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 CitedBaxter, 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/.