New York Times discussion: You Pay the Toll. Where Should That Money Go?

[cpzilliacus]

Updated October 8, 2012 5:26 PM

You Pay the Toll. Where Should That Money Go?

It's usually some consolation when you hand over a $5 bill at the toll booth or slow down for E-ZPass: At least the money will go toward keeping this road drivable. But in some cases, that's no longer a safe assumption. In Northern Virginia, drivers on the Dulles Toll Road are paying more than half the cost of an expansion of the Metro train system. In Ohio, the director of the turnpike authority says its revenue should be used for other projects.

Should revenue from toll roads be spent on other transportation priorities, like public transit?

This discussion was proposed by Sam Staley, the associate director of the DeVoe L. Moore Center at Florida State University.

[kphoger]

My opinion is that, if the toll road authority doesn't need all that money, then they should lower the toll.  Get the funding for whatever other project by other means (taxes etc.) that are more widely spread across the populace.

[cpzilliacus]

My opinion is that, if the toll road authority doesn't need all that money, then they should lower the toll.  Get the funding for whatever other project by other means (taxes etc.) that are more widely spread across the populace.

I don't see tolls going down in most places. 

Some states (notably Virginia and Kentucky) have had a policy of de-tolling when the bonds are paid off. 

Others (such as Maryland) have partly de-tolled when the bonds are liquidated.

Apparently the New Jersey Turnpike was intended to become "free" once the bondholders were paid, but as with most other toll roads in the U.S., that did not happen.

Because of inflation (low though it may be), the cost of maintaining and improving toll roads is such that I don't see tolls ever going down.  And many of them were built in the pre-Interstate days, and such are going to need increasing amounts of money to keep the pavement and structures in a state of good repair.

More than a few states are diverting toll road revenues to subsidize mass transit operating deficits, including Maryland, Pennsylvania, New Jersey, New York and California (and probably some others).

Virginia is diverting huge amounts of Dulles Toll Road revenue to fund the construction of a Metrorail line to Dulles Airport.

[kphoger]

Because of inflation (low though it may be), the cost of maintaining and improving toll roads is such that I don't see tolls ever going down.  And many of them were built in the pre-Interstate days, and such are going to need increasing amounts of money to keep the pavement and structures in a state of good repair.

But apparently there's enough money left over to fund another program.  So why couldn't they be lowered?

[cpzilliacus]

Because of inflation (low though it may be), the cost of maintaining and improving toll roads is such that I don't see tolls ever going down.  And many of them were built in the pre-Interstate days, and such are going to need increasing amounts of money to keep the pavement and structures in a state of good repair.

But apparently there's enough money left over to fund another program.  So why couldn't they be lowered?

You mean if the diversion of toll dollars to transit subsidies was cut-off?

[kphoger]

Well, yeah.  I had suggested that the transit monies be collected from other sources, and the surplus toll money be put back in the motorists' pockets.  So, my answer to the question in the topic would be 'back in my wallet'.

[Brandon]

That money should go directly to the toll authority, and only to the toll authority.  Use it for system upgrades and expansion.  If the Metro needs money, then it can jolly well raise its own fares and live in the real world.

[NE2]

Give it back to me. I've got mine. Fuck you.

[Duke87]

Transit needs subsidy to be viable - if a subway system had to cover all of its costs through farebox recovery, the fares would be too high. So tax dollars subsidize it, the same way tax dollars subsidize roads. That said, using toll revenue to fund transit is a political cop-out since it involves raising something which is not typically referred to as a "tax" (even though that's really what it is).

Tolls are an inherently flawed way of generating revenue since you can't put a toll on every street - what you pay in tolls is in no way proportional to how much driving you do. It depends on where you go and if not properly placed and coordinated tolls will artificially divert traffic from its ideal path by encouraging people to shunpike.

The best solution to the transportation trust fund problem is the simplest one: just raise the gas tax that hasn't been raised since 1993. My ideal world would eliminate all tolls and raise gas taxes to replace the lost revenue. Whether you pay should not depend on whether you drive past some arbitrary point. Problem is, with gas prices being a hot issue now, that's politically unfeasible.

[cpzilliacus]

Transit needs subsidy to be viable - if a subway system had to cover all of its costs through farebox recovery, the fares would be too high. So tax dollars subsidize it, the same way tax dollars subsidize roads. That said, using toll revenue to fund transit is a political cop-out since it involves raising something which is not typically referred to as a "tax" (even though that's really what it is).

And transit, at least the way it is run in most of the U.S., suffers from militant and powerful labor unions, who have traditionally gotten what they want from big-city elected officials.

That means excessive wages and other compensation (compared to what persons driving for private companies get), and often work rules that drive up costs even more.  The best way to deal with the cost side is for the private sector to run transit systems with such services procured through competitive contracting.  That means that the unions can no longer bargain with elected officials.

Tolls are an inherently flawed way of generating revenue since you can't put a toll on every street - what you pay in tolls is in no way proportional to how much driving you do. It depends on where you go and if not properly placed and coordinated tolls will artificially divert traffic from its ideal path by encouraging people to shunpike.

But it appears to be politically easier to raise tolls than it is to raise other taxes to fund transit operating and capital deficits.

The best solution to the transportation trust fund problem is the simplest one: just raise the gas tax that hasn't been raised since 1993. My ideal world would eliminate all tolls and raise gas taxes to replace the lost revenue. Whether you pay should not depend on whether you drive past some arbitrary point. Problem is, with gas prices being a hot issue now, that's politically unfeasible.

Before transit gets more money from highway users (many of which are paid by drivers who drive in areas far from any transit system), the cost side of transit needs to be reformed.

[Alps]

From my discussions with area toll agencies, the toll revenue is usually (except one Particular Agency) obligated to projects that support the highway. While this is usually maintenance and improvement projects on the toll system, it can sometimes fund intersecting or parallel roadways or even alternative modes of transportation, if there is a demonstrable connection between improved operations on the toll system and the improvement being funded. As a hypothetical example, an expansion of the 7 subway to Secaucus Junction may pull more people off of the Turnpike, especially the Newark Bay Extension. If an impartial study identifies tangible benefits to operations of the Turnpike, particularly during rush hour, then the Turnpike Authority would be able to contribute funds to it.
A recent case in point was the now-dead ARC tunnel to provide parallel rail capacity. More than one area agency realized that it would be in the region's best interest in terms of mobility to get that project built, so they all pledged some funds to it, hundreds of millions of dollars each. I looked at the traffic numbers, and while it's far from compelling if I were an average toll payer wondering where my money went, there were definite reductions in traffic volumes.

[cpzilliacus]

From my discussions with area toll agencies, the toll revenue is usually (except one Particular Agency) obligated to projects that support the highway.

Keeping the pavement and structures in a state of good repair is usually a requirement of a toll road or toll agency trust indenture.

While this is usually maintenance and improvement projects on the toll system, it can sometimes fund intersecting or parallel roadways or even alternative modes of transportation, if there is a demonstrable connection between improved operations on the toll system and the improvement being funded.

I agree.

As a hypothetical example, an expansion of the 7 subway to Secaucus Junction may pull more people off of the Turnpike, especially the Newark Bay Extension. If an impartial study identifies tangible benefits to operations of the Turnpike, particularly during rush hour, then the Turnpike Authority would be able to contribute funds to it.

I would be interested in the number of vehicle trips removed from the Turnpike, not the number of person trips.

As was stated in the original NYT article, this was the sort of rationalization that was just to justify a massive increase (as in a factor of 4 or more) in Dulles Toll Road tolls in order to fund the construction of Dulles Rail (but not its operating deficits, at least not yet).  I don't think there will be that many vehicle trips diverted onto the new rail line (A.M. peak period counts (in the peak-flow direction) going back to before the very first Metrorail line opened in 1976 show that the Washington Metro, for all of its nice attributes, has never diverted vehicle trips from streets and highways leading to downtown D.C.). What the Metro has done is take trips that used to be on transit buses and put them on a very expensive train system.

Were Dulles Rail to be a success (in terms of forcing people out of their private vehicles and onto transit), then the amount of revenue collected by the toll road to pay-off the bonds secured by the toll revenues would necessarily decrease.  Seems that the more-likely result is that some trips will be priced-off the toll road and onto nearby (and inadequate) secondary roads.

A recent case in point was the now-dead ARC tunnel to provide parallel rail capacity. More than one area agency realized that it would be in the region's best interest in terms of mobility to get that project built, so they all pledged some funds to it, hundreds of millions of dollars each. I looked at the traffic numbers, and while it's far from compelling if I were an average toll payer wondering where my money went, there were definite reductions in traffic volumes.

New York and North Jersey are clearly "different" from the rest of the United States when it comes to transit's modal share. 

What I did not like about ARC were the following:

It "dead ended" next to Penn Station.  No way for Amtrak trains to use it as a relief route to get from North Jersey to Manhattan, and it did not offer the possibility of continuing east to hook up with the LIRR or turning north to connect to GCT and Metro North.

New York City (or New York State) had no "skin in the game," except via the Port Authority, even though they were apparently expecting some benefit from the project.

The project seemed to be primed for a massive increase in construction costs above and beyond what was originally estimated (this is a recurring theme of rail transit construction projects in the United States).

It was not clear (to me) that it was going to divert significant peak-period vehicle trips off of the New Jersey Turnpike, yet the Turnpike Authority was on the hook for massive payments (apparently without any upper limit) to fund much of the ARC project.

I also don't know to what extent the ARC project (or, for that matter, extending the 7 subway to Secaucus) would simply divert transit patrons off of buses that run through the Lincoln Tunnel (and the contraflow approach lanes) into the Port Authority's bus terminal.  A rail line that diverts transit trips off of bus should never be considered an automatic success story (and especially not if the rail line is touted as providing highway traffic congestion  relief).