Tolls Pay the Way for Updating America's Interstate Highways

Gas taxes aren't sufficient to finance the extensive rebuilding needed.

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Robert Poole is the director of Transportation Policy at the Reason Foundation.

America needs interstate tolling. The interstate highway system is America's most important transportation infrastructure. Yet without a major change in how we pay for it, this hugely productive resource is seriously at risk.

[Read Rep. Renee Ellmers: Highway Maintenance Shouldn't Depend on Tolls]

Major highways, even if properly maintained, have a design life of about 50 years. Over the next decade, a large fraction of the interstate system will reach age 50 or more. At that point, these highways will need complete reconstruction—and to today's design and safety standards, not those of the 1950s. The estimated cost? Between $2 trillion and $3 trillion. In addition, many interstates—such as I-95 in North Carolina—need more lanes, which adds to the cost. And many of the interchanges in urban areas have become huge bottlenecks and need to be redesigned and rebuilt to handle today's (and tomorrow's) traffic volumes.

The gas and diesel taxes we've used to pay for highways are based on gallons used, not miles driven. But these taxes are gradually running out of steam, due to vehicles' ever-higher fuel efficiency and a growing number of vehicles using alternative propulsion systems. In addition, most taxpayers oppose increasing federal fuel taxes because they know Congress uses the proceeds for all kinds of other things besides highways. So where will the money come from to rebuild the interstates?

[See a collection of political cartoons on the economy.]

The best option is 21st-century tolling. Unlike old-fashioned tolling, the 21st-century version eliminates cash and eliminates toll booths. You pay the toll at highway speeds, using a credit card-size electronic device on the windshield. Most existing toll roads (Florida's Turnpike, New Jersey Turnpike, etc.) are converting rapidly to all-electronic tolling, which eliminates congestion and accidents at toll plazas.

Tolls are a much better user fee than gas taxes. First, the toll revenues are dedicated exclusively to the tolled highway that collects them. Second, tolls are tailored to the cost of the roadway. Interstates and urban expressways are far more expensive than other roads—but with gas taxes, everybody pays the same rate, whether they use the costly highways or not. Third, the investors who buy toll revenue bonds (thereby providing the capital upfront) insist that the tolled road be properly maintained over the long term, so it's as if that highway has its own endowment fund to ensure that it stays in top condition.

Opponents of interstate tolling call it "double taxation," saying we've already paid via fuel taxes and shouldn't have to pay again. They might have a case if the new toll revenues were used for some purpose other than rebuilding and modernizing the interstates. But existing gas taxes in most states are barely enough to maintain existing highways, leaving little or nothing for the enormous task of replacing worn-out interstates with safer and better-designed versions.

[See a collection of political cartoons on gas prices.]

I recommend the principle of Value-Added Tolling. That is, not putting tolls on unimproved, existing capacity, but only when you give the driving public significant new value, such as a new interstate on a route not currently served by one; a major capacity increase, such as doubling the number of lanes; or complete reconstruction and modernization, to today's design and safety standards.

These "mega-projects" would be impossible to do with gas taxes as the revenue source. This type of tolling would add real value, modernizing and expanding America's most important transportation infrastructure.