Should Wisconsin Use Tolls to Finance Interstate Highways?

Thursday, October 6, 2011 at 2:08 AM by

For Whom Would the Tolls Toll?

Conservative groups generally don’t like taxes and government spending, but there are some areas where they do support more spending – such as highways, and especially Interstate highways. So how does one resolve opposition to taxes and support for additional spending in certain narrow areas? One way to do that is through user fees, such as highway tolls, rather than taxes.

A report issued this week by a conservative think tank, the Wisconsin Policy Research Institute (WPRI), makes the case for gradually phasing in tolls. I applaud WPRI for promoting public debate about an important fiscal issue and for proposing a solution.  Because Wisconsin, like other states, faces serious challenges for the financing of the transportation system, I think tolls are an idea worth considering. This blog post looks at a few of the pros and cons of the idea, and why I’m leaning more toward increased gas taxes.

The WPRI report, which was written by Robert Poole of the Reason Foundation, has generated a lot of media attention, including a supportive editorial in the Milwaukee Journal Sentinel and an editorial by the Appleton Post Crescent opposing the idea.

The Journal Sentinel editorial argues that the gas tax has become “an unreliable funding source for Wisconsin highways.” In fact, they make the surprising statement that “the gas tax has outlived its usefulness and needs to be retired,” which goes well beyond the proposal to phase in toll roads as a supplement to gas tax revenue. They share the concerns of the report’s author that rising gas costs and fuel-efficient cars will cause commuters to drive less and use less gas – causing gas tax revenue to decline at a time when road building needs and costs are growing.

The Post Crescent editorial agrees that more spending on highways is necessary, though it adds in passing that “our state needs to invest more in all forms of infrastructure, and look for more efficient ways of moving people and goods…” It also points out that gas tax rates haven’t been increased since 2006, and that raising the gas tax is the better option because toll roads and purchasing electronic passes are an inconvenience to consumers and businesses, and toll roads require “a new infrastructure and bureaucracy to track and collect tolls.”

I generally agree with the Post Crescent’s position, but they stopped short of making another point that I think is very important. It’s a point that takes me back more than 25 years to the debate in the Legislature in the mid-1980s when Tony Earl proposed indexing the gas tax. John Norquist, Sharon Metz and some of the other Democrats on the Joint Finance Committee argued against that proposal, contending that automatic gas tax increases would give the highway lobby and its conservative supporters a steadily growing gas tax revenue, without having to court the votes of more progressive legislators who would condition their support of gas tax increases on a spending plan that also supported other transportation modes, such as transit and rail.

Though I think tolls are a better option than tapping the General Fund to support highways and other transportation needs, I believe tolls would skew future transportation spending toward Interstate highways and away from other transportation system needs. Tolls would ensure a stable funding stream for the type of spending supported by organizations like Wisconsin Manufacturers and Commerce, while – in my opinion – making it more difficult to debate and find funding to support a balanced transportation system that includes robust transit systems and rail.   And higher gas taxes have the important advantage of promoting fuel efficiency and thereby reducing emissions of greenhouse gasses.

Let’s hope all of those considerations are part of an ongoing debate about how Wisconsin finds adequate funding to meet its infrastructure needs.

Jon Peacock

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