Interstate highway system should have been toll financed - an anonymous government commenter

December 28, 2009

Year's end saw a widely circulated satire trumpeting the success of the interstate highway system as an argument for government-provided health services (see link at bottom). It generated this comment from a transportation analyst who has to remain anonymous: "Apparently we are expected to think that because the Interstate Highway system is heavily used it therefore follows that Federal funding (90%) was the best way to pay for it.  There are several reasons to think otherwise.

"For starters, Congress required that nearly all of the system built with Federal funds operate toll free.  So instead of a network of tolled highways where users directly pay for the facilities we instead have "freeways" where there is little connection between the benefits to users and the cost of using the system. 

Severe congestion and underfunding of maintenance and preservation are the unsurprising result.
If highways paid for by tolls had been required in 1956 the institutional framework for toll-funded transportation infrastructure would be in place and the transition to VMT or congestion pricing would be much easier because users would already be accustomed to paying tolls.  Instead, we now have an unsustainable business model based on the gas tax and "free" highways. 

It is also pretty clear that having made the public (apparently including the author of a widely circulated  satirical piece) so accustomed to the free use of highways it is now going to be very challenging to gain public support for the needed transition to a toll-based system.  This is particularly unfortunate since not only are tolls a much better long-term mechanism for financing highways they also have the potential to greatly improve system efficiency through congestion pricing.
The attempt at satire actually reveals a mindset that helps explain one of the major reasons our transportation system is in such bad shape.  Thanks in large measure to the Interstate Highways Act of 1956 handouts from Congress are now seen as the preferred, and expected, source of highway funding rather than relying on tolls paid by users.  No local politician, state legislator or Governor is going to ask constituents to pay higher taxes if they can get Congress to foot the bill. Just look at the push to include porky transportation projects in the stimulus bills.

I didn't notice any state DOT campaigning for more tolling authority.
So to conclude, yes, construction of the Interstate Highway System was a remarkable achievement and it has produced tremendous benefits (also costs, but that's another story). 

But just because the system has been beneficial it does not follow that it was developed or managed in the optimal manner.  In fact, as our current situation shows, the Federal funding model that looked like such a good deal in 1956 is no longer workable. 

How much farther along might the states be toward a sustainable and efficiently managed highway system if the Federal Government had taken a different approach in 1956?  

We can't say with certainty, but it seems likely a toll-funded highway system would have concentrated more of the new capacity in places where there was strong demand, and spent less in places where there wasn't. 

The system would very likely be much more efficiently operated  - toll road operators don't like congestion, it reduces revenue.  And those car-loving suburbanites would probably have paid for a much larger share of the system, which might even have discouraged some sprawl that was made possible by Federal funding of freeways to the suburbs.  

Would those outcomes have been such a bad thing? 
Maybe public outrage is appropriate after all, not because roads are operated by public agencies but because the business model used to develop the system has resulted in inefficient operation and unsustainable financing.  Now that would be a good target for satire."

NOTE: Our friend Bob Poole of Reason was the recipient of this anonymous Comment and we don't know where it comes from. We initially thought it was a USDOT official but are told "Not so".

The satirical piece that provoked it is here:

TOLLROADSnews 2009-12-28

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