Since its inception, the Federal Interstate System and Texas State Highway System have been primarily funded with motor fuel taxes (the gas tax – 18.4 cents federal, 20 cents state). Gas taxes have been the primary user fee, but the current tax has remained unchanged since 1993 (federal) and 1991 (state).
Neither the federal nor state gasoline tax adjusts with inflation, causing a structural revenue shortfall leading congress and state lawmakers scrambling to shore-up highway funds. In Texas, the highway program started as pay-as-you-go. But Governor George W. Bush and his successor Rick Perry turned to a reliance on debt financing and tolling to bailout lawmakers from having to prioritize spending. It started with a nebulously worded ballot proposition in 2001 that authorized debt and a follow-up omnibus highway bill, HB 3588 in 2003 that also opened the door to massive new powers to impose tolls, without public consent. Texas now leads the nation in road debt – totaling $31 billion (in principle & interest). Another new financing mechanism was born in HB 3588 called Comprehensive Development Agreements (CDAs), known as public-private partnerships (P3s) globally. P3s hand our public highways to private corporations, most of them foreign companies, in sweetheart deals that last for a half century at a time. It grants these entities government-sanctioned monopolies, guarantees profits, include massive taxpayer subsidies and/or loan guarantees, and places the power to tax in the hands of private corporation that taxpayers cannot hold accountable.
In 1998, Congress established the Interstate System Reconstruction and Rehabilitation Pilot Program, authorizing three toll pilot projects to toll an interstate highway, bridge or tunnel. Public pushback kept that from happening. Former U.S. Senator Kay Bailey Hutchison from Texas ensured Texans were protected against tolls on existing interstates when she imposed a ban in 2007 when the Texas Department of Transportation (TxDOT) sent a report to congress asking to do so. TURF and TFF want that protection to remain in place.
Tolls most expensive option
It currently costs about one penny a mile to use a gas-tax funded road (closer to two cents when you add in state gasoline tax). With the national average price of gasoline at $3.69 a gallon, increasing the gas tax is a non-starter with most politicians. In contrast, tolls cost between 10 cents a mile up to 95 cents a mile when the toll project is privatized in a public-private partnership. So tolls represent an explosion in the cost to travel and dwarf any increase in the gas tax.
Congress and states looking for additional dollars are vulnerable to toll industry pressure to lift the ban on tolling existing interstates.
TOLLS ARE TAXES
Texans already pay both federal and state gas taxes and vehicle registration and other taxes and fees to build and maintain our highways. Charging motorists again represents double taxation. Imposing tolls on existing highways forces us to pay twice for the same stretch of road: a gas tax and a toll tax.
Tolls hit the poor, low income, and middle class families hardest. There are many areas where toll projects leave no economically viable substitute for getting people and goods over long distances and will force many to pay or price them off our public roadways altogether. It could also put jobs out of reach for the working poor.
Follow the Money
Nearly 47% of the state gasoline tax is diverted to non-road purposes, 25% of it is dedicated to public schools per constitutional amendment. In addition, all of the sales tax on vehicles ($3.3 billion/yr) goes into the General Fund and is not allocated to roads. Truth in taxation and good government requires taxpayers to insist the taxes collected on road users (any imposed on our vehicles or road usage) must be dedicated to roads. Until the state legislature ends these diversions, the public has every right to reject higher road taxes or an increase in gasoline tax. In fact, by ending gas tax diversions and dedicating the vehicle sales tax to roads, it would create an adequate, reliable, sustainable funding stream to build, maintain, and add capacity to our public highways without raising taxes or imposing tolls.
Toll revenues are even more unaccountable and in the hands of unelected, unaccountable boards.
Tolls are INEFFICIENT
Toll roads take years to break even. As we know form experience, tolls rarely come off the road once the debt is finally retired. Tolls become unaccountable slush funds for politicians to pilfer for their pet projects that would never pass muster with voters.
Collection costs average 33.5% for toll roads versus 1% for the gas tax, according to the Transportation Research Board of the National Academy of Sciences.
Alliance for Toll-free Interstates reports that in 2003, researchers in New Jersey calculated the annual cost of electronic toll collection on the Garden State Parkway to be $46.9 million—or about 92% of what it cost the federal government to collect federal gasoline taxes in all 50 states during that year.
Here in Texas, the North Texas Tollway Authority (NTTA) failed to collect over 7% of the total revenue generated due to evasion and other collection problems. So electronic tolling, while it may allow drivers to bypass cumbersome toll booths, is still fraught with problems.
Only the Harris County Toll Road Authority system is currently operating in the black in Texas.
Tolls increase the cost of everything we buy, hurting the economy, jeopardizing jobs, and adversely affecting the economic competitiveness of businesses. Tolls also increase the cost of living. In Mercer Island, Washington, it is estimated that workers commuting to the island will pay an extra $1,300 each year just to get to and from work if officials add tolls to I-90.
Politicians like to say ‘there will always be a free option,’ but TxDOT has a history of converting highway expressway lanes to toll lanes and leaving motorists access or frontage roads as the free (or non-toll) option (parts of SH 130, Hwy 290 & Hwy 183 in Austin as well as 121 in Dallas). Non-compete or adverse event clauses in toll or bond documents prohibit or penalize government agencies from expanding free lanes/routes surrounding toll lanes. This guarantees congestion on free alternatives forcing more to pay tolls to get anywhere. With 500 toll projects being contemplated around the state, Texans will soon have no choice but to pay this punitive new tax on driving.
TxDOT’s 2012 Unified Transportation Program coupled with projects open or under construction showed $10 billion in taxes or other public money will support toll roads in Texas. So whether you use the toll road or not, all Texans will be paying for it. This, too, is another form of DOUBLE TAXATION. TxDOT has also opened highways that are 100% paid for with gas taxes as toll roads: Texas 71, MoPac, SH 45 SE in Austin, Katy Freeway/I-10 managed toll lane project in Houston,
Naturally, when a toll is imposed, drivers now seek to avoid paying it. So toll roads divert traffic and create congestion on local streets, making them less safe and harder for EMS and first responders to reach accidents. This traffic diversion effect greatly degrades surface streets that aren’t designed or built to handle the weight and volume of such heavy traffic. A recent study in North Carolina predicted that tolls would divert up to 36% of traffic to other routes.
Tolls also mean businesses in corridors that were previously toll-free lose customers to corridors without tolls. An Economic Assessment of I-95 in North Carolina completed in 2003 estimated that between 2014 and 2050 diversion from tolls on I-95 would cost approximately $1.1 billion dollars in revenue to businesses within a mile of the I-95 corridor in North Carolina.
A Forbes Magazine article in September 2013 details how the government can track you using your toll tag. Another story in 2014 describes how New York traffic officials have tracked thousands of motorists using their toll tags on over 3,000 miles of non-toll roads.
Freedom to travel at risk
All told, toll roads jeopardize freedom to travel more than any other public transportation policy. Between High Occupancy Toll policies that require you to be registered with the government and approved as a carpool and have 2-3 passengers in your car in order to ride free (and some only give you a discount for an HOV) and the congestion pricing that charges motorists more in peak hours, tolls allow the government or their private partner surrogates to control when, where, how often, and how much it will cost to access and travel public roads.
Americans Hate Tolls
Texans do not like tolls. Polling in both Texas Senate District 25 in 2014 and in House District 117 in 2009, show over 80% oppose tolls.
In other parts of the country, the same opposition exists:
- 76% of participants opposed tolling roads in Virginia as a way to pay for regional transportation improvements.
- In California, 60% of residents were opposed to a toll of $5 or more, even for a travel time savings of up to 40 minutes.
- 63% of North Carolina residents opposed making some highways toll roads.
Texans like Americans do not want or cannot afford to pay tolls on a daily basis. We must keep an affordable, freely accessible public road system in place.