Steve Heminger Executive Director Metropolitan Transportation Commission Transportation Research Board Executive Committee June 17, 2005 TOLL: The Four Letter Word of Transportation Finance

Gas Tax is a Goner  No federal rate increase since 1993  Less than 1 / 2 of states have raised their state gas tax since 1993  6 states with tax hikes were due to automatic indexing

Fuel Efficiency Stalls Out Source: U.S. Environmental Protection Agency, 2004

Explosive Growth of SUVs Source: U.S. Environmental Protection Agency, 2004 Light Duty Vehicle Sales Trends by Vehicle Type

Far Higher Gasoline Prices Abroad Source: International Energy Agency, 2005 Gasoline Prices for Selected Countries

Retail Gasoline Prices Dwarf Tax Rate Source: Energy Information Administration, FHWA, 2005

“Read my Lips: No New Taxes” — George H. W. Bush, 1988 “Read my Lips: No New Taxes” — George H. W. Bush, 1988

“Pay As You Go” System  Stopped paying — no political will for tax hikes  Stopping going — mounting traffic congestion and repair backlogs

False Trail: The General Fund Annual U.S. Transportation Spending Source: The Brookings Institution, 2003

Growing Reliance on Non-User Fees Source: Surface Transportation Policy Project, 2002 Type of Revenue Change Percent Change State Borrowing ($ in millions) 92 $4,316$ 8,298$3,982 Other Local Taxes Includes Sales Taxes$ 4,487$ 7,079$ 2, Other State Taxes$ 6,565$ 8,560$ 1, Local General Funds$ 12,326$ 15,857$ 3, Local Property Taxes$ 5,220$ 6,384$ 1, State User Fees$36,200$42,730$6,530 18

Original Toll Concept — River Chains

U.S. History of Toll Roads 1656 First toll bridge — Newbury, Massachusetts 1785 First turnpike — Little River Turnpike, Virginia 1822 President Monroe vetoes bill authorizing collection of tolls from road users 1850 Hundreds of private turnpike companies operate thousands of miles of roads in most states Continued next slide

1920 – 40 Major urban toll facilities completed, such as New York’s Holland Tunnel and San Francisco’s Golden Gate Bridge 1940 Pennsylvania Turnpike opens, followed by state toll road authorities in Maine, New Jersey, Ohio, Connecticut and Florida 1956 Congress approves Federal-Aid Highway Act, providing for a fuel tax-based financing mechanism to construct the interstate system U.S. History of Toll Roads (cont’d) Continued next slide

1980 – 1990 States create facility-based toll authorities to supplement interstate highway capacity, such as TCA roads in Orange County, California and E-470 in Denver, Colorado 1991 Congress passes ISTEA legislation which authorizes limited state experimentation with toll- based congestion pricing 1995 – present Metropolitan regions experiment with High- Occupancy Toll (HOT) Lanes in California, Texas, Minnesota, and Colorado. U.S. History of Toll Roads (cont’d)

Source: FHWA (est.) Toll collection lanes with electronic toll collection capability Electronic Toll Collection: The Great Enabler

Congestion Tolls ProjectTypeStatus SingaporeCordonOperational 1975 NorwayCordonOperational 1986 LondonCordonOperational 2003 Orange County, SR 91HOTOperational 1995 San Diego I-15HOTOperational 1996 Houston Katy FreewayHOTOperational 1998 Minneapolis I-394HOTOperational 2005 Denver I-25HOTPlanned 2005 Seattle Route 167HOTPlanned 2007 Alameda County I-680HOTPlanned 2009 Source: Institute of Transportation Studies, UCLA

Weight-Distance Truck Tolls ProjectStatus Swiss “HVF” Truck TollOperational 2001 Austrian “GO” Truck TollOperational 2004 German “Toll Collect” Truck TollOperational 2005 U.K. Truck TollPlanned 2007 Bristol Truck Toll/Cordon TollTrial Project Australian “Austroads” MonitoringPlanning Phase Source: Institute of Transportation Studies, UCLA

Press Overreaction

“ Tolls are a polite form of highway robbery. ” — Bill Lockyer, California Attorney General “ Tolls are a polite form of highway robbery. ” — Bill Lockyer, California Attorney General Legislative Resistance

Free Lunch Mentality