By on January 22, 2009

Motorists expecting change from President Barack Obama’s choice of transportation secretary will find only a slight adjustment of priorities. Former Illinois Congressman Ray LaHood (R-Peoria) appeared before Senate transportation committee colleagues yesterday to give the first glimpse at what he wants to do to with federal transportation funds after taking his place in the cabinet. “Tolling new lanes of highways is thinking outside the box,” LaHood said. “We need to think about those kinds of opportunities. If we’re going to think innovatively, those are some of the ways we’re going to have to think about these things instead of the gas tax.” LaHood referred to the federal fuel excise tax first implemented in 1932 as a “dinosaur” and repeated the claims made by former Transportation Secretary Mary Peters that traditional funding sources were not bringing in enough money (more). LaHood suggested tolling was the “innovative” alternative that the country needs to “plus up” transportation revenue. Toll roads have been in use since the Middle Ages both as a means of generating fee income and of controlling public movement. And that’s OK, apparently.


A handful of senators expressed reservations regarding the imposition of tolls on highways. Texas Senator Kay Bailey Hutchison (R) said the current emphasis on these methods was “too strong” and that the addition of toll booths on existing interstate highway lanes was not in the public interest. “Personally, I don’t think it’s a good idea,” LaHood agreed.

Former Virginia Governor Mark Warner (D) praised his state’s leadership on public-private partnership initiatives such as the Beltway High Occupancy Toll lanes. Warner said he was worried about deals where private companies were risking public money to make a corporate profit. You know, other than the Beltway toll lanes. (In that deal, an Australian company will invest less than the cost of the interest on the $1.9b project, yet pocket tolls from drivers over the next eighty years.) Alaska Senator Mark Begich (D) said more directly that he was just not a fan of tolling.

On other topics, LaHood spoke in favor of increased use of motorist funds to subsidize mass transit. LaHood emphasized his consistent record in favor of raising CAFE standards and insisted that transportation projects would move forward quickly as part of an economic stimulus package.

“We have a mandate from President Obama to get things done,” LaHood said.

LaHood received the unanimous endorsement of the committee. He will take office afgter approval by the full Senate.

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28 Comments on “So Much for Change: New DOT Sec Endorses Toll Roads...”


  • avatar
    tced2

    Are they going to lower fuel taxes if they start collecting tolls? I doubt it.
    The federal “budget” process is such a mess that it is difficult to determine if the current fuel taxes collected are actually spent on roads. I am not in favor of using these taxes for mass transportation. “Surpluses” from taxes collected on airline tickets aren’t spent totally on airport infrastructure.
    Message to representatives: If the tax raises more money than is spent on the purpose of the tax, then reduce the tax.

  • avatar
    mikeolan

    This is exactly why you don’t let anyone from Illinois run anything. I like how Chicago residents have to pay to drive on their interstate highways.

  • avatar
    rpol35

    Yeah, but will it play in Peoria?

  • avatar
    mytruth

    Tolls can work. Albeit boring on the west side of the state, the Ohio Turnpike is a well maintained “northern” road.

    Tinfoil hat time. Tolls can be used to calculate average speed and speedy drivers can be charged accordingly (if need be). More money, more money, more money.

  • avatar
    Robstar

    mikeolan> Thanks for reminding me my ipass is almost empty.

    Oh yeah and I think they recently doubled the tolls paid via ipass. You used to get a 50% discount from paying cash — not anymore!

  • avatar
    Rod Panhard

    What did everyone expect? We were promised that we’d be given change. Did you think you’d get to keep it? Of course not. You’ll have to throw it in the toll booth.

  • avatar
    trk2

    Tolls in general are a bad idea if the idea is to raise revenue because it also increases cost. For every toll road, you now have to build and maintain toll booths, pay toll workers, and usually have an entire organization separate from the state DOT.

    I hate any extra dollar I give in taxes, but I hate it more when 80 cents of that dollar goes to support the overhead used to collect the money. If additional revenue is needed for highway projects, increase the gas tax. Don’t add more people to the public payroll.

  • avatar
    Robert Schwartz

    The country is broke and concrete is not free. If we don’t impose tolls or gas taxes, we have to raise other taxes in order to repair and expand our aging highways.

    But wait it gets worse. Taxing the rich will produce no additional revenue because the stocks and bonds they rely on for their income are in the tank. Do you see where this going?

    1Kg.12:1-19 Rehoboam went to Shechem, for all Israel had come to Shechem to make him king. … Jeroboam and all the assembly of Israel came and said to Rehoboam: “Your father made our yoke heavy. Now therefore lighten the hard service of your father and his heavy yoke upon us, and we will serve you.” …

    But he forsook the counsel which the old men gave him, and took counsel with the young men who had grown up with him and stood before him. … And the young men who had grown up with him said to him: “Thus shall you speak to this people … ‘My little finger is thicker than my father’s loins. And now, whereas my father laid upon you a heavy yoke, I will add to your yoke. My father chastised you with whips, but I will chastise you with scorpions.’”

    1 Kg 12:1-19

  • avatar
    no_slushbox

    Brilliant, raise CAFE and use more toll roads.

    Raising the gas tax would be way too efficient and effective simple a way to achieve the same end.

    Obama’s horrible judgment in Cabinet posts (this jackass, tax cheating Geithner, etc.) is starting to make me worry that he will be a mindless puppet like Bush.

  • avatar
    NBK-Boston

    As I’ve written elsewhere, I think that both tolls and gas taxes should not be viewed as primary revenue sources to fully fund roads (use as much general revenue money as you need for that), but as ways to price and control the side-effects and externalities of their use. This purpose should shape how tolls and gas tax levels should be set and collected.

    Two main ways that drivers impose social costs by using roads (apart from pollution from fuel consumption — imagine drivers are in electric cars for a moment) are (a) wear-and-tear on the roads and (b) adding to congestion. Based on my limited knowledge of road engineering, I believe that light passenger cars create very little wear and tear on the roads, compared with the effects of weather and heavy trucks. If this is true, cars should not be tolled journey-by-journey to account for wear and tear. (Maybe trucks should be, though.)

    Cars do contribute to congestion, but only in congested places, and only during congested times. In New York City, the Triboro Bridge (now called the RFK bridge, I hear) is usually jam packed and slow going during rush hour, but it is a real breeze at 3:00 AM. Thus, varying tolls by the time of day, to match usual commute patterns, could help discourage excessive use of a capacity limited road during rush hour (where each additional car creates delays and costs for everyone else on the road) while not imposing senseless burdens on motorists at other times.

    Case in point: when I lived in Brooklyn and made road trips to New England (I’d be careful not to depart during busy hours), I would cross the Brooklyn Bridge to get to Manhattan, then drive up the FDR drive, and take the Willis Avenue bridge to the Bronx, where I’d then pick up the Bruckner expressway. A more logical path would have been to stay on the Brooklyn-Queens Expressway and take the Triboro Bridge to the Bronx; my way was a mile or two longer and caused me to sit at a few lights, but saved me several dollars on tolls at the Triboro. Had they let me on the Triboro for free it would have cost society nothing (I am positing virtually zero marginal wear-and-tear or congestion costs imposed by my car on the bridge at 11:00 PM) and saved me some gas and a few minutes of time, but the bridge authorities were not so thoughtful.

    Also, tolling should not worsen the problem it’s meant to solve. Toll plazas were often choke points which caused major traffic tie-ups, and they sometimes still do this. Electronic tolling helps reduce this problem greatly. I very much support the creation of pre-paid E-Z Pass accounts (e.g. walk into a gas station and pay $20 cash for an anonymous box with a $20 credit on it), where you don’t have to register your car or credit card. This would safeguard privacy.

    I see gas taxes in a similar light — tax gas to account for environmental and foreign-policy costs, and do not over-tax it simply because government wants more money. Do not under-tax it either, because then people will burn too much of it without feeling incentive to stop, or contributing to the amelioration of the problems caused by such levels of consumption.

    Seeing road tolls (and even gas taxes) as primarily a means to fund road building and upkeep is an outmoded perspective. Tolls discourage beneficial trips (i.e. trips that do not contribute to wear-and-tear or congestion, and would benefit somebody), often have significant transaction costs, and serve as a somewhat unpredictable and regressive tax. That’s why the vast majority of our roads and highways were built without plans to toll them. Gas taxes suffer from fewer of these defects, which is why we tagged them as a road-funding source since the 1950s in lieu of tolls, but similar criticisms still apply, even if less strongly.

    Quick and easy electronic tolling now levels the playing field somewhat between gas taxes and trip tolling — they are both quick and easy, and administration costs are not a great fraction of revenue. The time has come to use both methods — gas taxes and expressway tolls — to charge for externalities, and leave the funding question to the general revenue.

  • avatar
    Domestic Hearse

    Leave it to an Illinoisian to beat the toll road drum.

    Because where else in the world have toll roads been so effectively used to fund corrupt administrations, elections, and slush funds?

    Brilliant!

  • avatar

    I second what my fellow Bostonian has said.

  • avatar
    tedward

    I also think this is a bad idea, mostly because there is zero competitive pressure brought to bear on a company that tolls a road to highly or dosen’t maintain a road well enough.

    First of all, there isn’t going to be a second viable route for many major roads, not one that dosen’t cost highly in miles or time, leaving motorists next to no choice in deciding wether to use the toll route or not, regardless of price.

    Second, with the “revolving door” phenomenon still alive and well in washington DOT senior employees and congressional aides have every incentive to allow these companies too much leeway, both in writing contracts and in enforcing them, since government is no longer held directly responsible for the roads. I highly doubt that many gov. employees are going to recomend or allow a contract to be pulled due to negligent roadwork, much more likely is an industry assistance package of some sort, where they oh-so carefully provide more money in assistance than they are going to collect in salary in a few years time.

    More to the point, I fail to see how privatizing this particular industry is going to cut costs or increase efficiency. This stinks of a cheap sell-out to long-term investment groups.

  • avatar
    NBK-Boston

    Robert:

    If the stocks and bonds used by the rich for their income are “in the toilet” (i.e. worthless), then the rich are probably no longer “rich” (i.e. owners of a lot of wealth). So I see your statement, strictly speaking, as a bit of a tautology.

    More to the point, though, the rich (to the extent they still exist) still have plenty of taxable income: dividends and interest payments on long-held stocks and bonds are still taxable when paid, no matter how many points up or down the market price of the security is. Salaries for the practice of law and dentistry are still taxable as ordinary income, no matter how poorly one’s 401(k) or Roth IRA has done over the past year. We’re not all broke and unemployed yet.

    At some point we are going to have to collectively start paying more in taxes on account of all the national debt we’ve been piling up. For my part, I’d prefer a fairly progressive income tax for all funding purposes, with all other forms of taxation re-evaluated and re-set on the basis of pricing for externalities, and not operating on the basis of grabbing money simply because the government can. Example: Boston now wants to impose a “meals tax” — a sales tax increase just on restuarant meals — which has some short term appeal (the city’s revenues and state-aid allocations are way below projections, and layoffs are in the air which could bite into essential personnel; think teachers and firefighters), but I think is a fairly backwards “middle class tax.” Middle income people eat out fairly often, and would probably notice a few extra dollars on their bills; while the rich also eat out a lot, even a few more extra dollars on their bills will hardly be noticed.

    Recalibrating every tax and fee to serve as a fairly accurate externalities charge is a tall order, and it is probably impossible from a political point of view. It would probably mean the elimination of several major types of tax. But I feel that it is a useful model or ideal, and I use it as a yardstick when looking and new tax and fee proposals.

    Finally, and on a related point brought up by fellow comment-posters, I think that road-privatization deals are probably dead for now. While governments would love to get their hands of a few billion dollars in ready cash, the financing for these deals is probably no longer there, due to the same credit-market catastrophes which have hurt our economy and are making governments so revenue-hungry in the first place.

    I happen to think that these deals are usually pretty bad for the government, at least in solid, developed countries, and I’m happy to see them stopped. The only way these companies can make money on these deals is by cutting costs or raising tolls. They can engage in some union-busting which a government highway department cannot, but overall I don’t think there is much cutting one can do before road quality is hurt. They can probably raise tolls more quickly and easily than a political body can (even if their rates are subject to some contractual limit or commission review), but as I’ve stated before, raising tolls simply to extract money is exactly the wrong thing to do as a matter of social policy.

  • avatar
    jkross22

    The fact that interstate highways in Chicago are tolled reeks of corruption. Haven’t been to any other city with such a thing.

    Obama supporters:

    Where art thou?

  • avatar
    vww12

    38% of the current gasoline tax is “flexed” (diverted) away from roads, per as US DOT reports.

    The money is usually “flexed” to buses and subways.

    With the currently existing taxes on motor fuel there is plenty of cash to pay for roads, just not enough to pay for politicians’ pet projects.

  • avatar
    shaker

    Toll roads like the ones around Chicago; simply “damming up” Interstates to collect money are an ENORMOUS waste of gas, time AND money.

    Please don’t fall for it, Barack – just raise the gas tax.

  • avatar
    jkross22

    NBK-Boston,

    Do you know what percentage of money you earn is taken by taxes or “fees”? Mine is about 40%. I’m betting most people are paying that as well.

    Fuel, cell phone service, cable, clothing, sales, income, all utilities, vehicle licensing, property tax, trash collection, toll roads, city/state/fed licensing for businesses, alarm systems, etc, etc, etc.

    Those who call for additional taxes ought to think a bit more about how much they’re already paying and what they’re getting for their tax dollars. (Ex. Depending on your age, do you think you’re going to receive that money you’re paying into Soc. Sec?)

  • avatar
    RangerM

    vww12 :

    38% of the current gasoline tax is “flexed” (diverted) away from roads, per as US DOT reports.

    The money is usually “flexed” to buses and subways.

    With the currently existing taxes on motor fuel there is plenty of cash to pay for roads, just not enough to pay for politicians’ pet projects.

    Thank you, vww12 for your clarity of thinking. Your post was worth repeating.

  • avatar
    RichardD

    jkross22 and others make good points. I wonder if the defenders of toll roads here also think the “Green Lanes” tolling idea that Illinois Gov. Blagojevich came up with was also a great idea that served humanity? Because Blago mouthed all the same platitudes that can be read in comments above.

    The TRUTH is that all of these toll deals are corrupt and peddled either by crooks or those who are part of the revolving door.

    With an average overhead of 22% just to collect the tolls (see report), you’re talking real money. Skim 22% off the top of a $500 billion highway bill and you can see why the spin machine for tolls is running at full tilt.

  • avatar
    Martin Albright

    Just a minor point but Illinois is hardly the only place in the US where interstate highways are tolled. I’ve driven on Tolled portions of I-35 and I-70 in Kansas, and much of the Pennsylvania Turnpike is flagged as Interstate. For that matter, Oklahoma tolls long sections of I-44. Those aren’t the only examples but just the ones that come off the top of my head.

    Here in CO we have very few toll roads and I can’t honestly remember the last time I drove on a toll road (except for toll roads that give me something for my money, i.e. Mt Evans and Pikes Peak which are the only two roads in the US that reach the top of a 14,000′ mountain.)

    Our other toll roads are easily bypassed at least out West.

  • avatar
    vww12

    «Skim 22% off the top of a $500 billion highway bill»

    Now look here: I think if people want to invest their own money in creating tollways from scratch, and get 40-year concessions, excellent.

    What is really crooked is
    (1) to toll roadways that already exist and were already built out of our taxes, or
    (2) to ask the government to put up $500 billion and then still get a 40-yr concession.

  • avatar
    jrlombard

    Argh. This chaps me. It assumes that what is good for the goose must be good for the gander. I don’t live in a densely populated urban area like Los Angeles, Chicago, D.C. or NYC.

    And while in the EZ Pay system seems like a no-brainer in principle, what happens if you don’t want to pony up to put a box in your car? Then you’re not able to drive on the very roads that your tax dollars paid for?

    Tinfoil hat time: They’ve already shown that studies have been done using the EZ Pay boxes to check time stamps between two points to monitor traffic speeds. Sorry, but I don’t want Big Brother watching my every move. While they haven’t used this data to ticket drivers (yet), they do use it to make adjustments to patrols and enforcement. Are we sure that we want the government to have yet another way to keep tabs on all of us? As a mandatory policy just to drive on public interstates?

    Socialism is coming people, and at this rate, it’s coming fast. Apparently, all we have to do is believe in hope and change–just do what the good man tells us to do and everything will be just fine. The government will take care of everything, don’t you worry.

  • avatar
    DrivnEZ

    This coincides with the election promise to create jobs: Engineering jobs to design the booth systems, Construction workers to widen the highways leading to the booths and build the booths, Toll Collectors, staff for the rest areas, etc. This administration is going to create millions of jobs just like these.

    Oh, one more thing, there may not be much consideration to the added fuel required to wait for the toll booths to open and the added consumption to accelerate away from the booth.

  • avatar
    johnthacker

    The federal “budget” process is such a mess that it is difficult to determine if the current fuel taxes collected are actually spent on roads. I am not in favor of using these taxes for mass transportation. “Surpluses” from taxes collected on airline tickets aren’t spent totally on airport infrastructure.
    Message to representatives: If the tax raises more money than is spent on the purpose of the tax, then reduce the tax.

    You’re correct that the process is a mess. However, in the previous year the gas tax did not cover all the money spent on roads. Congress knew this going into the bill; when it became clear that the gas tax couldn’t be raised, Congress intentionally passed a transportation bill appropriating more money than would be in the Highway Trust Fund. Then, late last year, “emergency” money out of the general fund was appropriated.

    In general, yes, the gas tax has raised more money than has been spent on roads. Last year (and this year with the upcoming stimulus bill) will reverse that, however. This is indeed partially due to the gas tax not having been raised with inflation (and not having been raised in many years) and partially due to the remarkable, historic decrease in vehicle miles driven over the last year and a half. (Even when prices went down in October and November, driving still plummeted from a year ago.)

    Argh. This chaps me. It assumes that what is good for the goose must be good for the gander. I don’t live in a densely populated urban area like Los Angeles, Chicago, D.C. or NYC.

    Then tolling is actually good for you as a national strategy. Tolls only make sense in areas that are congested, where part of the point is to reduce traffic. The alternative to tolling in densely populated areas, and thus taxing congestion, is to raise money for roads with methods like the gas tax that hit people in rural areas as well. It appears to me that you’re begging for the right to help pay for urban roads.

    And while in the EZ Pay system seems like a no-brainer in principle, what happens if you don’t want to pony up to put a box in your car? Then you’re not able to drive on the very roads that your tax dollars paid for?

    Every road with tolls and a system like EZ Pass that I’ve seen has lanes that don’t require the system. It’s slower, of course, but if you’re worried about getting a speeding ticket based on the Mean Value Theorem, you don’t have that sort of electronic trail.

    Certainly not all toll road deals are created equally. But even deals that lease out existing roads don’t have to be rip offs. Indiana is doing quite well from leasing the Indiana Toll Road (which cost the state more to collect the tolls than the tolls were worth), though some people criticizing the deal couldn’t understand why it was a good deal for the state to get an upfront payment. (Money today is worth more than the same dollar amount in 40 years.)

  • avatar
    johnthacker

    Oh, one more thing, there may not be much consideration to the added fuel required to wait for the toll booths to open and the added consumption to accelerate away from the booth.

    Then you’re at least in favor of tolling on heavily congested roads, then? Tolling certainly reduces the number of people who drive a particular route. On heavily congested roads, the net fuel consumed is reduced with tolling, particularly fuel wasted by waiting in traffic.

    Of course, tolling is near pointless on roads without congestion, but in general it’s not proposed for such roads either.

  • avatar
    thoots

    Well, well, well.

    Here on the left coast tolls are all but unheard-of. Public opinion hearings bring out the pitchforks and torches.

    Meanwhile, every politician knows full well that any vote to increase the gas tax will end up with his or her beheading. And subsequent disembowelment.

    So, no gas-tax increase for decades means your state highway department isn’t even close to keeping up with inflation. And the general rise in fuel efficiency doesn’t help, either. Yet everyone screams and yells about congestion and potholes, but it’s all a whisper compared to the outrage over spending a dime on mass transit.

    Oh, well. I guess if that bridge between your house and your office falls into the river, you can JUST GO BUY YOURSELF A FREAKIN’ BOAT.

    Not that I’m in favor of tolls any more than anyone else. But I think the gist of the federal transportation dough in the future is going to be “if you can fund it with some private participation” (i.e., tolls), you’re gonna get some of it. But if you’ve got a state full of anti-toll whiners, you won’t get a dime.

    I recommend finding “work at home” employment and “shopping online.”

  • avatar
    jrlombard

    @ thoots:

    Your tone was a little droll in the post above.

    I don’t pretend to speak for everyone. But if the government wants more money, they need to justify where it’s currently being spent. And the current budget is, shall we say, “reapportioned” so often that it makes it nearly impossible for the average Joe to figure out where the money is going. I believe that politicians like this. The less justification they have to do the better.

    I’m certainly not in favor of private participation driving policy on this matter. There are plenty of case studies that have shown that it really only leads to corruption, and does little to improve the roads (Texas, Pennsylvania, Illinois). I don’t want the federal government involved in most aspects of my daily life, but there are several that I welcome: military and infrastructure being two of the those.

    You wanna raise the gas tax? Go right ahead. After you make sure that what is currently being siphoned off gets put back, and a full accounting is done of where that money is being spent.

    Side note: Should the federal government be funding mass transit? Seems to me that the state and local levels would be much more efficient at designing a system that would work for their areas….and again, as a resident of rural California, should the burdens of a mass transit system in Washington D.C. be something that I concern myself with. I ask that honestly, as I really can’t see how, but am open to hearing counter-point opinions.


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