Tuesday, April 10, 2018

An Increase in Toll Roads

An Increase in Toll Roads
Kelly Longhini

While Wisconsin does not currently have any toll roads--roads on which drivers must pay a fee for passage--many of us are familiar with tollways or turnpikes. Common on busy highways, tollways assess a fee on drivers to gain funding for road construction and maintenance. The concept of tollways is nothing new; dating back to colonial America, the first turnpike opened in Pennsylvania in 1792. As the map depicts, a majority of states (shaded in green) possess tollways today, some familiar ones being the Chicago Skyway, the Florida Turnpike, and the New York State Thruway. Tollways are a current discussion topic, as many states are considering adding toll roads or increasing toll rates this year to compensate for a lack of infrastructure funding.

Many drivers would agree that tollways are inconvenient: they interrupt your trip, requiring you to either come to a complete stop to pay with cash at a toll booth, or slow down enough for cameras to detect an electronic transponder on your windshield that is linked to your credit card. Indeed, members of the National Motorist Association have argued that toll roads are inefficient and cause people to take alternate routes, creating congestion on non-interstate roads. Avoiding toll roads comes with an opportunity cost: faster travel time. However, roads without tolls do have an incentive of not having to pay. Additionally, a “2016 report from the Congressional Research Service found average U.S. toll collection costs requiring 8% to 11% of toll revenue” (Poole), meaning that a percentage of the money gained from tollways is not used for road repair, but to pay toll booth attendants and maintain the toll structures. This all begs the question: Why would states consider adding more toll roads?


Recently, funding for transportation infrastructure has gone down due to declining federal funding and a lack of revenue from gas taxes because new, fuel-efficient cars no longer require gasoline. From an economic standpoint, creating more tollways is an effective solution to collect money to maintain roads. In January, Bill Cramer, a member of the international Bridge, Tunnel and Turnpike Association, said that, “Local governments are seeing [imposing tolls] as a viable and useful option...It pays for the road, providing a steady stream of revenue to maintain that road at high quality and safety.” A widespread creation of toll roads with an option to pay cash would consequently drive up the demand for money in the money market, shifting the money demand curve to the right and increasing the interest rate. The Federal Reserve may eventually increase the money supply to bring interest rates back down to equilibrium level. Oppositely, if more electronic tolls are created, meaning that individuals can purchase transponders like an E-Pass, EZ-Pass, or I-Pass and pay online, then the demand for money will decrease as physical cash and coins are not necessary. In addition to gaining revenue, creating more toll roads would stimulate employment and production growth, as, “studies would need to be conducted to identify the best locations to collect tolls, equipment would have to be ordered, and physical infrastructure such as road-spanning gantries and communications structures would need to be designed and constructed” (Kirk), all of which would create more jobs and increase GDP.

Wisconsin is among the states considering adding toll roads. Debate in Congress has suggested that tolling would help resolve Wisconsin’s long-term funding dilemma for transportation. As the graph depicts, funding for highway maintenance in Wisconsin has steadily decreased due to stagnant gas tax. In February, Wisconsin Senator Scott Fitzgerald discussed a new federal infrastructure plan, saying that, “Trump's plan might promote a fix by providing $200 billion in federal infrastructure money over 10 years but only for states that bring their own money to the table” (Stein). Fitzgerald supports building tollways to manage Wisconsin’s lack of funding. Governor Scott Walker, who has been wary of tolls, responded by saying he would only implement tolling if taxes were cut by an equal amount in other areas. If Wisconsin establishes tolls, whether they be flat rate or variable, meaning they change based on congestion levels, it is important that the money go towards actual improvements. Ultimately, strategic, minimally irritating tolling proves economically beneficial; however, it is also important that citizens are informed about how their money is spent and witness actual improvements on the roads that need it most.



Works Cited
Baxter, James. “Why Toll Roads Are A Bad Idea.” National Motorists Association, www.motorists.org/issues/tolls/bad-idea/.

Kirk, Robert S. “Tolling U.S. Highways.” Federation of American Scientists, 26 Aug. 2016, fas.org/sgp/crs/misc/R43575.pdf.

Poole, Robert, and Mike Nichols. “Why Toll Roads Are Wisconsin's Only Realistic Solution to Its Transportation Roadblock.” Milwaukee Journal Sentinel, Milwaukee, 14 Feb. 2018, www.jsonline.com/story/opinion/contributors/2018/02/14/wisconsin-toll-roads-realistic-solution-transportation-roadblock/335383002/.

Povich, Elaine S. “More States Are Turning to Toll Roads in 2018.” The Fiscal Times, 9 Jan. 2018, www.thefiscaltimes.com/2018/01/09/More-States-Are-Turning-Toll-Roads-2018.

Stein, Jason. “Wisconsin Should Use Tolls to Get Matching Money for Trump's Infrastructure Plan, Top Lawmakers Say.” Milwaukee Journal Sentinel, Milwaukee, 7 Feb. 2018, www.jsonline.com/story/news/politics/2018/02/07/top-wisconsin-lawmakers-use-tolls-get-matching-money-trumps-infrastructure-plan/314732002/.

12 comments:

  1. I do not believe that Wisconsin should have toll ways. And if they were to have toll ways they should have a very very low price. The Illinois system has plenty of taxes on their highway systems but the constant money does not improve the slow traffic and the safety of city buses/trains. I agree with Scott Walker that if we were to get tolls that we should have taxes cut in another way to make up for the added expense.

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  2. I don't want Wisconsin to have toll ways because as you stated in you post, it slows traffic down. I hate going through them because we either have to slow down to 55 or basically stop. This is a very big inconvenience and although it may help the roads it slows traffic. Also when it is really busy there is a wait to pay and that burns more fuel. Toll ways have too many opportunity cost to them and I don't want them in Wisconsin.

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  3. A profit margin of 92 percent going into fixing roads is quite decent. The implementation of tollways in Wisconsin would increase demand for labor to man the booths, demand to create transponders that can be captured by cameras at higher speeds and demand for contractors to build them. Infrastructure investment is an important tool to grow the GDP.

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  4. I think that due to there being such a large profit margin of around 90% being generated from these toll ways, all of it going to fund newer and improved roadways and transportation infrastructure, that this would be in my view a great way at making up for the nationwide deduction of spending in infrastructure. Unless individuals are willing to pay more in taxes to make up for the lack in funding that this sector of our economy is receiving, I think that this might be a great way of getting around this roadblock and will most definitely improve the quality of our roads in the process.

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  5. I agree that toll ways should be added, but to be truly beneficial they should be only added to certain areas of Wisconsin. Many of the states with current toll way systems are high in tourism, which is what allows them to gain a profit. Placing toll ways in Milwaukee, for example, may help to generate revenue needed for infrastructure; however, toll ways in northern Wisconsin may not be as effective. Furthermore, I do believe that more technology should be developed to avoid traffic slowing around toll ways.

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  6. As with any other large investment, it's important to look at your ROI before building something this big. However, calculating your ROI would be extremely difficult for something like a toll road. As you stated in the article, many people find the toll roads to be extremely inconvenient, between the price and interrupting a long road trip. Because of this inconvenience, there's a high likelihood that some people would end up avoiding this road completely. I have no research to back this up, but I'm assuming toll roads are expensive to implement, and I wonder how professionals calculate the potential profit from a toll road,

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  7. While toll roads seem scary, the demand for roads of this quality is appreciated, and they are a major boon for local and state governments due to the *massive* amount of people using the roads.

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  8. This is very interesting and well written. While a large percent of the money from tolls goes towards keeping them operating, the money collected must still be substantial. Tolls in Wisconsin would likely be less effective, unless they are around Milwaukee. Part of the reason tolls are used in Illinois is because Chicago offers a lot of car traffic from people travelling for work or fun. Free roads might be more convenient, but then the roads are of less quality

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  9. I agree with Payton in that toll roads in Wisconsin might not be as effective as those in Illinois. Excluding Milwaukee and Madison, there are not many large cities that attract consistent high traffic on a daily basis. However, the creation of toll roads is often in response to the negative externality of traffic along a major roadway. The idea is to decrease traffic by encouraging commuters to carpool or use public transportation, which wouldn't be a bad thing in Wisconsin.

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  10. It is interesting how creating more energy-efficient cars provides the negative outcome of less money from gas taxes and thus more tollways -- these are the questions we don’t often think about when we hear about or buy new energy-efficient cars. I agree with the statements above in that in Wisconsin we don’t get as much heavy traffic and thus tollways might not be as effective, that is in comparison to the traffic surrounding Chicago. Yet, in states such as Ohio where people are oftentimes travelling down the turnpike to reach other destinations the tolls are probably effective, and therefore there is a possibility for them to be in Wisconsin as well.

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  11. I don’t like the idea of adding tolls to Wisconsin roads, but I do think that the road system does need more funding, as many of the roads in Wisconsin aren’t in the greatest of shape. I also don’t think that this would bring in very much money either, as we don’t have many big cities, and we are a little out of the way for anyone to drive through the tolls on a road trip.

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  12. Although road tolls would bring in some profit, I don't believe the amount would be of any significance. This is because, as other comments have pointed out, besides Milwaukee we don't have very many cities that regularly have high traffic. I do however agree that we need to generate more funds to repair some of our roads as the winter weather takes quite a toll on them. I just don't think that tolls is the best way to generate that money.

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