CITY/STATE: Why Rhode Island Needs Tolls
Monday, July 15, 2013
Rhode Island certainly has plenty of company here. According to Standard and Poors, the US has an accumulated infrastructure spending deficit of $2.2 trillion. Beyond the Sakonnet, an estimated 70,000 bridges need replacing nationwide. Needs range from replacing Cleveland’s decaying Innerbelt to a major transit rail investment need in New York City to upgrading America’s air traffic control systems.
Gridlock and fiscal pressures in Washington, America’s traditional infrastructure financier, compound the problem. As the Washington Post noted last year, “The bill for all that, and more, eventually will land on taxpayers’ doorsteps. But the postmark won’t read ‘Washington.’ Instead, the tax bill will come from state or local governments struggling to fill the growing void in federal funding.” Gridlock makes it difficult to get anything done at the federal level, leading to default policies like sequestration. But even if Congress did start making progress, huge fiscal imbalances (the “good news” is that our 2013 deficit will be “only” $759 billion) mean it’s unlikely the feds are going to be paying for this.
That leaves states like Rhode Island on their own. And of course Rhode Island itself isn’t exactly rolling in cash to finance all this. Given that when the state was in better fiscal shape it managed to neglect non-cash matters like funding its pensions and keeping up with bridge maintenance, it’s hard to see how this possibly changes in the future. Politicians at some point will take the easy way out and defer maintenance until we have another Sakonnet situation.
Given what happened last time, it’s to their credit that local officials looked for ways to prevent a repeat. Given the obvious extreme blowback it would generate, even proposing to put tolls on the bridge was a politically courageous move, something few people around here seem to give our leaders credit for.
Let’s put this in context. Tolling has been on an upswing nationally. There’s a need to finance infrastructure and the idea of making the people who drive on a road or bridge pay for it is intuitively fair. Increased fuel efficiency and the rise of alternative fueled vehicles – including all electric cars like the Chevy Volt or Nissan Leaf – have put pressure on gas tax receipts and have broken the rough linkage between gas in the tank and road use that made the gas tax a good toll substitute. Also, with the rise of electronic toll collection (EZ-Pass), charging tolls no longer need be an invasive process. Hence tolling has become more popular.
New toll roads have been proposed or built in places as diverse as Virginia, Texas, and California. Federal law makes it difficult to retroactively add tolls to roadways but cities and states have found ways to fund major infrastructure programs out of their existing toll facilities. The state of Indiana leased its toll road to a private consortium for $3.9 billion to fund an infrastructure program called Major Moves. And Ohio has issued bonds backed by Ohio Turnpike revenues. And Oregon is also experimenting with “pay per mile” driving taxes, which are tolls by another name.
Those who use the Sakonnet River Bridge will complain that other people don’t have tolls and so it’s unfair for them to have to pay for their infrastructure when other people don’t. There is some fairness in that complaint. On the other hand, the state did just build them a $163 million bridge, a bridge the rest of the state’s residents will rarely if ever drive on. And many of our cities and towns face critical infrastructure needs of their own the state did not fund in order to provide the money to build this bridge. The communities served by this bridge are in general better off than the rest of the state. Newport County’s median home values and household incomes are higher than the rest of the state and its poverty rate is lower. To increase taxes on the rest of the state in lieu of tolling would represent an income transfer from the state’s poor to the benefit of the more well off, particularly considering the regressive nature of gas and car registration taxes. In a tolling scenario, lower income commuters using the bridge could potentially be provided toll relief through needs based assistance to help reduce the impact.
There’s no such thing as a totally fair system. However, many if not most major bridges and tunnels in the Northeast are already tolled. Major bridge crossings like the Sakonnet are ideal for tolling from a technical perspective because of a general lack of alternate routes, so trucks can’t easily divert down neighborhood streets and such to avoid paying.
Additionally, as a rule we should be moving towards user fee systems for roadways. For too long we’ve given away roads “for free,” resulting in congestion, sprawl, environmental degradation, and yes, crumbling infrastructure. All of these come in part because we do not pay the full cost of the driving trips that we make. Pretty much anything we only indirectly pay to consume ends up over-used and under-maintained. That’s the tragedy of the commons.
It’s intuitively fair for those who use something to pay for it. Given the condition of the state’s infrastructure, federal and state finances, and a proven track record of failure in maintenance, tolling, though painful, is the most rational option not just for the Sakonnet River Bridge, but for other pieces of infrastructure where it is feasible. This shouldn’t be seen a singling out of the East Bay, but rather as the first step in what will likely be a much more expansive use of tolls to finance critical infrastructure needs, not just in Rhode Island, but around the nation.
Aaron M. Renn an opinion-leading urban affairs analyst, entrepreneur, speaker, and writer on a mission to help America’s cities thrive in the 21st century. In his blog, The Urbanophile, he has created America’s premier destination for serious, in depth, non-partisan, and non-dogmatic analysis and discussion of the issues facing America’s cities and regions in the 21st century. Renn’s writings have also appeared in publications such as Forbes, the New York Times, and City Journal. Renn is also the founder and CEO of Telestrian, a data analysis platform that provides powerful data mining and visualization capabilities previously only available in very expensive, difficult to use tools at a fraction of the cost and with far superior ease of use.
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