By on May 20, 2009

Despite early indications that the Obama Administration did not want to follow the toll road policies of the previous administration, the US Department of Transportation is spending millions in federal taxpayer dollars to encourage states to impose tolls on new and existing roads. On Monday, the DOT published formal rules for states interested in applying to receive $1.5 billion in federal tax grants under the new “Transportation Investment Generating Economic Recovery” program. “TIGER discretionary funding will open up the door to many new innovative and cutting-edge transportation projects,” Transportation Secretary Ray LaHood said in a statement.

The rule published in the Federal Register gave as examples of “innovative” projects those that use “dynamic pricing” and “radio frequency identification (RFID)” tracking devices on vehicles. The notice goes on to explain that grant applicants must have “legislative authority to charge user fees or set toll rate” if the project involves tolling.

LaHood also announced last Thursday that the department would bankroll a number of toll road feasibility studies using $6 million in federal gas tax dollars under the department’s Value Pricing Program.

In the San Francisco, California Bay Area, $3.2 million would be spent to encourage tolls on State Route 237. In Washington state, $1.3 million would be spent on a study of tolling in the Puget Sound region. In Minnesota, federal taxpayers would pay $400,000 to create a study showing the benefits of imposing tolls on Interstate 94. Finally, $717,000 in federal tax dollars would be spent on a study of GPS-based per-mile tolling for trucks in New York.

The latter grant is unusual because the White House explicitly backed away from the concept of nationwide per-mile taxes when LaHood first floated the idea in February.

“I can weigh in on it and say that it is not and will not be the policy of the Obama administration,” Press Secretary Robert Gibbs said on February 20.

Prior to the White House policy statement, LaHood had been quite explicit in his support for a policy of imposing tolls on drivers with rhetoric indistinguishable from that of his predecessor, former Transportation Secretary Mary Peters. Now LaHood is once again providing vocal support for tolls. Last week he sent a signal to the New York state legislature and New York City Mayor Michael Bloomberg to revive the failed effort to impose a tax of up to $22 for cars and trucks entering downtown Manhattan. In an interview with NY1 News, LaHood promised that the $350 million in federal tax money would be available as a financial reward if the city imposes the toll.

“The money that was going to be provided for that particular project is still at the Department of Transportation,” LaHood told NY1. “If New York got its act together around that kind of opportunity, I think we would look at it.”

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28 Comments on “Obama Continues Bush Push for Toll Roads...”

  • avatar

    Tolls stink.

  • avatar

    I’m going to give my standard response to any toll road proposals:

    Tolls are an inefficient method for raising revenue. A large percentage of the toll is used to pay the overhead (salaries, infrastructure etc…) needed to collect the toll. The public pays a lot of money, the government nets very little money. The end result is that tolls become a financial drain on the public while producing very little benefits other then supplying jobs that provide no benefit to society, and maintaining roads at a far greater cost then needed.

    In conclusion, it’s a crap idea.

    Raising the gas tax (which I’m also against) at least gives the public more value for their tax dollar (so that it may be wasted elsewhere).

  • avatar

    Toll roads strike me as a more fair usage tax than GPS monitoring (and less Orwellian to boot). If done EZ-Pass style, the overhead required is minimal.

    Gas taxes are probably the most fair, at least until we see wide scale adoption of electric and PHEV vehicles.

  • avatar

    No one ever mentions the overhead cost of collecting tolls at public hearings. If you did, your microphone would probably be turned off.

    The simple truth with regards to tolling existing roads is that current fuel taxes don’t cover the cost of construction and maintaining our highways. It’s political suicide to raise the existing taxes at the pump.

    Most folks burn fewer gallons per 100 miles than they used to and that’s a trend which likely continue downward.

    Bottom line it is a rare event for a toll authority to go out of existence. Once the bureaucracy is in place, they hard to kill and the profits head directly to private investors either overseas or on Wall Street.

  • avatar
    Rod Panhard

    Here’s why this shouldn’t surprise anyone. First, we’re trying to reduce our oil consumption. So the president raises the CAFE ratings to something that the Big 3 said would bankrupt them. Now they’re bankrupt. They can’t scream for mercy.

    Increasing the EPA ratings is also government mandate to reduce tax revenue. As you know, part of the money you pay for every gallon of gas goes to tax coffers that are supposed to fund roads. Burn less gas and you spend less money. Some of that money was tax revenue.

    But if our government forces itself to reduce its revenue, it will have to make up the revenue somewhere else. They’ll call it a “user tax.”

    Everyone else will call it a “toll road.”

  • avatar

    The user pays (hard) mentality exhibited by many seems to suddenly find detractors when it comes to roads? Parallels to Health Care anybody?

  • avatar

    I wonder if it isn’t cost efficient because the tolls are so “cheap”.

    I know that in both Mexico & Brazil where I’ve traveled by car, it is not uncommon to pay 10-40x the tolls that we pay here in the US. It does seem though that in major urban areas in M/B, there AREN’T tolls. Tolls seem to be paid by people traveling between major cities.

    IMHO I’m more in favor of a gas tax, but then again — it benefits me.

    I can drop to a 250cc bike that costs nothing used (1500-2000), costs nothing to fuel (65-80mpg) and nothing to insure ($250/year full coverage?) if I need to.

    IMHO we’d have a lot more fairness in taxes if the 45% of the population that pays no fed $ paid something minimal like 1-5%

  • avatar

    Rather than new toll roads being built, expect to see current toll roads file for bankruptcy. The same over leverage financing that decimated other parts of the economy is working its way through to the (largely foreign) toll road operators.

    Indiana sold its toll road for stupid money a few years back, and the current operator is fathoms underwater. It may be one of the first to revert to state control.

  • avatar

    Any excuse to get their hand into your pocket, and any excuse to give themselves the power to attempt to control your thoughts, actions, etc.

    The bloated federal bureaucracy will fight to the death, and usurp any rights they can, to ensure their self preservation.

    Welcome to Amerika, Comrade!

  • avatar

    I’m sure I’m in the ultra-minority, but toll roads don’t bother me if they’re intelligently run and reasonably priced.

    My wife pays $0.68 each way each day to cut 15-20 minutes off her daily commute, effectively cutting it in half. Difficult to see a problem there.

  • avatar

    The overhead doesn’t necessarily have to be such a high percentage. It was on the old Indiana Toll Road, but that was because they used people as toll operators and hadn’t raised the toll in years. That actually cost more to collect than it raised. But with something like EZ-Pass the overhead isn’t so bad. And as noted, tolls do tend to be lower in the US than elsewhere also; don’t just complain about overhead as a percentage, as the easy response is just to raise the toll.

    OTOH, since switching to EZ-Pass is more convenient for drivers, it makes more people willing to pay the toll. So congestion increases. So to decrease congestion, they raise the toll.

    Raising the gas tax (which I’m also against) at least gives the public more value for their tax dollar (so that it may be wasted elsewhere).

    Tolls are not just for revenue; they also serve the purpose of reducing congestion on a particular road. Gas taxes don’t do that, at least not where it’s useful. (They decrease driving everywhere, but not more in areas with congestion.) Congestion is particularly inefficient; wasting gas idling on I-95 is worse than gas used while at least moving across a rural interstate. In order to eliminate congestion on I-95 without tolling, you would have to raise the gas tax everywhere to an unnecessarily high level.

    Complaints about tolling generally boil down to wanting someone else to pay for it, like most things. Of course, if your road is the only one being tolled, it seems (and is) quite unfair, because your taxes are subsidizing everyone else’s roads, but you’re paying for your own.

  • avatar

    I don’t understand the opposition to tolls, especially among car enthusiasts. As opposed to gasoline taxes, people in thirstier cars will pay less.

    Further, its a very fair tax on the usage of an expensive piece of infrastructure. People driving on local roads won’t pay taxes to do it, as those are funded by local governments.

    Also, we have to start to consider the unintended consequences of our free highways (paid for by the general tax revenue as opposed to by users). They have had a part in encouraging much greater suburban and rural development than we would have otherwise seen. These developments are often built on unspoiled land. People living suburban and rural lifestyles rely entirely on cars for every aspect of their day, which consumes much more energy than walking and public transportation. Free highways and suburban development encourage traffic and clogging which leads to misery and even more gasoline use.

    I’m not at all saying that we should punitively tax road users like we tax smokers, but if we even just structured tolls/gasoline taxes so that road users paid for the costs of the roads, we would see many more people living in more urbanized areas where walking, biking, and public transportation are feasible. People would prefer it over paying ~$5/day in fees/taxes in order to cover the true costs of their road use.

  • avatar

    I suppose it depends. At least in Central Florida, our toll roads are pretty decent, and oftentimes are worth the extra money. However, I have been in many places (especially up North), where the toll roads are often far worse than the worst stretches of our “free” public highways.

  • avatar

    Also, we have to start to consider the unintended consequences of our free highways (paid for by the general tax revenue as opposed to by users).

    Our free highways were entirely paid out of gas taxes until 2007. In both the 2007 highway bill, and the stimulus bill, general tax revenue was used for highway funds for the first time. I’m talking about federal money. It varies state to state for state highways how much is gas tax, and some states use state general funds.

    Basically, all the politicians were afraid of being politically attacked for raising the gas tax, but wanted to spend more on highways anyway.

  • avatar

    Gas taxes and tolls are both ways of taxing users. Tolls are for discouraging congestion on a particular road. Gas taxes are for discouraging gas consumption. Relying entire on tolls for highway money (not seriously considered) would give a free ride to people in low congested rural areas. Relying entirely on gas taxes either results in too much congestion in dense areas, and a lot of waste, or people in low density areas subsidizing extra road construction in dense areas.

    I suppose the transit fans should slightly prefer tolls. While congestion will also drive people to transit, as will tolls, congestion is worse for the environment.

  • avatar

    I just love hearing people talk about how we’re not taxed enough. Do any of you folks employ anyone? I do.

    I have a part time guy working for me. He works 24 hrs/week. He’s a programmer and is making good money, but again, it’s a part time gig. I pay the Fed gov’t $515/month in taxes for the pleasure of employing him. That is above and beyond the taxes I withhold from his paycheck and state taxes I pay as well.

    $6180 per year to the Feds in taxes, simply to employ one part time employee. On top of what he pays in with his payroll tax deduction.

    Do any of the “let’s increase the tax” crowd know how much your employer pays for you in Fed taxes? Do you look at your pay stub and understand the difference between your “salary” and what you take home?

  • avatar

    @ tuna

    Why are people opposed? Because we have to stop. Because it prohibits travel among the poor. Because tolls are inefficient due to overhead. Because tolls increase emotional angst.

  • avatar

    “In Washington state, $1.3 million would be spent on a study of tolling in the Puget Sound region.”

    The state of Washington is pretty firmly fixed in the hands of no-growthers and has been for years. The thinking has been pretty much “If we don’t build any more roads fewer people will move here.” So we have had increasing congestion on both urban streets and freeways in the Puget Sound area, because of course more people have moved here.

    The new Tacoma Narrows bridge is a better than usual use of toll money. It’s located where folks pretty much have to use it, and they have automated tolling for regular users so it’s not a pain. Also there’s a section of freeway south of Seattle that is set up so that lone drivers can use the carpool lane during commute hours by paying a toll.

    Most other bridges and freeways in this area don’t lend themselves so much to tolling, because there are more ways to drive around them. Nevertheless the local pols are rubbing their hands at the thought of being able to get more toll money, but it remains to be seen whether any of it is used to build roads.

  • avatar

    Do any of the “let’s increase the tax” crowd know how much your employer pays for you in Fed taxes? Do you look at your pay stub and understand the difference between your “salary” and what you take home?

    I certainly do. But people who agitate for more road building are the problem. Those roads do have to be paid for by some method. Most of the people complaining about tolls are just arguing over who pays for the road; few of them want to actually decrease spending. Few enough of them to matter, anyway; Americans rejected spending less on roads in the 2006 and 2008 elections.

  • avatar

    One day DMV in Tracy, CA, I saw a poster with a pie chart that showed where the licence fees go. 3% went to road repair, 3% went to CHP, the reset went into General Fund. Politicians were stealing the most of our taxes forever, and now they want toll roads.

    They want to toll 237 because people use it to avoid Dumbarton toll.

  • avatar


    Americans rejected spending less on roads in the 2006 and 2008 elections.

    The Republicans pushed through a $286B ‘Highway bill” in 2005. Do you believe that toll funds collected will be spent any more effectively than the waste that Highway bill was? What evidence do you have to support that belief?

    I would guess that most people rejected spending even more money on roads because we have no confidence that our government will spend wisely.

  • avatar

    From that reliable source called wikipedia

    an article on the Mt. Hope Bridge in RI:

    “The bridge’s toll was eventually reduced from 60 cents to 30 cents for a one-way trip. It was finally discontinued in 1998, after calculations indicated that the toll was not high enough to cover the cost of collecting it.”

    Toll booths, collectors, oversight, G&A, political hangers-on ate up everything and more.

    The only remaining toll bridge in RI has now gone to EZ-Pass. They are in trouble for whacking out of state licensed EZ-Pass users 2x what they charge in-state licensed EZ-Pass users. AFAIK, there have been no decreases in personnel from when they used tokens or cash. (Cash is still an option, but only at a small fraction of the toll lanes.)

    Make up the funding deficit with a mileage tax determined by vehicle class. Vehicle class determined by weight. Weight determines how much you should contribute to fixing road wear and tear. Gas sales tax on consumption remains as it is. No GPS. No mandatory RFIDs. No high overhead government oversight required. And most especially, no dangerous toll plazas.

  • avatar

    I’d argue that road spending, when done correctly, is by far one of the least burdensome forms of government expenditure.

    Transportation cost is a hidden tax on industry and the consumer. Our time is taxed in traffic, our fuel consumed idling, and we pay the price in additional wear and tear from our crumbling roads.

    Toll roads are supposed to create incentives to build additional capacity, but given the difficulties in securing right-aways where they’re needed, they’re rarely feasible by the private sector. In the public sector, if California is any guide, the construction of the toll road is financed by a municipal bond, and the tolls are either partially applied towards the payments or collected long after the bond is paid off, becoming another revenue stream for the state.

    Either way, they’re burdens on a public good that is best financed out of the general fund or gasoline taxes (which tend to be diverted towards the GF, anyways).

    My $.02.

  • avatar

    The Republicans pushed through a $286B ‘Highway bill” in 2005.

    The vote in the Senate was 91-4, the vote in the House was 412-8. To say that the Republicans pushed through the bill neglects to mention that the Dems were pulling from the other side.

    Of the 18.3 cents/gallon that Feds currently collect;

    2.5 cents ends up in the general fund (3.1 if the fuel is greater then 10% ethanol)
    2.86 cents for mass transit

    In the end, about 2/3 of the gas tax is returned to the highway department. And of that money…

    53% is spent on “Reduced Congestion” projects which may include new highway contruction or maintenance.

    21% is spent on “Safety”. Again, this may or may not involve new highway contruction or maintenance.

    The remaining 26% of the funds to the highway department are spent on “Global Connectivity, Environmental Stewardship, Security and Response, and Organizational Excellence”.

    By my calculations only 9.5 cents of the 18.3 cents/gallon ends up in fund that has a chance of maintaining or improving our existing highways.

  • avatar

    Do any of the “let’s increase the tax” crowd know how much your employer pays for you in Fed taxes? Do you look at your pay stub and understand the difference between your “salary” and what you take home?

    Then move somewhere that taxes aren’t an issue. You do software development, which has some of the lightest capital requirements of any industry. If you were to move to, say, Somalia, you could spend the money you otherwise spend on taxes on a private militia and a satellite link-up to the rest of the world.

    You could probably hire a few workers for pennies on the dollar and and get your goons to rough them up when they ask for more.

    This is an extreme example, of course, but the point is that taxes pay for all sorts of services. If you don’t want the services, campaign for a libertarian candidate or move, but don’t be surprised when the bulk of people who derive benefits from the social contract don’t agree with you. Heck, there are countries whose citizens pay far more than you and your employee do, and are reasonably happy to keep doing so in order to keep the levels of service they enjoy.

  • avatar

    But with something like EZ-Pass the overhead isn’t so bad.

    Wrong. Instead of talking points from the toll road industry, here are actual data on how much it costs to collect tolls, courtesy of WSDOT:
    Toll collection cost

    The answer is: it costs just about nothing to collect a fuel excise tax at the distributor level — it’s a common misconception that the collection is done at the pump. To collect the same amount of revenue with the E-ZPass infrastructure would require wasting billions.

  • avatar

    the point is that taxes pay for all sorts of services.

    Well, my question still stands – any idea of that $258B that was the Highway bill a few years ago, how much actually was spent on highway repair, retrofit or new roads?

    I don’t know either. For some reason, that info sure is hard to come by. I wonder why.

    Yet here comes another gov’t representative selling smoke and mirrors about how this time the money really will be spent on the roads. Sure.

  • avatar
    law stud

    Toll Roads are the worst thing this government can encourage. I would rather have marijuana legalized than have toll roads.

    Higher cafe and toll roads… I can’t believe those conspiracy theorists about the left wing are coming true through incremental socialism. Essentially take people out of their cars and group them into large cities where they can be controlled. Welcome to the future, the ghetto with big brother.

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