	Introduction

Since FY2008, federal highway user taxes and fees have been inadequate to fund the surface transportation program authorized by Congress. Although the 2015 surface transportation act addressed the revenue shortfall through FY2020 by authorizing the use of general funds for transportation purposes, the Congressional Budget Office (CBO) projects that after FY2020 the gap between dedicated surface transportation revenues and spending will average $20 billion annually. The search for revenue to fill this gap may revive congressional interest in tolling as a means of financing transportation projects without federal expenditures. Although states are free to impose tolls on roads, bridges, and tunnels that have been built and maintained without federal assistance, federal law limits the imposition of tolls on existing federal-aid highways, especially on the Interstate Highways. 102-240 ) opened non-Interstate federal-aid highways to tolling, but allowed existing roads or bridges to be tolled only after being reconstructed. The Fixing America's Surface Transportation Act (FAST Act; P.L. Financial Realities of Toll Roads

Whether it is built or operated by a government agency or by private investors, a toll road must have sufficient traffic willing to pay a high enough toll to cover construction, maintenance, and toll collection costs if it is to be financially successful. In rural areas, highways often do not have enough traffic to cover the cost of building toll-collection infrastructure and collecting tolls. Other public toll facilities, however, have struggled. Collecting federal motor fuels taxes is estimated to cost about 1% of the amount collected. In principle, the cost of operating an electronic tolling system should be much lower than the cost of manual collection, due to obvious personnel savings. There are three possible means of increasing revenue from tolling:
Increase the extent of toll roads. Trucking interests frequently raise opposition to rate changes that increase truck tolls relative to automobile tolls. Additionally, large increases can encourage motorists to use competing non-tolled routes. These factors suggest that imposing tolls on individual transportation facilities is likely to be of only limited use in helping states overcome reductions in federal grants should Congress deal with the shortfall in motor fuels tax revenue by reducing the size of the federal surface transportation program. Increased Use of Tolling to Encourage Innovative Finance

The revenue stream provided by tolling can be used to support highway projects that rely on debt finance and private equity investment, both of which have long histories in toll road construction. This paradigm would have the advantage of assuring that all states would begin imposing tolls at roughly the same time, and federal leadership would likely not allow the outbreak of "toll wars" among the states, whereby states attempt to impose toll rates in a way that shifts the burden of the toll to their neighbors or interstate travelers generally. More widespread use of tolls is likely to raise significant questions about equity. Some existing facilities offer preferential toll rates to residents of particular jurisdictions; if that practice were to become widespread, it could burden interstate travel and commerce. States may be tempted to collect tolls at state borders rather than at internal locations where more residents would be affected, effectively taxing interstate travel at higher rates than in-state travel and in some cases putting out-of-state companies at a competitive disadvantage against local companies. Proposals for a major expansion of tolling of federal-aid highways are likely to lead to discussion of a federal role in rate-setting. Deeper federal involvement might include a federal framework of regulatory standards or a more precise definition of the requirement in current law that tolls be "just and reasonable," along with provision for the enforcement of that requirement.
Toll roads have a long history in the United States going back to the early days of the republic. During the 18th century, most were local roads or bridges that could not be built or improved with local appropriations alone. During the tolling boom of the late 1940s and early 1950s, the prospect of toll revenues allowed states to build thousands of miles of limited-access highways much sooner than would have been the case with traditional funding. The imposition of tolls on existing federal-aid highways is restricted under federal law, and while new toll facilities have opened in several states, some of those projects have struggled financially.
The failure of federal highway user taxes and fees to provide sufficient revenues to fund the surface transportation program authorized by Congress beginning in FY2008 renewed interest in expanded toll financing. The recently passed five-year surface transportation act, the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94), made few changes in tolling policy. Nonetheless, the Congressional Budget Office (CBO) projects that annual highway revenues, mostly from motor fuels taxes, will fall an average of $20 billion short of the amount needed to sustain the current federal surface transportation program between FY2021 and FY2025. This impending shortfall could again revive congressional interest in tolling.
Congress could achieve an expansion of tolling in several ways. At one extreme, it could simply encourage tolling pilot projects on federal-aid highways, of which relatively few have been implemented to date. At the other extreme, Congress might authorize states to toll federal-aid highways as they see fit, or even require that Interstate Highway segments be converted to toll roads as they undergo reconstruction in the future, eventually turning all Interstates into toll roads.
Whatever policies Congress adopts, tolls are likely to play only a limited role in funding surface transportation projects. The costs of toll collection on many existing toll roads exceed 10% of revenues even if all tolls are collected electronically, not including the cost of toll collection infrastructure. This compares unfavorably to the cost of collecting the existing federal motor fuels taxes, estimated to be about 1% of revenues. Many roads may not have sufficient traffic willing to pay a high enough toll to cover construction, maintenance, and toll collection costs. The availability of competing non-tolled routes may allow motorists to evade tolls. In addition, political concerns often limit the ability of operators to raise toll rates.
Beyond a requirement that bridge tolls "shall be just and reasonable" and a provision limiting tolls on over-the-road buses, current federal law provides no role for the federal government in regulating toll rates or practices. A number of states offer preferential tolls for in-state residents or residents of particular localities. Some states have attempted to collect tolls at borders rather than at internal locations where more residents would be affected, and in a number of places trucking interests have complained that truck tolls are excessive compared to auto tolls. More widespread use of tolls is likely to raise questions about the extent to which tolling should be subject to federal oversight.