Ex-FHwA head: “Let’s toll the Interstates”

In the 75th anniversary edition of the Transportation Research Board’s TR News (January-February 1996, #182, p44) Thomas D. Larson former Federal Highway Administrator says we it’s time to get serious about tolling the Interstate system. We quote in full:

“...this gas-tax-fueled era is ending. I believe that there must be a shift to more direct user charges (TR: tolls) to fill (financial) shortfalls as they develop. The technology is available, the need is apparent, and we are gathering courage through experimentation. Leaping beyond limited current and timid experiments, Wilfred Owen has asked when we will consider tolling the Interstate system. I cannot answer that, but I do see in that bold stroke relief to state and federal treasuries, a vast new arena for applying new technologies, economic growth for the construction industry as the system is upgraded for heavier and more frequent commercial vehicles, and a huge new potential market for private finance. But more likely, this new era of funding will come like a night visitor, slowly and softly. It will occur across all levels of government, and political courage will build on broad shared experience and relentless need.”

Mr Larson told us by telephone from State College PA that he has been attracted to tolling of the interstates for some years. “That Brookings guy (Wilfred Owen) made such a good case for it. Since then I have always thought it seemed such good sense, but it was politically very ticklish,” Larson said. As secretary of transportation in Pennsylvania (1979 to 1986) he had looked seriously at tolling I-80 because of the “enormous cost” of maintaining it. It simply made no sense, Larson figured, that you had the untolled I-80 going east-west through the middle of Pennsylania) attracting traffic from turnpikes on either side of it -- the New York State Thruway to the north and the Pennsylvania Turnpike to the south. The turnpikes had a dedicated revenue stream for their upkeep whereas the state was constantly digging deep into its budgetary coffers to keep I-80 driveable. And it could never afford to do a proper of rebuilding the road. Budgetary limits kept the fixups to patch jobs and compromises. The lack of a level competitive playing field meant that I-80 was getting too much heavy traffic, compounding the problem, Larson said. But while he was in Harrisburg and Washington DC tolls were politically too hot to handle, Larsen told us. Now, he sees the balance tipping politically. The new technologies of electronic tolling make toll collection less unpopular and more saleable by politicians, he thinks. So he’s speaking out for tolls.

We tracked down Wilfred Owen, the Brookings Institution transportation economist who inspired Larson’s belief in tolling. Now retired from Brookings, though still busy writing, Owen lives in Arlington Virginia. He agrees that the gas tax is a poor source of revenue for highways, especially now with the current emphasis on improving fuel economy and moves to introduce cleaner fuels and electric cars. And he says tolls are the logical way to maintain and enhance the Interstate system, though he thinks that the difficulty of building new roads will lead us to rearrange the way we work and live and make do with less growth of transportation than we’ve had in the past few decades. He thinks e-mail, video-conferencing and the ability to tap into remote databases from small offices will replace a lot of commuting and other business travel. Highway tolling he says is a better way than gas taxes and license fees to ensure that people pay the real costs they impose by demanding expensive urban roadspace.

But Owen has long since hoped for rapid change in the United States. He laughs and says that a couple of months he spent in Japan had more impact on public policy than many decades writing and speaking out in the U.S. The sole transportation economist on an economic advisory team to a blitzed Japan in 1956 (the “Watkins Mission”) Owen said a principal problem crippling the revival of manufacturing industy was the difficulty of moving parts between one factory and another.

“The principal intercity roads were clogged. Freight trains were horribly slow. Japan obviously needed a completely new expressway system, but the problem was how could such a poor devastated country finance it?”

Owen said rather than follow the United States path toward gas tax financing based in an affluent consumerist era of spiralling gasoline sales, it made sense for Japan to build its entire expressway system on tolls, both to limit use of the system to business vehicles and to provide a guaranteed revenue flow for the borrowing which would be needed. The Japanese immediately bought the idea and the sale of bonds for the first expressway — between Kobe and Nagoya — was an immediate success, and set the pattern for financing the rest of the Japanese system of toll roads.•