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Vol. 17, No. 2; March/April2006

March/April 2006

Highway Tolling Has Reached the Tipping Point

In a May 2003 Brief entitled "It's Time To Take A Fresh Look at Highway Tolls" we suggested that a wider use of tolls would give America's metropolitan regions congestion relief without the need to raise gasoline taxes. We wrote: "At a time when the needs for transportation capital greatly exceed traditional sources of funding, tolls may assume a dominant role in the funding of new highway capacity perhaps as early as the next decade." Events in recent months tend to lend credence to our hunch.

According to author Malcom Gladwell, an idea can lie dormant for a long time and then suddenly catch on when the right stimulus happens to come along. Spreading rapidly like a virus, the idea soon becomes part of the mainstream and turns into a powerful agent of change. Gladwell called this phenomenon  "the tipping point." It looks to us like the idea of charging for the use of highways has reached such a tipping point. 

Virtually every week brings fresh evidence that highway tolling and private financing are gaining new converts among governors and state transportation officials, in state legislatures, and in the media. Growing transportation budget shortfalls, eroding value of highway tax revenues and a supportive federal policy toward tolling and public-private partnerships have helped to nurture the idea. Fanning its spread are visions of highway projects built entirely with private funds and prospects of multi- billion-dollar concessionary cash payments that could jump start ambitious transportation improvements years in advance of their planned execution.


The Search for Alternatives to the Fuel Tax Begins in Earnest

"... the budget sets aside $100 million for testing alternatives to the gasoline fuel tax – alternatives that may well prove to be more efficient for financing construction of new roads and more effective for relieving congestion and maintaining existing roads. Grants under this pilot program will allow the federal government to partner with up to five states that want to test fees, tolls, and other approaches on a broad scale – either statewide or across an urban area and its suburbs... The lessons that we learn through these demonstrations will help inform future decisions on surface transportation policies. The timing is important. By the end of the 2007 budget year, only two years will remain before SAFETEA-LU expires."

With the above  announcement, the U.S. Department of Transportation has launched a new phase in the search for solutions to the emerging highway transportation funding crisis. To be sure, warnings about an impending fiscal crunch and proposals on how to solve it have been multiplying over the past year. But now, the U.S. DOT is taking a step further. In proposing to fund pilot programs to test alternative funding mechanisms in the field, the Department is in effect saying "the time has come to go beyond studies and see how some of these approaches work in practice."


The "New Starts" Program is Changing its Emphasis

The President's Budget for FY 2007 contains some good news for the transit community. As announced by Transportation Secretary Norman Y. Mineta on February 6, the spending plan provides $571.8 million in continued funding for 16 existing rail projects with full funding grant agreements and $ 657.6 million in funding for seven new rail projects. In addition, five other projects are singled out as "considered for funding." Altogether, the New Starts program is proposed to be funded at $1.466 billion, an increase of $220 million or 17.6 percent over the approved FY2006 budget.

A detailed examination of the Annual Report on New Starts for FY 2007, which was released concurrently with the Budget proposal and which provides the justification for the recommended budget figures, reveals an important shift in emphasis from the earlier years. Of the 12  projects that are "pending, "proposed" or "considered" for full funding, only one — a light rail line in Norfolk, VA — is truly a "new start."  The remaining 11 projects, although technically called "New Starts," are in reality extensions to already existing rail transit systems or launchings of commuter rail service over already existing rail road track.


Notes From the Annual TRB Meeting

The Annual Transportation Research Board (TRB) meetings have always been a reliable barometer of what the transportation community considers to be the key issues of the day. At this year's meeting, judging by the standing room only at conference sessions and crowded committee meetings, the subjects of  tolling, road pricing and public-private partnerships (PPP) appear to have risen to the top of the transportation agenda.  Speakers at these sessions communicated a palpable sense of excitement about the growing acceptance of tolling by politicians and public officials, and the increased willingness of private capital to invest in transportation infrastructure. A heavily attended two-part symposium on "Truck Lanes and Road Pricing" suggests that the idea of TOT lanes (truck-only-toll lanes)  may soon join HOT lanes (high-occupancy-toll lanes) as a mainstream transportation concept


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