Tollbooth Trouble

Tyler Cowen notes studies which suggest that switching electronic toll-collection leads to higher tolls. Mark Thoma's suggestion seems plausible -- electronic tolls reduce congestion and inconvenience, allowing authorities to raise the monetary price while keeping the overall hassle level the same.

From where I sit, though, a low toll is a scandal. Somewhere between Portland and Brooklin driving up I found myself paying something like a 50 cent toll -- and, of course, dealing with the various delays associated with this toll booth. Better fewer, but higher (as Lenin might say). If your tollbooth's only going to raise a little bit of revenue, just get rid of it, let the traffic flow freely and make taxes a little higher. If you are going to put a toll somewhere, make it higher and really get into people's pockets. The point is that it's not worth causing all that inconvenience as a way to raise money unless the money is going to be a large fraction of the total costs to drivers.

Photo by Flickr user Redjar used under a Creative Commons license

Comments

But then people will avoid the tolls.

Posted by JP | July 5, 2007 12:07 PM

This gives me an opportunity to say something nice about my state. Rhode Island eliminated a tollbooth on the Mount Hope bridge, which connects the towns of Bristol and Portsmouth and is a major thoroughfare to Newport. The toll had been 25 cents (I think), and the state wisely concluded that it cost more to maintain the tollbooth and pay toll takers than it earned. It's now free.

I think something similar happened in Connecticut. I recall as a college student paying quarters periodically as I made my way along the Connecticut turnpike. Now, there are no tolls on the turnpike.

Posted by Bob | July 5, 2007 12:08 PM

Sadly, in my home state of Connecticut, people are bandying about reimplementing toll booths instate (whereas now there are none). Toll booths are dangerous, the cause congestion and traffic, and the long idling times of so many cars is terrible both in terms of air pollution and carbon consumption. But the toll revenues had to be replaced, and they were replaced with a higher gas tax. Personally, I find the pleasure of having no tolls to vastly outweigh the higher gas tax. Unfortunately, asking people to make some small monetary sacrifice in exchange for these sort of benefits is the kind of thing you can't ask Americans to do anymore.

Posted by Freddie | July 5, 2007 12:08 PM

If the only purpose is to raise money, then yes. Tolls also control sprawl, however.

Posted by A comment. | July 5, 2007 12:09 PM

Taxes are typically leveled across the board, while tolls are designed as a fee-for-use. It boils down, in large part, to a philosophical question: how ought we allocate the costs for public goods that are enjoyed unevenly?

It's also a question of public finance. Not every jurisidiction enjoys a wonderful credit rating, but most major public-works projects are bonded. Levying tolls creates a predictable, dedicated stream of revenue that can be used to pay off the bonds, and then securitized to finance future projects. Of course, once the road is paid for, the tolls are never torn down. They're too tempting a source of revenue for politicians. This leads to two evils: enormous quasi-public agencies of the sort pioneered by Robert Moses, who built his empire on the back of tolls; and the privatization of inherently public assets, as evidenced by the current fad of selling-off toll roads to generate immediate revenue.

There's a final dimension to consider, though, and one that ought to give us all pause. Personally, I suspect Thoma is wrong. I used to count out the change every time I took my local turnpike, and now I don't pause to think about it. I'm not engaged in a complicated cost-benefit analysis of replacement goods; I'm simply less aware of being taxed. Now, if the revenues are being used appropriately, that's not a bad thing. But it suggests some interesting things about tax policy. For example, it may explain why localities generally have a much harder time raising taxes than the state or federal government. When the real estate tax goes up, rental and mortgage payments go up, too - and those generally require writing out a check. When payroll deductions go up, they're gone before the paycheck even gets deposited. It doesn't take a conservative to see that lowering the visibility of taxes makes it easier to generate revenue; it just takes a conservative to dislike that fact. Properly applied, it's an insight that can do a great deal of good.

Posted by FlyOnTheWall | July 5, 2007 12:12 PM

"If you are going to put a toll somewhere, make it higher and really get into people's pockets."

It's comments like this that make me think we should move the Capital to Denver or Boise or somewhere people live as a large number of people do in America: in suburbs, driving to work every day. Most people don't live in cities where they can take public transit to work and drive once a year up the coast when they summer in Maine. Those big, rare tolls Matt thinks would be a great idea would be bound to adversely, and perversely hit the working poor, working class, and middle class people who have to pass through the toll point every day on the way to work.

Posted by Linus | July 5, 2007 12:13 PM

It's comments like this that make me think we should move the Capital to Denver or Boise or somewhere people live as a large number of people do in America: in suburbs, driving to work every day.

It's comments like this that make me think many conservative blog commenters have never actually set foot in the Washington, DC metro area.

Christ knows, we don't have any government employees living in suburbs and driving to work every day. No sir. The Beltway, the Parkway, I-66, and Connecticut Avenue are free of traffic at all hours.

Posted by LaFollette Progressive | July 5, 2007 12:19 PM

I'm not sure if I get Matt's logic here -- if he has to go through the inconvenience of waiting in line to pay a toll, he would like it at least to cost him a significant amount of money.

Maybe this explains the appeal of the healthcare system in the U.S. In Canada, you may have to wait a long time for a surgery, but it won't cost you anything. In the U.S. you may also have to wait for surgery -- but then at least you have the consolation of paying a lot of money for it.

Posted by peep | July 5, 2007 12:21 PM

"Better fewer, but higher..."

New Jersey has done this in some places: doubling the toll in one direction but eliminating it at the same toll plaza in the other direction. And the tolls can be paid electronically, via EZ-Pass.

"Taxes are typically leveled across the board, while tolls are designed as a fee-for-use. It boils down, in large part, to a philosophical question: how ought we allocate the costs for public goods that are enjoyed unevenly?"

Two responses to that: 1) Anyone who buys goods transported on the roads benefits from those roads, even if they don't drive; 2) Do we worry about this "uneven enjoyment" in any other contexts?

Posted by Fred | July 5, 2007 12:26 PM

Re: Tolls also control sprawl, however.

I'm not sure about that. In many places toll roads are paralled by freeways. Here in s Florida the Turnpike and I-95 run pretty much the same route from Miami to Port St Lucie. In places they are only fifty yards apart. Up in Ohio SR 2 provides a free drive (much of it four lane expressway) between Cleveland and Toledo. I-80 in Pennsylvania is actually the faster route across the state (albeit it bypasses both Pittsburgh and Philadelphia by a vast distance). Other than toll bridges and some special cases (like Alligator Alley across the Everglades) I can think of few cases where there aren't free alternatives to the toll road.

Posted by JonF | July 5, 2007 12:28 PM

Is this a good time to reiterate that Delaware is evil? Their toll-price-per-mile is practically criminal. I moved from DC to New York in March and had to make the drive five times (three north, two south) to get my stuff moved in my Honda. The twelve miles (or whatever) in Delaware cost me as much as the entire drive up the New Jersey Turnpike.

I hate that state.

Posted by jhupp | July 5, 2007 12:29 PM

It's bizarre to think that you people have to pay to drive on roads that were built with your taxes.

Posted by eric | July 5, 2007 12:36 PM

I'm surprised no one has commented about the personal liberty issues involved with tolls. As much as I loathe American car culture, and the failed suburban transportation grid, I can't support the development of electronic tolling. Why? Because it fundamentally interrupts the ability to freely move about the country.

This is partly due to the issue of regressive taxation, where it becomes relatively much more expensive for poorer people to travel. However, the bigger issue can be seen in places like Chicago, where very soon you will not even be allowed on the road without an I-Pass. There is not such a good history with countries that have required any sort of "internal passport"...

Posted by liberty watch | July 5, 2007 12:40 PM

Long-term residents of the Bay Area will recall what a revolutionary day it was when Golden Gate Bridge tolls were doubled in one direction and eliminated in the other. It's remarkable how it helped traffic (in combination with other adjustments). The point is that this is one government system that can be improved enormously, with surprising ease.

Posted by Kit Stolz | July 5, 2007 12:50 PM

"Because it fundamentally interrupts the ability to freely move about the country."

You can take buses or trains if you're too paranoid to buy an eazy pass. It's not an "internal passport," it's a credit card that you can swipe at 15 mph.

Posted by Led | July 5, 2007 1:02 PM

Led:

Come on, whether or not you agree with me, give me at least a little effort in prognosticating. Yes, none of these systems at the moment are actually a huge restriction. However, the seeds have already been laid for potential future abuses, and you just haven't been awake the past 7 years if you can't see that.

There are already places with variable rush-hour pricing, where the cost of a toll road can range from $1 to $10 depending on time of day. You're telling me that this system couldn't also be "upgraded" to include more personal data? Or that privileged and wealthy people won't be able to get a special "all access" pass, and be able to travel to places that most people can't?

This is especially plausible given that there are many toll roads that are actually privately owned and operated - what's to prevent them from applying qualifying conditions about credit history, convict status, or political views? Ever heard of the no-fly lists, operated in conjunction with shadowy government security agencies and private airline companies? Why is it so hard to imagine a "no-drive list"?

As I said, it's unfortunate, because there's a lot of things about the EZ-Pass that I'd like to support, and it really has helped traffic in a lot of places. But I'm just not convinced that it's a worthwhile tradeoff long term, due to the factors I've mentioned.

Posted by liberty watch | July 5, 2007 1:14 PM

"The point is that it's not worth causing all that inconvenience as a way to raise money unless the money is going to be a large fraction of the total costs to drivers."

But wait a minute. If the money is going to be such a large fraction of the total driving cost, won't that deter drivers? And if you deter enough drivers, then the tolls won't be bringing in enough money. Which will force government to find the money elsewhere in the form of higher taxes. So you'll have higher taxes and high tolls, right?

Posted by Claudius | July 5, 2007 1:17 PM

Is Chicago planning to expand the tolling system? Because you can, of course, take roads in Chicago that are not part of the tolling system. As a resident of Wisconsin, it would be a pain in the ass to drive through Illinois without paying a toll, but it can be done.

I suspect we will find that the Man can and will use electronic tolling to track people's location. It can't be that difficult.

Posted by mwg | July 5, 2007 1:18 PM

I always thought that the the east coast toll roads (especially in Delaware and New Jersey) were a way to impose taxes on out-of-state drivers.

If these roads are maintained by state taxes but used by a large number of vehicles using them as the fastest way to get across the state, then the toll both seems the best way to extract the necessary funds.

I don't understand the call for toll roads in California.

Posted by DC | July 5, 2007 1:19 PM

Had ez-pass been designed like a smart-card with stored value rather than a RF-id which accessed your personal account, it would have been preferable in terms of privacy (though the booth could still theoretically photograph your license plate).

In any case, while tolls can theoretically be used to control sprawl, governments INVARIABLY are going to look at them as a source of revenue and ask themselves, "how can we raise as much revenue as possible?" Legislatures end up having an incentive not to control sprawl and discourage people from passing through main arteries. Rather, they have an incentive to encourage as many people as humanly possible to use the toll roads while spending as little money as possible on expanding or upkeeping the roads or providing alternatives to using the toll roads.

It's mostly cultural, I think. Americans want their government to have enough revenue to cover the costs of as little as possible. They don't want the government to spend money on quality-of-life amenities that would make life easier. A toll road that controls sprawl and reduces traffic would be seen as a public initiative that was spending money in such a way that would reduce the government's revenue, and that revenue would have to be made up in some other way such as taxes, which no one wants.

Posted by Constantine | July 5, 2007 1:27 PM

It's wonderful how solicitous of poor people conservatives become when the topic of discussion is auto travel.

Posted by Bloix | July 5, 2007 1:27 PM

Toll roads don't control sprawl. To the contrary.

At least the experience here in Texas is that when the freeways get clogged to capacity due to sprawl, the politicians come back to the table to add additional capacity in the form of toll roads, which not only supports the sprawl that is already built-up but encourages more and more of it.

Posted by Kent | July 5, 2007 1:33 PM

In the NPR report on this, after going on about "I'm in ur E-Z pass, raisin' ur tolls" and other such "they's taxin' us to death and, thanks to E-Z pass, we don't even notice" ... they mentioned "oh wait a minute ... tolls, though going up quicker thanks to E-Z pass, still really aren't keeping up with the cost of things" ...

Posted by DAS | July 5, 2007 1:36 PM

I live in the mid-south and there are no toll roads anywhere i can think of . The closest I recall is the the Bluegrass Parkway in Kentucky . Very prevalent in the northeast as a form of revenue , apparently , but not at all in the south . Why ?

This is an honest query , any ideas ?

Posted by Becca | July 5, 2007 1:38 PM

Becca, many northeastern turnpikes and turnpike authorities predate the Federal Highway System and were paid for by bonds guaranteed by toll revenue. At the time, the south was much more rural, and both didn't need that kind of infrastructure and lacked the population/wealth density to sustain it.

The Federal Highway System didn't allow tolls on federally-funded new construction, so highways poured with federal money as the south built up are free.

Posted by Brittain33 | July 5, 2007 1:48 PM

Becca -- it's because the roads came first and then the need for revenue came later. Brand new roads and bridges that were tolled from day 1 are the exception. But when it became necessary to consider a tax hike to raise enough funds to maintain the roads, planners saw traffic volume numbers and saw dollar signs, hence the toll booth.

Matt's retrofitting the discussion of tolls onto the discussion of managing traffic and environmental impact, much like the tolls were retrofitted onto existing roadway. That said, it's important to distinguish the two types of tolls: the low ones that attempt to take advantage of historical traffic patterns, and the high ones that attempt to alter traffic patterns. Most tolls were established in order to cash in, not to get people to think about not driving. It is a little urbanocentric to be offended by a low toll.

Posted by diddy | July 5, 2007 1:54 PM

Second the motion that Delaware is evil.

Posted by Deliver Us From DE | July 5, 2007 1:57 PM

IIRC, the Maine Turbpike From Augusta to Kittery is 4.00 or so. It's .60 to enter at some exits, and there are 1.25 tolls at New Gloucester and 1.00 at Gardner, and 1.75 at Kittery. Even if you got on at Falmouth -- coming down Rte 1 from the midcoast -- it's still 2.35. A hundred miles/4.00 = .04 a mile.

New Hampshire has a 1.00 toll for 13 miles, .13 a mile.

Not as big a bunch of bandits as Delaware, but nearly as bad.

Posted by Davis X. Machina | July 5, 2007 2:09 PM

Liberty watch: Sure, the system could be abused, but so could any gov program. I don't think that's a good reason not to do something that is otherwise very good policy.

Posted by Led | July 5, 2007 2:14 PM

IPass is a stupid solution. The obvious solution to the congestion problems caused by the tolls was to throw a few cent tax on gas and tear down the tolls. Of course the Tollway Baron's weren't going to go for that so we get a massively expensive infrastructure investment in a problem that would be better solved by ripping the whole thing down.

Posted by Ed Marshall | July 5, 2007 2:21 PM

As a former Fightin' Blue Hen (that's a graduate of the U of Del, for you non-mid-Atlantic types), I feel I should step up to defend the great state of Delaware from the large-state bigots posting here. Sure the tolls suck, but tax-free shopping, people! Just hop off the interstate, buy a TV at BestBuy in Christiana, and you're money ahead for the trip. Okay, if you're doing a lot of travelling you might end up with a surfeit of home electronics, but there's all sorts of other stores near I-95.

Posted by Larv | July 5, 2007 2:22 PM

Tolls are one of those things that make the East Coast seem like a foreign country to me. Do East Coasters have to have cash with them whenever they want to drive anywhere, or do the tolls take credit cards?

Posted by too many steves | July 5, 2007 2:34 PM

Tolls are sometimes useful just for controlling traffic. It costs $4 to cross the Bay Bridge (and $5 to cross the Golden Gate) to get into San Francisco (it's free to leave the city, though). Even if the system only ran at break-even, it'd still be worth it for encouraging people to take buses or BART, and keeping the congestion and parking situation in SF at slightly-less-than-apocalyptic levels.

London's newly-implemented driving fees were intended more as congestion-control measures rather than revenue generators, weren't they?

Posted by FMguru | July 5, 2007 3:31 PM

Yeah, the whole state is tax free thanks to legalized highway robbery.

It's a wonder that the future DuPont Chemical Complex became the first state. Thanks to the wonderfully business friendly rules of incorporation in DuPont Land, Delaware corp credit companies are free to visit all sorts of usurous credit card scams on the unsuspecting among us.

If you're going to charge us $0.25 A MILE for passing through your sorry excuse for a state, then at least make the tolls all go one way to ease congestion. Heck, I suppose we should all be thankful that there are now more than four booths going across one lane. Thanks to the traffic situation your lame state causes whenever there's anything like moderate traffic conditions on I-95, I would rather go all the way around, via Pennsylvania and Maryland. It takes longer, and slightly more gas, but at least I'm moving, and the tolls are a total of $0.75.

I'd say it's a pathetic joke of a state, except that the joke is on those who are forced to travel through it.

Posted by Deliver us from Devilware | July 5, 2007 3:35 PM

Here in Texas we combine our toll roads with political favors. We sell our toll roads to multinational corporations. And while we are at it we promise to do a crappy job maintaining the alternative routes so that more people will have to use the toll roads.

And our Governor tried to sell our lottery last legislative session.

Posted by Nat | July 5, 2007 3:44 PM

Becca,

Brittain3 is right; diddy is (mostly) wrong. Very few roads start out as freeways and get converted to toll roads. In the nineteenth century, almost all of our nation's transportation infrastructure was built via private enterprise (albeit frequently with the aid of some form of government subsidy). That included a new network of roads, capable of bearing up under heavy usage. Very few of these roads ever turned a profit, but the towns they connected frequently boomed after they opened, and their backers thus reaped an indirect payoff. Constructing toll roads was a classic act of civic boosterism. Generally, the bylaws stipulated that once the construction costs were paid, the roads would become free. For the most part, those roads have long since become regular highways - innumerable state routes in the northeast began their lives as turnpikes.

By the Progressive Era, the public was far less confortable with the notion of turning to the private sector to construct vital infrastructure. The highways constructed in the twentieth century have been, in this country, publicly funded. But as I explained in a post above, financing toll roads is a heck of a lot cheaper than financing roads through general revenue. Then, as Brittain33 explains, the federal government got into the act. In a sense, the FHA and its highway trust fund is precisely the sort of solution that Matt advocates - it takes tax revenue (mostly from the gas tax) and uses it to fund the construction and maintenance of highwways, instead of charging tolls. In short, the South and the West, as usual, were far more reliant on the largesse of the federal government to underwrite their prosperity than the rest of the country.

In a lot of ways, of course, a gas tax is a perfect way to fund transportation infrastructure. It has a direct impact on demand. It encourages mass transit and fuel efficiency. (It does have the drawback of being a tad regressive, but that's fairly easily fixed by offsetting, income-linked credits.) But it does have one major drawback - it's not transparent. When I pay a toll, I know that my money's going to support the maintenance of the road. (Most of the time. That's why Delaware draws such a visceral response - it charges tolls disproportionate to the benefits it offers.) When I pay a gas tax, I may well be funding bridges in Alaska. Intellectually, I know which is the better choice. But that doesn't mean it never rankles...

Posted by FlyOnTheWall | July 5, 2007 3:52 PM

That Delaware toll is easily avoidable, folks. Just look at an atlas. Only 5 minutes out of your way. It's the Maryland tolls that really get you.

Posted by No, Delaware rulez | July 5, 2007 3:55 PM

Is this Uzbekistan or what? You mean you can't pay tolls in America by credit card, as we have done in Europe for a decade or more?
A toll of 75c is not worth collecting anyway. Either charge a rate with an economic basis (cost recovery or congestion) or have it free.

Posted by James Wimberley | July 5, 2007 4:41 PM

I moved from DC to New York in March and had to make the drive five times (three north, two south) to get my stuff moved in my Honda. The twelve miles (or whatever) in Delaware cost me as much as the entire drive up the New Jersey Turnpike.

Delaware, if asked, might have suggested a U-haul.

Posted by anon | July 5, 2007 5:17 PM

Many thanks to diddy , Brittain33 and FlyOnTheWall for the information . It was greatly appreciated and very kind of you all .

It's funny , because while some areas still deal daily with toll roads , here in the midsouth we deal with those ubiquitous orange barrels. There was even a song about it that played regionally out of Nashville - appropriately entitled "Orange Barrels" (which also was the extent of the lyric).

Posted by Becca | July 5, 2007 7:18 PM

James Wimberley:

"Is this Uzbekistan or what? You mean you can't pay tolls in America by credit card, as we have done in Europe for a decade or more?"

Look in the top right of the photo. "EZ-Pass" refers to an electronic toll payment system in the Northeastern U.S (there are similar systems in other regions). You have an electronic thingy stuck to your windshield and you can drive through the toll without stopping. The toll is then deducted from your EZ-Pass account. You can set your credit card to automatically replenish this account.

Posted by Fred | July 5, 2007 8:13 PM

Minor point: The Federal Highway Administration is the FHWA. The FHA is the Federal Housing Administration.

There used to be a 50-cent toll on the Vincent Thomas Bridge going from Long Beach to San Pedro (south of L.A.). Our state assemblyman at the time, Alan Lowenthal, learned that it was costing 49 cents to collect each toll, so they got rid of the toll and razed the tollbooths.

The theory behind congestion pricing sounds pretty convincing to me; I'd like to see it tried here in SoCal, but maybe on some sort of trial basis.

Posted by Adam Villani | July 6, 2007 4:43 AM

Oh, somebody mentioned a lack of toll roads in the south... Florida has several. Kentucky has a few, and used to have many more; Kentucky's toll parkways funded the construction of the roads, and once they were paid for the tolls were ended. Texas has some around Houston. Oklahoma and Kansas (yes, I know, not the South) have them, too.

Posted by Adam Villani | July 6, 2007 4:46 AM