Nathan Scandella (personal)

Pay a Toll? Bad Idea.

As I resident of Washington State, I live amongst the largest concentration of transportation ignoramuses in the Western world. Today, I'd like to discuss one of the new ideas The Body Ignoramus is about to implement. Road tolls.

We have a few highly congested bridges, or stretches of highway, that need replacing, and decongesting. The vogue answer to both problems is tolls. First of all, I would like to clarify that I am not one to demand new transportation infrastructure, and yet refuse to pay for it. There are plenty in this area who fall into that category. My voting record has consistently included approving new taxes for transportation (Monorail, Sound Transit, buses, streets, etc.).

Here is the problem with tolls. First of all, tolls increase net congestion, not decrease. Let me repeat. Tolls increase congestion, not decrease. While tolls may (or may not) decrease the level of congestion on the precise stretch of road in which they are collected, they invariably increase total congestion. This is simple math, people. Toll-collection facilities (booths, or even the automatic systems that can scan a card while the car is moving) force cars driving past them to slow down. Period. If folks need to stop to pay cash, or use a card to pay at a toll booth, they are coming to a complete stop. That creates congestion. Even if the system employs readers to scan moving vehicles, there is typically a (slower) speed limit that cars must travel through the toll plaza at. Furthermore, the scanning posts provide obstacles, between lanes, that drivers must navigate. Finally, the toll plaza typically has no equivalent shoulder (otherwise, you could just drive through the shoulder and not pay the toll!). All of these factors do exactly what a stalled car on the shoulder of a freeway do. It forces people to slow down.

The ignoramus reply is, "but, the disincentive of the toll plaza will force people who don't need to take that route to choose another road, which decongests the toll road". First of all, in order for there to be a net reduction in congestion, the reduction in traffic on the toll road would have to exceed the aforementioned slowing down effect. This is what we call "overhead" - having any toll plaza is a non-zero overhead imposed on the system. Second of all, if the toll road is decongested because of drivers taking alternative routes, then the routes they do choose become more congested. The whole reason people were driving on the road (before it became the toll road) in the first place, is that it is less congested that its alternatives! People do some pretty stupid things, but most drivers are actually pretty good about taking the fastest route. Impatience works in a constructive way here.

People may choose alternate routes to avoid paying the toll, but this choice will not reduce overall congestion, it will result in more fuel being consumed, and it will cost the system money, in addition to the face value of the toll. I already addressed the net congestion increase. More fuel will be consumed, first because congestion will increase. Cars run less efficiently in stop-and-go traffic. They get fewer miles per gallon of fuel. Some may say that fuel economy may actually increase, because cars also don't run most efficiently at very high speeds. Having the toll plaza, the argument goes, may actually save gas by making people slow down. That might be true, if the status quo had people driving at 65 mph, the toll plaza forced drivers to go 40 mph (but not stop!), and the alternate routes also could move - with an increase load due to the toll implementation - at approximately 40 mph. But, this is not reality. The reality is that in places where people think toll plazas are a good idea, it's because traffic there has already slowed down, due to congestion. So, the toll plaza isn't going to take speeds from 65 mph to 40 mph, but rather from 40 mph, to 15 mph. Likely, the "alternate route" is a surface street that used to shuttle cars at 35 mph, and will slow down to 25 mph because of the increased load. This reduces efficiency, and increases overall fuel consumption.

Lastly, there are a couple hidden costs associated with the toll, that would not exist if the money were collected via a standard revenue stream (increase in taxes somewhere else, that is already taxed). First, the toll infrastructure needs to be created out of nowhere. Toll booths need to be built and maintained, and usually staffed by workers. While jobs creation is good, it doesn't help the economy overall unless the jobs creation adds value to our system. A toll booth collector is a pure overhead position. It does not allow the US to produce more goods. It simply transfers money from some US citizens, to the people who run the toll system. Now, it's possible that any increase in taxes to fund the roads would require some new bureaucrats to track this tax. However, if this is an existing tax revenue stream, the cost to add a couple new employees to count numbers would be small. No physical infrastructure needs to be built, as is the case with toll collection. The other reason that the system as a whole loses money is because (cheap) people will choose to drive a slower route to avoid paying the toll. Remember, if the toll route wasn't previously the fastest route, people wouldn't be choosing it. Let's say, to be conservative, that these cheap drivers only make minimum wage. So their time is worth $8.55 per hour in WA state. Chances are, choosing an alternative route is going to cost them at least 10 minutes. Even 10 minutes of their time is worth about $1.50. So, if the toll was $1.50, the system would not generate any new money. The entire cost of the toll would be offset by the lost productivity of the low-paid commuter. But wait ... why do we collect tolls in the first place? To pay for the roads. But, in this case, collecting a $1.50 toll doesn't even generate enough revenue to offset the economic loss it causes. See the point?

Now, sure, the alternative has costs, too. You have to increase a tax somewhere else by $1.50 if you're not going to collect that toll (actually, you don't ... because toll collecting infrastructure is less efficient, part of that $1.50 needs to cover the cost of the toll booth and operator ... but we'll neglect that for now). But, with a standard tax implementation, you're not taking 10 minutes away from a productive worker. It takes just as long for me to pay a $100 auto license fee as is does for me to pay a $101.50 auto license fee, unless of course, I'm paying it by counting the pennies I've found in my couch. What you'd rather have is a system where people work more, and have to give up more of their earnings to pay the taxes. The economy functions properly when everyone is put to work doing productive things. That means things that other people (buyers) find useful, and are willing to pay for. If our hypothetical commuter works at a school, we'd rather save them 10 minutes, to provide something of value to society, then to steal 10 minutes and have them use it doing something (commuting) that provides virtually no benefit. Either way, if we want the roads, we have to pay some kind of tax. The question is, does paying the tax itself decrease our productivity, or does it only take some of our money?

By the way, virtually the same argument can be made for why it's a bad idea to have a state income tax, as opposed to just charging higher property, car, sales taxes (etc.) instead. Filling out yet another income tax form just adds overhead, and reduces per capita productivity.

Finally, the issue of fairness needs to be brought up. We have an entire system of roads. Surely, only a select few of those roads would have tolls added. But, why them? Isn't that an arbitrary way to tax drivers? If I live and work near a toll road, why should I have to pay this fee, while people who don't live and work on different sides of the toll road don't pay? You could argue that living near a toll road would be reflected in a house's price, just like living near a landfill. You'd have to pay more tolls, but the "efficient market" would get you that house for a lower price. Ok, but that doesn't help people who buy and sell homes near the time when the toll was first instituted. If I buy a house, and then a toll road is added before I sell it, I get screwed. That's not fair.

The other problem is that the whole system of roads is a transportation network for the public good. That's why we give the responsibility of road-building to the government, instead of letting private companies patch together the roads. You shouldn't just have to pay for the part of the system that you use directly. If there are two parallel roads (e.g. I-5 and the Alaskan Way Viaduct), and only one of them is tolled, then this is unfair. If I-5 doesn't pay the toll, then Viaduct drivers get screwed. Sure, I-5 drivers aren't directly using a (new) Viaduct. But, Viaduct drivers take congestion pressure off of I-5. If it weren't for those people who took the Viaduct (and paid the toll), then traffic would be even worse on I-5. So, you can't say that people should just pay for the section of road that they use. You've also got the issue that everybody's life depends on delivery of goods to the stores they shop at. I may never even drive, and get my food from a local market. But, that local market gets deliveries from trucks that take the toll road. So, I benefit from the existence of that road, even if I don't drive on it. You can follow this argument to great lengths, along surface streets, freeways, to buses, commuters, and commercial deliveries. The fact is that roads, like electrical lines, sewer, or schools, are a common resource, and their cost should be shared fairly by all. I don't have kids, but I willingly pay thousands of dollars a year (yes, thousands!) to subsidize public schools. That's because I benefit from living in a society with educated young people. And I'm not looking to stiff the people who raise and educate kids.

Implementing tolls doesn't generate more revenue (compared to taxes), it doesn't distribute the cost more fairly, it doesn't reduce overall congestion, it doesn't help the economy, and it doesn't help the environment. It just bogs down our traffic even more, and encourages even more sprawl, as people and businesses move to Issaquah, or Kent. Efficient living means dense living. And that can only be done with good transportation. Not tolls.

Don't believe my rationale? Go somewhere that makes extensive use of tolls. Watch huge backups on the "freeways" before the toll plaza, often followed by smooth sailing after the plaza. Washington doesn't have much experience with tolls. Our transportation problems are so bad that people are desperate to try anything. It's like the old saying that the most popular player on a bad football team is the backup quarterback. Everyone's sure that he (it) is the solution. Usually, not.

So what do I propose? Take existing taxes, and make them bigger, to pay for roads. I'm all for discouraging driving, but toll roads aren't the way to do that. You can increase the gas tax, you can increase car license fees, or you could even add a per mile fee on people who own cars. We already require people to bring their cars to the emissions check station every couple of years. The technicians could check the mileage then, and send you a bill (one every two years). Similarly, when used cars are sold, you are forced to renew the license, and pay a sales tax. That opportunity could also be taken to collect an odometer tax, and discourage people from just swapping cars right before an emissions check was due.

But, paying a toll is an idea whose time should never come (here).

Posted at 04:20PM Jan 26, 2009 by Nathan in General  |  Comments[0]