The Right Argument for Tolls

Aaron M. Renn, aka The Urbanophile, has an article out today about the need for tolling in Rhode Island. There’s no doubt that things in the Ocean State need some work; I was on the 195 recently and saw some terrifying levels of spalling concrete like that seen in the picture of the Warren Ave overpass. Renn pitches tolls for facilities like the Sakonnet River Bridge, and VMTs, which he calls de facto tolls.

I’ve written before about how VMTs do not make sense and do not actually solve any of the stated problems, so I don’t have anything to add there.

However, the issue of traditional tolling is another good one to discuss, and I think Renn’s article runs into trouble there. First, while tolls solve the problem of inadequate funding, they do not solve the other major issues that Renn identifies: corruption and incompetence. Toll money can be wasted just as easily as gas tax money; it does not force the state to stop deferring maintenance. There is no substitute for building competent governing institutions, and evidence would suggest Rhode Island has a ways to go with that.

Beyond that, though, Renn uses the same faulty user fee logic that I wrote about in the context of VMTs. Renn says that “it’s intuitively fair for those who use something to pay for it”, an argument frequently heard from progressive writers who don’t care for cars. As I said, this is a disastrous line of reasoning for progressive causes, since transit users don’t pay for the entire cost of transit either. We don’t provide roads “for free” any more than we provide bus service or public education for free.

There is a logical framework with which you can make an internally consistent argument that highway users should pay the entire cost of highways, but transit users shouldn’t pay the entire cost of transit. If you think that highways are not public goods, but transit is a public good, then you’re good to go. But if roads are not public goods, then there’s no reason for the public sector to supply roads at all, and the solution would be to just privatize roadways. That argument seems plausible regarding limited-access highways, but certainly not with respect to local roads and bridges.

If you think that roads are public goods, there are still arguments in favor of tolling. I think there are two, one solid and one marginal. The solid argument for tolling is congestion charging as a way of capacity management. Congestion is a negative externality of driving, and drivers should pay for it. Unlike VMTs, congestion charges account for a negative externality that cannot be properly captured by the gas tax.

The marginal argument for tolling is that users of expensive facilities, like bridges and tunnels, should pay more. This is a marginal argument because it partly relies on the faulty user fee framework. People who have children that require special education use more expensive school facilities, but we do not make them pay additional school tax. The strength of tolls for expensive facilities is that it forces local users to pay for the facility, instead of allowing them to fleece distant taxpayers who may not be paying attention, which provides an incentive to control costs. Note that this is also partly a substitute for competent governing institutions.

So again, like the gas tax, there are good reasons for tolling, but you should always think twice about the user fee approach.

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One thought on “The Right Argument for Tolls

  1. Pingback: LA blogger: Why RI needs ‘competent governing institutions’ | WPRI.com Blogs

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