Tolling U.S. Highways

Summary

The failure of federal highway user taxes and fees to provide sufficient revenues to support even baseline surface transportation spending levels has encouraged Congress to consider expanded toll financing. Congress has cautiously encouraged increased use of tolling in recent transportation legislation, including the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141). Recent projections of a $15 billion annual gap between revenue anticipated from taxes dedicated to surface transportation and the cost of maintaining the current federal surface transportation program have stimulated interest in changing tolling policy in conjunction with reauthorizing or replacing MAP-21.

Congress could achieve an expansion of tolling in several ways. At one extreme, it could simply encourage additional tolling pilot projects and a further expansion of tolling-supported innovative finance, such as more loans for road and bridge construction through the U.S. Department of Transportation’s (DOT’s) Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which would be repaid through user tolls. At the other extreme, Congress might authorize states to toll federal-aid highways as they see fit, or even require that Interstate Highway segments be converted to toll roads as they undergo reconstruction in the future, eventually turning all Interstates into toll roads.

The amount of revenue that could be generated by tolling depends heavily on the way in which tolling is implemented. However, broader use of tolling faces a number of constraints. The costs of toll collection may exceed 10% of revenues, even if all tolls are collected electronically, not including the cost of physical infrastructure. This compares unfavorably to the cost of collecting the existing federal motor fuels taxes, estimated to be less than 1% of revenues. Many roads, even in urban areas, may not have sufficient traffic willing to pay a high enough toll to cover construction, maintenance, and toll collection costs. The availability of competing nontolled routes could lead to evasion if motorists consider tolls excessive.

Efforts to make greater use of tolling are likely to draw attention to the federal role in regulating tolls. Under current law, federal approval is needed for initial implementation of tolls on roads and bridges that have received federal aid, but the federal government has no jurisdiction over toll rates. The law requires that bridge tolls “shall be just and reasonable,” but provides no mechanism for enforcing that provision. More widespread use of tolls is likely to raise significant questions about differences in states’ toll rates, preferential tolls for residents of particular jurisdictions, state attempts to collect tolls at borders rather than at internal locations where more residents would be affected, and the relationship between auto tolls and truck tolls. Congress may consider a more precise definition of the current “just and reasonable” requirement and clarify the role of DOT in enforcing tolling regulations and overseeing toll rates.