Cash-strapped states embrace toll roads
As highway funds dwindle, South Carolina eyes revenues from I-95 tolls. Indiana and Texas lease roads to firms.
America has a freeway problem.
It needs to spend an extra $118.9 billion - above and beyond current state and federal highway funding - to upgrade its roads and bridges through 2022, the Federal Highway Administration estimates. But motorists, already distraught over rising fuel prices, don't want to foot the bill with higher gasoline taxes. So politicians from Oregon to South Carolina are reviving an old solution: the toll road.
Once seen as harbors of patronage, turnpikes are seeing a roadway renaissance. New technology that allows drivers to buzz through booths at a full clip is changing how Americans perceive their motoring experience, and revealing creative - and profitable - ways to build and maintain roads. Critics say the trend threatens to wreck the egalitarian spirit of highway travel in America by creating a form of travel tiered by wealth.
"There's clearly a trend for states to look at [tolls] and there's a lot of money on the table," says Matt Sundeen, a policy analyst with the National Conference of State Legislatures in Denver. "It's very alluring, because a lot of states have enormous highway budget shortfalls."
Politicians are scrambling for new highway funding options because traditional ones are dwindling. Gas taxes raised per mile of interstate highway, for example, have fallen by about half since the 1960s, after accounting for inflation, says the Reason Foundation, a libertarian think tank in Los Angeles. "We have a shortfall between the capacity that's needed and money that we have to build it," says Geoffrey Segal, the group's government reform director.
For many Americans, toll roads, especially with the advent of zip-through lanes, are increasingly appealing - if it eases their morning commute. Sixty percent of Californians said recently they favor toll roads over freeways if they save time, according to Lake Research Partners, a Washington, D.C., market research firm.
As a result, states are making bold moves. South Carolina has petitioned the federal government to turn its swath of I-95 into a toll road. The new I-25 high-speed toll lanes opened last week in Denver. Oregon is considering eliminating its gas tax in favor of making motorists pay for road usage per mile - with the help of toll transponders linked to a GPS system. Atlanta is mulling putting truck tolls on I-285, its crammed perimeter road.
Moreover, states are increasingly looking at an option already popular in Europe and Australia: leasing to a company the right to collect tolls on roads that it maintains. Illinois last week signed legislation that would allow such public-private partnerships. New Jersey is considering leasing out the New Jersey Turnpike. Texas has gone one better, partnering with Spain's Cintra to build a new highway - the $6 billion, 316-mile Trans-Texas Corridor 35 - expected to open in 2014.
States woke up to the possibility of leasing existing toll roads to private management firms when a partnership of Cintra and Australia's Macquarie Infrastructure Group agreed to pay $3.85 billion to Indiana for the 157-mile Indiana Toll Road, a year after the same group paid $1.8 billion for the eight-mile-long Chicago Skyway. Some $25 billion worth of public-private toll ventures are under way in at least six states, says the Reason Foundation.
"Right now, Americans are looking at toll roads - or no roads," says Peter Samuel, editor of Tollroads News, an online newsletter. Yet many projects face "popular suspicion."
Some critics complain that no-compete clauses in toll deals often include measures to lower speed limits on parallel free roads to drive traffic to the toll road - a polite form of highway robbery, they say.
"When government starts talking about raising tolls, putting in new tolls or selling off tollways, it creates a buzz [among motorists] and it's certainly not a happy buzz," says Eric Skrum, a spokesman for the National Motorists Association in Waunakee, Wis.
Protest has bubbled over in some states. Only one Democratic legislator in GOP-dominated Indiana voted for the toll road deal, as complaints rose about selling rights to the road to a foreign concern. In Austin, Texas, activists cobbled together the "Toll Party" to fight new toll roads there. The group claims to have unseated the pro-toll mayor of an Austin suburb.