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GUEST COMMENTARY: Should Missouri add tolls to Interstate 70?

Thursday, January 5, 2012 | 6:00 a.m. CST

Think about the difference in the taxes that property owners pay to fund local parks and the entrance fee your family pays to visit Yellowstone National Park. That is the appropriate framework to begin discussing toll roads. Everyone in the community can access local parks so general taxes support their existence. A much smaller percentage of people visit Yellowstone each year, and those people support it with an admission fee. Interstate highways are like Yellowstone — admission fees (tolls) are the preferred means of funding.

The Missouri Department of Transportation has announced plans to make Interstate 70 a toll road to fund renovations. Let us make two assumptions: MoDOT will overcome any legal and political impediments to do this (not a safe assumption) and the renovations to I-70 are necessary (I think MoDOT is on safe ground here). With those assumptions set, the focus simply becomes: Is tolling I-70 a good public policy decision? I believe it is.

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Missouri has less history with tolling than many other states. Most toll bridges across rivers in Missouri were converted to free facilities decades ago. Two bridges continued as tolls until recently — the McKinley Bridge in Saint Louis and one connecting Missouri and Iowa. The only toll facility now in Missouri is the Lake Ozark Community Bridge, which opened in the 1990s. Unlike neighboring states Illinois, Kansas, Kentucky and Oklahoma, Missouri has never tolled its highways.

The plan is to have a private contractor reconstruct and toll the part of the highway between Saint Louis and Kansas City but leave the parts within the urban centers toll-free. Without tolls, MoDOT officials say they would have to increase the gas tax 15 cents per gallon, almost doubling Missouri’s current — and admittedly, low — tax of 17 cents per gallon. The future toll rate (or rates, if they are adjustable, as they should be) is unknown, though the rate should be high enough to fund the highway and discourage congestion but low enough to discourage taking alternate routes.

In July 2011, I visited a gas station in downtown Saint Louis to film a video on excise taxes in Missouri. We found a gas station, which at one point had cars from Illinois filling its entire lot. We spoke with the manager of an Illinois car service company that drove a dozen of its vehicles every day from Illinois to Missouri just to fill up with gas. Right now, it is inarguable that Illinois residents subsidize Missouri drivers (by buying more gas here than they consume via road usage). If Missouri raises its gas tax, thousands of southern Illinois commuters will see their costs increase, too, including many who never drive on I-70 or do so merely for the first few blocks into downtown Saint Louis. (And yes, the new Mississippi River Bridge should have been a toll bridge.)

A Missouri driver, using baseline assumptions of driving 20,000 miles per year in a car getting 25 miles per gallon, would pay $120 more per year in gas taxes after a 15-cent increase. That would equal eight trips on I-70 if we estimate a $15 toll to cross the state. However, all Missouri motorists and anyone else buying gas in Missouri would pay that tax increase, whether they use I-70 or not. Truckers and frequent highway travelers would likely have to pay more with a toll than with a gas tax increase. There is nothing unfair about that because they are the people choosing to use the asset and drive the road.

How should one pay for public goods and services, through taxes or user fees? Good public policy often comes down to the economic questions of rivalry and excludability. Pure public goods are non-rivalrous (meaning that your consumption of it does not limit my consumption) and non-excludable (meaning that it is difficult to prevent someone from using a particular good). Sound public policy suggests that general taxes pay for those types of public goods. A local road system is not excludable (there is no means of keeping someone from leaving their driveway and driving on the street) and non-rivalrous (your use does not impede my use, although congestion makes any road rivalrous in certain conditions). Taxes, such as a general gasoline tax, are preferred for these systems.

Interstate highways connecting major cities (and many bridges) do not meet those standards for public goods. Their limited entry points make it easy to control access, so they are readily excludable. And while highways are not considered rivalrous, they are more rivalrous than local roads because of greater issues with congestion due to peak travel time demands and limited alternative routes. Smart policy is to pay for services like this via fees — in this case, tolls.

Tolls provide the necessary funds to build and maintain the road assets that benefit certain users, such as truckers, more than others. They provide a reliable source of funds to maintain the road in the future. With the recent technological improvements to tolling, fees can be efficiently collected without the long lines at toll plazas that some people may remember. Every state should move in the direction of lower general taxes for roads and more tolls where appropriate. Missouri’s I-70 is one road where it is appropriate.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri Public Policy.


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Comments

Christopher Foote January 5, 2012 | 11:56 a.m.

I like the idea of a toll, as it transfers at least a portion of the infrastructure costs onto the actual users. It may also encourage more efficient transportation alternatives, by significantly increasing the cost of one occupant automobiles using I-70.

(Report Comment)
Jimmy Bearfield January 5, 2012 | 12:38 p.m.

The fatal flaw with increased fuel taxes is that the revenue potential steadily declines as vehicles become more fuel-efficient.

That's why Congress is studying usage-based taxes, where a GPS module tracks how many miles a vehicle drives in a year. The vehicle's owner would pay a tax based on that usage. Of course, that tax would be in addition to -- not in lieu of -- fuel taxes and tolls because governments never have enough money.

(Report Comment)
Ray Shapiro January 5, 2012 | 12:43 p.m.

Without any decent alternative route for travel in this East to West corridor, there will be consequences including increased truck shipping expenses, which will increase the price of goods and also place further financial challenges for those who commute to work or do volunteer work. I would even think that use by tourists and shoppers will decline.
The impact of a toll I-70 would have disastrous effects for everyone.
I think there should be a one-way ten dollar toll bridge, for those going into Jefferson City.
How's them apples?
("Why Toll Roads Are A Bad Idea
By James Baxter, National Motorists Association President")
http://www.motorists.org/tolls/bad-idea
("Missouri Gov. Jay Nixon said a proposal to convert Interstate 70 into a toll road would be a "substantial change" and that doing it would require "broad consensus" among the public and within the state legislature.")
http://www.columbiamissourian.com/storie...
Toll Studies:
http://www.motorists.org/tolls/studies

(Report Comment)
frank christian January 5, 2012 | 12:44 p.m.

Christopher - Could you admit that you like the idea of a toll, fee, penalty, tax or any other method derived to cause a flow of money from people to their government?

(Report Comment)
roy willard January 19, 2012 | 11:09 p.m.

Like most citizens,I want the best roads and services in the world as long as I don't have to pay for them.

I'm not crazy about toll roads so I hope Frank has a better idea about maintaining our highways.

(Report Comment)
Mark Foecking January 20, 2012 | 5:09 a.m.

Jimmy Bearfield wrote:

"That's why Congress is studying usage-based taxes, where a GPS module tracks how many miles a vehicle drives in a year."

I've thought for a long time that that would be the fairest way to pay for roads, but it's a very complicated and data-intensive solution, and a lot of people aren't going to be comfortable knowing that Big Brother can track them every time they drive somewhere.

DK

(Report Comment)
Jimmy Bearfield January 20, 2012 | 8:16 a.m.

"it's a very complicated and data-intensive solution"

Not really. Pay-as-you-drive insurance uses the same GPS and wireless data technologies, and it's been in commercial service for several years here (e.g., Progressive) and abroad. In fact, pay-as-you-drive taxes would be less data-intensive than pay-as-you-drive insurance because it would collect only mileage and location rather than multiple metrics, such as the number of hard stops.

"a lot of people aren't going to be comfortable knowing that Big Brother can track them every time they drive somewhere."

Right, but that's a non-factor. Congress and state legislatures will make this decision for us, and it really won't matter whether we like it or not.

(Report Comment)
Ray Shapiro January 24, 2012 | 3:13 p.m.

If MoDOT manipulates the courts to implement a toll road on I-70 without a public vote their will be all kinds of fallout.
I suggest a statewide sales tax increase of 1/4 cents, (or other small amount), on all non-food purchases to help support all highway improvements and maintenance throughout the state.
At the same time, I would retire the two "life-time" administrators of MoDOT for not encouraging a funding approach, other then forcing road tolls on us, without due process of a statewide vote.
http://modot.mo.gov/leadership/

(Report Comment)
Ray Shapiro January 24, 2012 | 3:24 p.m.

FYI:
("Freak out! MoDOT chief wants to toll I-70 without your vote")
http://blog.gasbuddy.com/posts/Freak-out...

(Report Comment)

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