From SCDigest's On-Target E-Magazine
- July 28, 2015 -
Supply Chain News: Electronic Tolls Really are the Answer to US Highway Report Says, but the ATA Again Disagrees
Someone Needs to Come Up with at Least $1 Trillion Somehow; Costs to Use Interstates Headed Up One Way or Another, as Highways Nearing End of Life
SCDigest Editorial Staff
The US interstate highway system - all 47,000 miles of it - are the trucking industy's "primary arteries of commerce," says Robert Poole Jr., of the Reason Foundation, in a new report he has just authored on how to address the country's transportation infrastructure challenges. (There are also 113,000 route-miles of other major highways not part of the federal interstate system.)
And challenges there are. The US interstate highway system was built in the 1950s and 1960s, with a design life of about 50 years - and that end-of-life scenario is here. Add to that increasing truck volumes: the US DOT forecasts there will be 40% more trucks on the road by 2045. The American Trucking Associations just recently forecast that US truck freight volumes will rise by 29% through 2026.
SCDigest Says: |
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| Key to Reason's recommendation is that on key stretches of federal highway, not only would existing roads be replaced with the latest in longer-last materials and the number of lanes expanded, but some or all of the additional lanes would be dedicated truck lanes. |
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What Do You Say?
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"Over the next two decades, most Interstates will exceed their design lives and will need to be reconstructed - their original pavement replaced, not just resurfaced," Poole writes. "In addition, the projected increase in traffic - especially truck traffic - means that many of these corridors will require additional lanes over the next two decades."
In the report, Poole says that a detailed 2013 study by Reason Foundation estimated the cost of replacing all 47,000 miles of interstates, along with selective widening, at just under $1 trillion (net present value over 20 years) - though some have said the total may be double that.
Of course, there is no identified funding source for this huge array of megaprojects. However, the Reason study analyzed the potential feasibility of financing the entire interstate replacement/modernization program via all-electronic tolling, at rates lower than those typically charged on legacy toll roads such as the Pennsylvania Turnpike.
The results showed that most states could finance the replacement and selective widening of their long-distance Interstates with tolls of just 3.5 cents/mile for cars and other light vehicles and 14 cents/mile for large trucks, as long as those toll rates were indexed for inflation. It should be noted, however, that these tolls for both cars and trucks would be levied without any change to the current federal taxes on gasoline and diesel fuel of 18.4 cents and 24.4 cents, respectively. State taxes often add another 30 cents or so to fuel costs per gallon.
So, many drivers and certainly truckers would see a substantial rise in their costs for highway support. A thousand mile load would cost carriers and shippers an extra $140 today, indexed for inflation in the future, under Reason's proposal.
Poole says one important issue is that only a portion of the monies raised from the two fuel taxes today actually go to interstate improvement. In fact, data recently published by the Government Accountability Office reveal that only about 6% of that $50 billion a year program is actually spent on "major" highway and bridge projects. The rest is dispersed for everything from local road projects to bicycle lanes.
 Reason argues that by levying tolls just on interstate highway movements, the funds raised could be dedicated for interstate maintenance and enhancement. In addition, moving to a toll-based system would neutralize the current hotly debated issue of what to do about the loss of gas tax revenue from cars with increasingly better mileage, hybrids, electrics, etc.
Another problem that some have with tolls generally is that in some areas they are operated like "cash cows," with toll revenues far exceeding operational requirements. The Reason Foundation addresses this by proposing a double set of guarantees: federal enabling legislation plus corresponding state enabling legislation that would:
1. Limit the use of the toll revenues to the newly tolled facilities.
2. Charge only enough to cover the full capital and operating costs of the tolled facilities.
3. Begin tolling only after a facility (or major portion thereof) is completed and open to traffic.
4. Use tolls instead of, rather than in addition to, current state fuel taxes.
Another barrier to this toll idea is that federal law prohibits states from imposing tolls on "existing" interstates. However, the law includes a pilot program that allows three states to each reconstruct (i.e., replace) a single Interstate using toll financing. Although Missouri, North Carolina, and Virginia each holds a slot in the pilot program, none has yet achieved political consensus on making use of it.
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