Are the Roads a True Public Good?

To toll or not to toll, that seems to be the question. If you have been following the news along the US 422 Corridor, you have undoubtedly come across, or read, an article describing the efforts of Berks, Chester, and Montgomery Counties to explore alternative funding methods for the US 422 Corridor. The most controversial proposal has been the concept of tolling what is now a “free” road. It seems that the line is being drawn in the sand, and most appear to be on the side of “no toll.” The discussion of tolling has certainly ignited civil unrest over the notion of charging a fee for a public good.

It seems that the greater debate is over whether or not we should have to pay for our transportation services. Currently, the funding for highways is from a tax levied on the sale of motor fuel. In Pennsylvania the tax equals 49.5 cents per gallon (18.4 cents per gallon is sent to the United States Department of Transportation). With that tax money, PennDOT is responsible for funding every improvement project statewide. The formulas to determine how much goes to each region of the state are complex, and at times, confusing to understand even as an industry professional. What has become painfully clear during the past few years is that we are not taking in enough money to meet the demand for expenditure. This was the impetuous for the US 422 tolling proposal, creating a direct method for funding improvements needed on the corridor.

At a higher level, the debate over funding our infrastructure should first begin with the way we perceive our infrastructure, and whether that perception needs to change. Under our current model, public owned and operated highways (excluding the PA Turnpike) are treated as a public good. Our highways, a public good, can be accessed equally, at any time, without hindrance. As a public good, each user pays equally into the system regardless of how much the highway is used. This model breaks down when a majority of society attempts to access the public good at the same time. This is what happens every morning and evening, the majority of the corridor uses the highway to travel to and from work. The phenomena can be described as “the tragedy of the commons,” which states that increased use by one individual will benefit the individual to the detriment of all. In this case, the detriment is time lost due to traffic congestion.

An alternate and more appropriate way to view our highways is not as a public good but as a public utility. Imagine if electricity was a public good; it would mean that all PECO customers would be given the same bill, divided equally among all customers. There would be little incentive to limit use of electricity, because any individual reduction would not be significant enough to lower the bill. The incentive would be to use as much electricity as possible, since it would only increase the bill ever so slightly for all. Fortunately, we do not prescribe this model to the electricity because it is a public utility: we are all given access to the resource, but we must individually pay for our use. Why can’t this model apply to our highways?

Once we begin to think of our highways as a public utility instead of a public good, the funding models make much more sense. By collecting a user fee from those that use the highway means that those drivers will be paying for its improvements. If you never drive the highway, you are not asked to pay for it. By modifying user fees during peak demand hours, the option to delay a trip to save money becomes the option of the driver, incentivizing non-essential trips to be taken during off peak trips. If it costs more money during peak times than during non-peak times, the peak hour non-essential trips will be all but eliminated, thus reducing congestion on the highway. Combined with projects to improve chokepoints, this model has the potential to make the system much more efficient.

Thinking of our highways as a public utility is a dramatic shift for the American motoring public. We have had free, unrestricted access to our highways for generations. Asking people to accept that the free ride has to end is a significant challenge, as anyone involved with the US 422 tolling proposal knows all too well. If we do move towards this model, we may find that we can improve our infrastructure in areas where the demand is demonstrated by motorists, not special interest, and we may find that the cost for improvements go down by not building unnecessarily. It is a stretch, but if we do not start to re-evaluate how we use, fund, and improve our infrastructure, the conditions on the road are not likely to improve any time soon.

Shayne Trimbell is the Manager of Projects & Development with GVF. To reach Shayne by email: strimbell@gvftma.com.

Posted in: policy,Shayne Trimbell