1. Rebuilding Our Nation’s Aging Interstate System
Ed Regan
Senior Vice President
Rebuilding Our Nation’s Aging Interstate System
Why Tolling May Be a Big Part of the Solution
August 14, 2017
Presented at:
SASHTO 2017
Norfolk, VA

2. The US Interstate Highway System
47,000 miles of mobility, connectivity and economic vitality
Most important Transport investment in US history
Most of it is years old!!

3. The Original Plan: Tolls
The Interstate system was originally conceived as a toll system
Franklin Roosevelt envisioned a system which would be “self liquidating” thru tolls and sale of property rights
Biggest concern was low traffic demand in some states
About 3000 miles of the system had already been built (or financed) as toll roads thru the 1950’s

4. The 1956 Program: No Tolls
Ultimately built without tolls; funded largely through the Federal gas tax
Cost $132 billion to build; $119 billion in Federal funds
The Federal government conceived it, largely funded it, but owns virtually none of it
The states are left holding the bag
Key question: who pays for the next 50 years, and how do we fund the rebuilding of this great national asset?

5. Arguments Against Interstate Tolling
The interstate system is critical to interstate commerce and connectivity
It is; exactly why it demands huge investment for reconstruction, rehabilitation and expansion for the next 50 years
Toll booths cause congestion and safety risks
Not any longer with the advent of non-stop all-electronic tolling
The Interstates are already paid for!
Lets take a closer look at that one

6. They Are Already Paid For???
Collectively, the states currently spend over $25 B per year on Interstate System reconstruction, expansion and maintenance;
Every five years, states spend more than the entire original cost to build the whole system
And today the federal share is only about 40% -- not 90%
Projecting 50 years forward, the total expenditures devoted to the Interstate System will likely exceed $2.5 Trillion
Reconstruction alone will likely require about $1.5 Trillion
And unlike in 1956, your states will have to pay the bulk of it!!
State
Federal
Original
System Cost
Future Maintenance, Expansion and
Reconstruction Cost by Decade

7. The Coming Collapse of the Gas Tax Estimated Combined Federal and State Gas Tax Revenue (2015 dollars – average $0.45 / gallon combined)
$9.0B
$20.8B
$44.6B
$32.3B
$39.3B
Approximate Annual Gas Tax Revenue (Billions, 2015)
(Assumes Overall Average State and Federal Tax of $0.40/Gallon)
With Current MPG
With EIA Ref Case MPG
With "Bloomberg" EV Adjusted MPG
With "High End" EV Adjusted MPG

8. States Need New Funding Sources – But Why Tolling?
Tolling supports growing need to shift toward direct user fees as fuel efficiency increases
Tolling supports emerging shifts in infrastructure funding
Including increased use of P3’s
Tolling establishes a more direct link between those who pay and those who benefit
Tolling can ensure all interstate route users pay their fair share
Including those who might pass entirely through a state without buying gas
Tolling provides a new revenue choice for states
With over $2 Trillion needed to rebuild and preserve the Interstate System, and declining support from Washington… you will need new choices!
… and it’s sustainable, even with coming all electric autonomous vehicles in the future

9. All-Electronic Tolling (AET)
AET Makes it Easy
No toll booths
Non-stop, cashless collection
Electronic toll users
Video tolling for non-ETC
traffic
Can be easily implemented as
gantries across existing roads
Without causing congestion, pollution and wasted fuel
Key challenge: Need for national toll interoperability and interstate toll collection enforcement

10. Relaxing Federal Restrictions
Use of tolls on existing toll free interstate routes has been prohibited by Federal law for over 50 years
But restrictions have been gradually relaxed over the last 20 years through various pilot programs and changes in law
Today, Interstate Tolling is Permitted on
New IS routes, or new capacity on existing routes
Bridges being replaced or rehabilitated
Congested routes (in designated VPPP states)
Managed lanes, including HOV to HOT conversions
Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP)
Program has existed for more than 10 years
Limited to one route in each of three states – all slots issued at least once
FAST Act introduces a “use it or lose it” provision
But…. not one of the states designated for the pilot have ever actually introduced tolls

11. ISRRPP – So Why No Tolls After More Than a Decade?
Missouri (I-70) – Tolls prohibited in state Constitution; amendment requires voter approval which has not been achieved
Virginia and North Carolina (I-95) – both states have released their slots after FAST Act
Common factors delaying deployment of tolling:
Just as much political resistance at the state level as in Congress
ISRRPP is limited to one route in each state- causes local resistance battle cry “Why are we the only ones being tolled”
Fear of impacts on economic competitiveness (including between states), less of an issue if more than isolated states could add tolls
Aggressive opposition from trucking industry – including threats of economic impacts among local residents
ISRRPP is the most restrictive program of all Interstate tolling exemptions in terms of revenue use

12. Challenge with Public Acceptance
Overall there is less public opposition to user fees than perceived by elected officials
An important disconnect
In general, surveys nationally find more support for increased use of tolling than increases in gas and other tax levies
Notable exception: trucking industry which favors gas tax increases
Considerable public support for tolling “new capacity”
However considerable opposition to adding tolls to existing free roads
Major issue since biggest funding need in the future will be to “rebuild” existing roads
But Support May be On the Rise

13. Connecticut Interstate Tolling Study

14. Recent Developments
Increasing pressure by states on Congress to eliminate or reduce Federal restrictions on tolling interstates
States are running out of options and they are left holding the bag for the “next 50 years”
Several states seriously considering widespread interstate toll deployment
Rhode Island moving forward with bridge replacement tolls for heavy trucks -- bridge toll exemption
Connecticut close to approving widespread AET tolls on several interstate corridors -- VPPP state exemption
Oregon legislature mandates detailed plan of congestion pricing on I-5 and I VPPP State exemption
Indiana legislature calls for study of interstate tolling – possibly bridge toll exemption
Wisconsin considering interstate tolling after completion of study

15. Where We May be Headed
Gradual continued Congressional relaxation of federal restrictions
This may be inevitable-almost no other viable options
But it won’t be easy
Eventually Congress may remove current restrictions
Enable states to add tolls at their option
Will require all-electronic tolling (no toll booths)
Will require national interoperability
If only one-third of the interstate miles in US becomes tolled, it will increase mileage of toll roads in the US four-fold
Number of vehicles with ETC devices increases from 48 million today to more than 100 million in 10 years

16. What if the SASHTO States Tolled Their Interstate Highways?
Kentucky
Virginia
North Carolina
Georgia
Alabama
Arkansas
Tennessee
Florida
South Carolina
Mississippi
Louisiana
Texas
West Virginia
How about $21 billion per year in new revenue

17. Interstate Tolling Revenue Potential in SASHTO States Cars: $0
Interstate Tolling Revenue Potential in SASHTO States Cars: $0.05 per mile Trucks: $0.12 per mile (2011 Dollars)
Trucks
Passenger Cars
Note: Excludes revenue from existing toll roads.

18. SASHTO Region Net Revenue Summary Ten Year Annual Average (2020-2030)
Trucks 39.1%
Cars
60.9%
Collection Cost
Net Revenue
Rural
49.5%
Urban
50.5%

19. One Unlikely Possibility?
Convert the $0.184 per gallon Federal gas tax (and the Fed. Diesel tax) to a user fee (toll) on the interstate system
The gas tax is not sustainable;
Nor is the HTF as we currently know it
Could refocus FHWA on rebuilding the interstate system
It will likely consume over half of all transportation investments in the next 50 years
It could be costly
Over 16,000 AET gantries needed for the national system; more than $50 billion to implement and equip
But if the whole system was assessed a user fee, national tolling could be accomplished by equipping all US vehicles with GPS on board units for about the same cost or less
The German national truck tolling system is done this way

20. Average Annual Toll Revenue (2020-2040, 2011 Dollars)
What If Congress Converted the Federal Gas Tax to a Toll on the Entire US Interstate System
Average Annual Toll Revenue ( , 2011 Dollars)
Revenue Distribution
Trucks 37.5%
Cars
62.5%
Passenger Cars
Trucks
Approximate
Revenue From
Federal Gas Tax
Collection Cost
Rural
45.2%
Urban
54.8%
Net Revenue
Cars
Trucks
$0.04
$0.10
$0.06
$0.15
$0.08
$0.20
* Includes both federal gasoline tax and diesel tax

21. But Since that Probably Won’t Happen…
Our states will still need to worry about rebuilding our interstates
One step at a time
The states will be left “holding the bag”
And they will likely collectively spend well over $2 trillion on the interstate system in the next 50 years!!
It’s a real problem… and tolling may just be a real solution.

22. Thank You
Ed Regan