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Reason Foundation

Finding a Better Way to Pay for Highways

Robert Poole
April 2, 2012, 5:45pm

The National Journal's Transportation Blog asks what alternatives are there to funding our nation's highways?

It's increasingly obvious that the fuel tax system of paying for highways is running out of gas. Charging for road use based on gallons consumed rather than miles driven only worked as long as everybody consumed gallons at more or less the same rate. 

The users-pay/users-benefit principle is still a sound one-after all, it's how we pay for the services of other capital-intensive network utilities: electricity, telecom, natural gas, water, etc. What's broken is the relationship between use and payment.

That's why we need to begin the shift from gallons consumed to miles driven as soon as possible-and this shift can be encouraged in the currently pending reauthorization bill. The way to do this is to reduce current federal barriers to tolling and pricing on federal-aid highways, especially the Interstates.

Ever since the Intermodal Surface Transportation Efficiency Act (ISTEA) reauthorization 20 years ago, each reauthorization bill has chipped away at what used to be a pretty thorough prohibition of tolling on federal-aid highways. But nearly all of this has been brought about via pilot programs, limited only to a modest number of states or a limited number of projects. Each of these pilot programs-Value Pricing, Express Lanes, Interstate Reconstruction via Tolling, etc.-was debated by a previous Congress, with the inclusion of various safeguards to prevent those user fees from turning into broader taxes (i.e., safeguarding the users-pay/users-benefit principle).

Consequently, the simplest near-term way to expand states' options for tolling and pricing is for Congress to remove the numerical limits on these pilot programs. Nothing new needs to be invented; all we need do is to let all states make use of these tools, rather than limiting them to a relative handful of states or projects.

A bipartisan amendment to do just that made a lot of progress in the Senate last month, jointly sponsored by Sens. Tom Carper (D-Del.), Mark Kirk (R-Ill.) and Mark Warner (D-Va.). Opposing it was an anti-tolling amendment from Sen. Kay Bailey Hutchison (R-Texas). After fierce lobbying over both amendments, both were withdrawn shortly before the voting was scheduled. Tolling and pricing advocates are now making their case to members of the House.

To be sure, expanding the tolling and pricing pilot programs will not solve the "pay-for" problem of the current bills. But it would be an important step toward enabling state Departments of Transportation (DOTs) to cope with what, at best, will be the first ever no-increase reauthorization bill since the federal program began in 1956. 


Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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