by Alexander Simmons
As Texas is faced with a burgeoning population and further
economic development, its poor transportation infrastructure becomes a greater
issue. In the past decade, the state has chosen to address this problem through
toll roads financed by public-private partnerships. Currently, Texas lawmakers
are debating building new toll roads or converting already existing highways
into tolls. In theory, tolls help improve the mobility of the local population,
prevent congestion, ameliorate road quality, decrease the amount of time needed
to construct roads, increase development, boost productivity from time saved,
and avoid tax increases. Many of these benefits are indeed factual and have
little tradeoff; however, others are flawed. Moreover, there are costs associated
with toll ways that policymakers seem unaware of. With its already widespread
usage and possible expansion, it is important that policymakers consider the
tradeoffs associated with toll roads.
Flawed Benefits
Congestion
Theory states that new toll roads decrease congestion by
providing new road alternatives. However, toll roads often only solve
congestion problems for a small portion of the population. Residents within a
mile from the toll road usually get the highest amount of usage, while those
further away are relegated to other more congested routes. Additionally, many
citizens cannot financially afford to drive tolls regularly. Thus, there ends
up being a lopsided share of traffic between the two road networks and
lifestyle inequality. The toll ways are usually uncongested and sometimes
receive sparse usage, while the free roads face heavy traffic that result in
travel times that are twice that of the tolls.
Development
Theory urges that toll ways improve consumer access to local
business and thus, further economic development along the road. However, there
is little evidence to support this in the short run. According to Sukumar
Kalmanje’s research, Texas toll ways attract additional trips to local business
by a negligent 1% and thus, have almost no effect on short-term development.
Although, in the long run, it is likely that economic development will follow
the route of the toll way and lead to agglomeration. Unfortunately, there is
not enough evidence from Texas toll ways to support this argument.
Tax Increases
Due to Texas’s balance budget requirement, road funding
cannot be done without either cutting another government program or increasing
taxes. In theory, toll ways opt as a method of building roads without
increasing taxes. Yet, tolls are essentially a consumption tax on driving.
Instead of paying a road tax in a lump sum, residents contribute on a daily
basis.
Costs
Toll Price Increases
Currently, all toll contracts in Texas grant private
contractors the right to raise toll prices on an annual basis. These increases
are often tied to an inflation based index or revenue maximization formula.
Proponents insist that road prices should increase proportionally with the
prices of other goods. However, this argument ignores importance of roads. Consumers
have the option to remove other goods from their consumption basket, but cannot
do the same with driving. Additionally, price increases are allowed during
recessions or oil shocks and successfully worsen downturns.
Politically Unpopular
There is widespread distain for tolls in Texas. Despite
their many benefits, Texans view them as a form of double taxation and resent
the constant increase in prices. At some point, the general consensus of the
population must be considered by representatives.
Unwanted Foreign Influence
Since most toll roads in the United States have been built
by public agencies, there is virtually no private sector toll industry.
Therefore, large toll contracts are frequently given to foreign companies. In
the midst of an economic downturn and growing concerns of globalization, many
critics cite this as a poor economic practice and claim it exposes the United
States to security risks. In reality, the foreign firms originate from strong
ally countries and employ almost entirely Americans on the projects. Thus, the
foreign influence has no measurable negative effect. However, while this
argument is not realistic, policymakers still must consider the general
perception of the public.
Opportunity Costs
As with any government sponsored project, there are
opportunity costs policymakers should consider. In this case, it its best to
look at the opportunity costs within transportation infrastructure improvement.
For instance, funding could be directed to public transportation options, which
are severely lacking in Texas. If the general stigma attached to public
transportation in Texas could be overcome, the economic gains and those that
benefit could be much greater than in any road project. However, large scale
public transportation projects require a substantial investment and at this
point, there is little political support for such spending.
Conclusion
As policymakers debate about how to solve Texas’
infrastructure issues, it is important that they properly measure the often
cited benefits of toll ways with the costs mentioned above. If purely publicly
funded roads without tolls are no longer an option due to budget constraints
and public transportation projects are off the table, toll roads built via
public-private partnerships may indeed be the best option for Texans. However,
this does not mean that policymakers can accept toll projects naively and
ignore taxpayers’ opinions.
