New toll on interstates proposed to fill gaping $-hole in feds' highway trust fund

August 25, 2011

Longtime Washington DC congressional staffer, now transport policy specialist and DC lobbyist Jack Schenendorf has his name on an innovative new proposal for filling the gaping hole in the federal Highway Trust Fund - interstate tolls dedicated to rebuilding, modernizing and extending the interstate highway system.

This interesting proposal is published in a paper for the Bureau of National Affairs, which despite its government sounding title is actually a private publisher - in Washington DC.

Schenendorf and his coauthor Elizabeth Bell call theirs a proposal for a Federal Interstate User Fee (FIUF) and a Federal Motor Carrier User Fee (FMCUF). Translated from capitolhillish into english these are interstate car tolls and  truck tolls but let's just name them here after their principal author: the Jack Toll.

fyuffs, effemcuffs, and simple li'l uffs

The term 'user fee' (UF) is one of those fuzzy political words beloved of politicians and bureaucrats. It is a fee on users of roads - on motorists. A drivers license or a vehicle registration charge is clearly a UF. Other UFs are sales taxes on cars, parking charges, and taxes on gasoline and diesel, as well as tolls.

A toll is more precisely a fee-for-use or a use fee. It is paid for the use of the road via toll points along the way or via trips computed from the beginning and end points of each trip.

The Jack Toll is clearly a toll.

Schenendorf & Bell: "The FIUF would impose a use-based fee on all interstate highway users. This fee would be collected through a system like E-ZPass that would detect entry onto and exit from interstate highways."

It is envisaged as all-electronic using standardized transponders and readers located, 407ETR style, at "at highway on- and off-ramps."

(In fact trips can equally readily be computed in the back office by collating readings at progressive points down the mainline from mainline gantries as is more commonly done in US - for example on the Illinois Tollways, on e470 Denver, Miami, and Dallas TX. Highway on- and -off ramps are rather more difficult locations for all-electronic tolling and make for more dispersed data collection than mainline points - editor.)

The Jack Toll would aim at being an all-transponder system with mandated factory-installed transponders or retrofits, no license plate reading needed:  "No tollbooths or other major structures would be constructed in order to collect the user fee. Rather, the system would be completely electronic. Standardized transponders could be included on newly manufactured vehicles and retrofitted to older models."

Tolls would be set to cover costs of modernization and expansion of interstate highways where that was needed. A vehicle classification systems would allow tolls (sorry, 'fees') to be set to distribute the charges for maintenance and repair associated with different classes of vehicles. Toll rates could vary by region to reflect regional cost differentials.

"Fees (tolls) would be set at the level necessary to reimburse states for the federal share of the costs of restoring the Interstate Highway System to a state of good repair and the costs of expanding and modernizing the system, including projects for the improvement of international points of entry and exit.

"Personal and commercial travelers would pay for use of the interstate system in proportion to the costs associated with that use while maintaining the current allocation of highway cost responsibility.

"In addition, fees could be set at rates that differ by geographic areas to account for costs associated with repair and modernization."

Against congestion pricing

And the Jack Tolls could be higher in congested areas than uncongested, though they would not be designed to manage traffic:

"For example, the fee (toll) on less-congested portions of the interstate might be less than the fee on highly-congested portions. The fees would not be designed to control the level of traffic or to 'price out' drivers from using the interstate.

The Jack Toll's FIUF would become the major funding source for the interstates. Gas taxes, diesel fuel taxes and other existing federal revenues would be used outside the interstates - for example on the non-interstate portions of the so-called National Highway System, some of which is full expressway but much of which is signalized arterial.

Effemcuffs or truck tolls too

The Jack Toll would in addition to the FIUF (car tolls) draw on what they FMCUF ('effemcuffs'?) or truck tolls. Capitolhillish doesn't run to the simple english words 'truck toll' but that's exactly what the Federal Motor Carrier User Fee would be. Effemcuffs or truck tolls would be levied based on GPS units already incorporated into most trucks for fleet management. They would be charged on total travel by trucks - on local roads as well as the interstates.

Effemcuffs would be a vehicle-miles-traveled or truck-VMT charge.

Going into a separate sub-account of the Highway Trust Fund the effemcuff monies would be focussed on routes of special interest to truckers - facilities representing bottlenecks to trucks and in special need of truck-related improvements.

Jack Tolls would be set by an independent federal entity in line with principles established by Congress. This toll setting body would comprise "experts, including stakeholders such as representatives from the motor carrier industry, passenger vehicle groups like AAA, and state highway departments."

Tolls would be periodically adjusted to provide the revenue to reimburse the states for their costs.

The toll setters would be "transparent" and report publicly on their reasons for the toll changes ordered.

The Jack Toll setter could also, according to the authors, recommend projects to be funded.

Advantages of the Jack Tolls are listed as:

- a true use fee as opposed to taxing related fuel and vehicles

- relatively easy to implement given structures at entries and exits

- a national investment policy

- free up existing gas/diesel tax revenues for sub-interstate roads

- a step toward post gas-tax financing

- minimal driver privacy issues given the wide acceptance of E-ZPass and other transponder-based toll systems

- politically feasible and fair because the proceeds are dedicated to directly benefitting users who know where their money is going

- raise revenues without adding to federal debt

COMMENTS: We asked Jack Schenendorf what he thinks of our number one federal move: ending federal restrictions on tolling interstates, and giving states the prime responsibility for setting priorities and deciding on highway funding. He's opposed. He says this will lead to what he calls a 'balkanized' system.

A true federal-power guy, Schenendorf doesn't think states can cooperate where they need with one another in setting priorities and in planning. He'd continue to have the state DOTs do the detailed design and operate the roads but according to national plans and national funding.

We obviously don't favor this proposal, preferring to devolve power and responsibility away from the federal government, making the highway system far more decentralized and locally responsive.

But for those who want a continued strong federal role the Jack Toll is an important and innovative proposal. It has way more viability than suggestions that the federal gas tax be increased or that new debt be incurred through a fannie-mae style infrastructure bank.

And perhaps it offers a way of bridging the gap between Democrats and Republicans in the US Congress.

We think it inadvisable politically, and unnecessary, to require everyone to have a standard transponder. That would provide a rallying point for opposition groups citing 'civil liberties' abuse.

The authors oppose congestion pricing, but don't explain why.

Still any personal reservations aside, the Jack Toll is a very important proposal.

It deserves way more attention than it has so far received.

BACKGROUND: Jack Schenendorf was a staffer on the US House transportation committee for 25 years through 2001 when he joined Covington & Burling, a Washington DC law firm. He has been prominent in policy discussion, for example being vice-chairman of the National Surface Transportation Policy and Revenue Study Commission. His coauthor here Elizabeth Bell described as an associate at Covington & Burling has to be suspected of doing the real work on this.

Copy of the Schenendorf & Bell paper:

TOLLROADSnews 2011-08-24

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