Tolling Has Promise as an Approach for Enhancing Mobility and for Financing Transportation

As congestion increases and concerns about the sustainability of  traditional roadway financing sources grow, tolling has promise as an  approach to enhance mobility and to finance transportation. Such tolls can create additional  incentives for drivers to avoid driving alone in congested conditions when  making their driving decisions. In response, drivers may choose to share  rides, use public transportation, travel at less congested (generally off- peak) times, or travel on less congested routes, if available, to reduce their  toll payments. Tolling is also consistent with the important user pays  principle, can potentially better target spending for new and expanded  capacity, and can potentially enhance private-sector participation and  investment in major highway projects. Some States Use Tolling to Address Funding Shortfalls, Finance New Capacity, and Manage Congestion; Other States Find Tolling Not Feasible or Have Made Other Choices

Officials in most states planning toll roads indicated that the primary  reasons for considering a tolling approach were to address what state  officials characterized as transportation funding shortfalls, to finance and  build new capacity, and to manage congestion. Both interstates are major  freight routes where truck traffic is expected to continue to increase. Applying tolls that vary  with the level of congestion—congestion pricing—can reduce congestion  and the demand for roads because tolls that vary according to the level of  congestion can be used to maintain a predetermined level of service. Many States Find That Tolling Is Not Feasible or Have Made Other Choices

The reason most frequently cited by state transportation officials for not  tolling is that tolling is not feasible. In some states, tolling is not considered  because toll revenues would not cover the costs of projects. Under this definition, most roads would not generate sufficient revenues  from tolls to fund new highway capacity. States That Are Considering and Implementing a Tolling Approach Face Two Broad Types of Challenges

Drawing on our analyses of states’ experience with tolling and on a review  of selected published research on tolling, we have identified two broad  types of challenges that transportation officials have encountered when  attempting to implement tolling: (1) the difficulty of obtaining political and  public support in the face of opposition from the public and political  leaders and (2) the difficulty of implementing tolling given a lack of, or  overly restrictive, enabling toll legislation; concerns about potential traffic  diversion resulting from toll projects; and a need to coordinate with other  states and regions when toll projects cross jurisdictional boundaries. Some studies have also reported  this challenge. Double taxation arguments. States have a number of dedicated sources of revenues that are used  to finance highway capital programs. Secure the authority to toll. Building support. This legislation facilitates  tolling by realizing two goals—to expand the use of tolling and to  leverage tax dollars by allowing state highway funds to be combined  with other funds to build toll roads. Providing leadership. Select a Tolling Approach That Provides Tangible Benefits to Users

When proposing a tolling approach, transportation officials should  consider promoting one that will produce tangible benefits to users while  justifying both the costs of the project and the fees that users will be  required to pay for the service. For example, to  guarantee free-flowing traffic, toll prices on the Interstate 15 HOT lanes  project are set dynamically, changing every 6 minutes to keep traffic  flowing freely in the HOT lanes. Regardless of the demand for highway improvements, sustained, long-term,  large-scale increases in federal highway grants and state and local spending  seem unlikely. Agency Comments and Our Evaluation

We provided a draft of this report to the Department of Transportation for  review and comment. Objectives, Scope, and Methodology

The objectives of this report were to examine (1) the promise of tolling to  enhance mobility and finance highway transportation, (2) the extent to  which tolling is being used in the United States and the reasons states are  using or not using this approach, (3) the challenges states face in  implementing tolling, and (4) strategies that can be used to help states  address the challenges to tolling. Thus, donor states are statistically more likely to be  planning toll roads than donee states—those states that receive more in  grants than they collect.
Why GAO Did This Study

Congestion is increasing rapidly across the nation and freight traffic is expected to almost double in 20 years. In many places, decision makers cannot simply build their way out of congestion, and traditional revenue sources may not be sustainable. As the baby boom generation retires and the costs of federal entitlement programs rise, sustained, large-scale increases in federal highway grants seem unlikely. To provide the robust growth that many transportation advocates believe is required to meet the nation's mobility needs, state and local decision makers in virtually all states are seeking alternative funding approaches. Tolling (charging a fee for the use of a highway facility) provides a set of approaches that are increasingly receiving closer attention and consideration. This report examines tolling from a number of perspectives, namely: (1) the promise of tolling to enhance mobility and finance highway transportation, (2) the extent to which tolling is being used and the reasons states are using or not using this approach, (3) the challenges states face in implementing tolling, and (4) strategies that can be used to help states address tolling challenges. GAO is not making any recommendations. GAO provided a draft of this report to U.S. Department of Transportation (DOT) officials for comment. DOT officials generally agreed with the information provided.

What GAO Found

Tolling has promise as an approach to enhance mobility and finance transportation. Tolling can potentially enhance mobility by reducing congestion and the demand for roads when tolls vary according to congestion to maintain a predetermined level of service. Such tolls can create incentives for drivers to avoid driving alone in congested conditions when making driving decisions. In response, drivers may choose to share rides, use public transportation, travel at less congested times, or travel on less congested routes, if available. Tolling also has the potential to provide new revenues, promote more effective investment strategies, and better target spending for new and expanded capacity. Tolling can also potentially leverage existing revenue sources by increasing private-sector participation and investment. Over half of the states in the nation have or are planning toll roads to respond to what officials describe as shortfalls in transportation funding, to finance new highway capacity, and to manage road congestion. While the number of states that are tolling or plan to toll has grown since the completion of the Interstate Highway System, and many states currently have major new capacity projects under way, many states report no current plans to introduce tolling because the need for new capacity does not exist, the approach would not generate sufficient revenues, or they have made other choices. According to state transportation officials who were interviewed as part of GAO's nationwide review, substantive challenges exist to implementing tolling. For example, securing public and political support can prove difficult when the public and political leaders argue that tolling is a form of double taxation, is unreasonable because tolls do not usually cover the full costs of projects, and is unfair to certain groups. Other challenges include obtaining sufficient statutory authority to toll, adequately addressing the traffic diversion that might result when motorists seek to avoid toll facilities, and coordinating with other states or jurisdictions on tolling projects. GAO's review of how states implement tolling suggests three strategies that can help facilitate tolling. First, some states have developed policies and laws that facilitate tolling. For example, Texas enacted legislation that enables transportation officials to expand tolling in the state and leverage tax dollars by allowing state highway funds to be combined with other funds. Second, states that have successfully advanced tolling projects have provided strong leadership to advocate and build support for specific projects. In Minnesota, a task force was convened to explore tolling and ultimately supported and recommended a tolling project. Finally, tolling approaches that provided tangible benefits appear to be more likely to be accepted than projects that offer no new tangible benefits or choice to users. For example, in California, toll prices on the Interstate 15 toll facility are set to keep traffic flowing freely in the toll lanes.