t afford cars end up stuck in the same congestion, inside buses that are poorly maintained and run on infrequent, unpredictable routes. These problems are easily solvable. Politicians just need to get over the paralyzing fear of asking commuters to pay even a little more for the privilege of driving.