Posted on 01/14/2008 2:00:05 PM PST by decimon
Privatizing toll roads in the U.S. may result in significant diversions of truck traffic from privatized toll roads to "free" roads, and may result in more crashes and increased costs associated with use of other roads, according to a new study.
Peter Swan of Penn State – Harrisburg and Michael Belzer of Wayne State University will present the findings of their study, "Empirical Evidence of Toll Road Traffic Diversion and Implications for Highway Infrastructure Privatization" on Jan. 14 at the 87th annual meeting of the Transportation Research Board in Washington, D.C.
The study used data from the State of Ohio, the Federal Highway Administration, and the Ohio Turnpike to predict annual Turnpike truck vehicle miles traveled, and therefore diverted vehicle miles, based on National truck traffic and Turnpike rates. The researchers then compare estimated truck traffic diverted from the Turnpike to truck traffic on Ohio road segments on possible substitute routes.
Both economic models support the hypothesis that rate increases divert traffic from toll roads to "free" roads.
"While recently privatized roads do not have enough history to determine how high actual rates will rise, adequate data do exist to determine what happens when toll rates increase dramatically on state-run toll roads," says co-author Peter Swan, Assistant Professor of Logistics and Operations Management at Penn State's Harrisburg campus.
The study concludes that if governments allow private toll road operators to maximize profits, higher tolls will divert trucks to local roads, depending on the suitability of substitute roads. The authors estimate that for 2005, a for-profit, private operator of the Ohio Turnpike could have raised tolls to roughly three times what they were under the public turnpike authority, resulting in about a 40% diversion of trucks from the Ohio Turnpike to other roads.
"The Ohio Turnpike substantially increased tolls during the 1990s to help finance construction of a third lane in each direction over substantial portions of the Turnpike," the researchers say. "Because the Ohio Turnpike raised its rates for trucks in the 1990s and later lowered them again, sufficient data exist to calculate a demand curve for the Turnpike based on demand and the toll rate. We then use the resulting demand curve to estimate diversion of trucks caused by the changes in the toll rates and to forecast how toll rates might affect Turnpike truck revenue."
The number of diverted trucks is important to both the State of Ohio and the Nation for economic and social reasons.
First, many of the substitute roads are two-lane highways with crash rates many times that of the Turnpike. Second, the increased traffic has reduced the quality of life for communities located along diversion routes and dramatically increased the maintenance costs of many of these roads, say the researchers.
Finally, higher truck tolls have two negative effects on the economy. Motor carriers eventually pass all tolls to consumers in the form of higher prices for goods. While higher toll rates may not decrease the efficiency of non-diverted trucks, they have raised costs.
Furthermore, diversion reduces the efficiency of these trucks because they clearly are taking a second-best route. The resulting loss of efficiency can stifle economic activity, according to the study.
Many of these economic and social costs may not be considered in future leases or sales, especially when such costs are paid by people in states other than the one making the lease agreement.
The study researchers question whether it makes good policy sense to substitute the existing fuel tax-based system of funding road infrastructure with a system that uses widespread tolls and to grant long-term leases to private enterprises that will operate them for profit.
"The combination of inadequate maintenance, lack of capital for new capacity, and ever-growing demand has led to renewed calls for tolls," Swan and Belzer state. "It is curious that national policy clearly supports sales or long-term leases of roads to private parties when such negative results can be expected.
"It does not appear that the U.S. Department of Transportation has considered how far tolling and highway privatization should go ... how such a market-based system of interstate highways will affect the parallel system of publicly-owned state and local roads ... or the effect of private tolling on interstate commerce - unless U.S. DOT is already committed to the toll-based funding for all roads."
"If the true problem is that political leaders are unwilling to face the voters with the reality that there is no free lunch, then the problem we seek to solve by tolling and privatization will not solve the problem at all. In fact, our research suggests that it will only make the problem worse," Swan and Belzer say.
‘In fact, our research suggests that it will only make the problem worse,”
I’m quite shocked, really I am. I mean the whole concept that selling a road to a foreign owned company isn’t a good idea is sooo hard to fathom.
/sarc
Why in the sam hell would we sign on to privatizing roads our gas taxes paid for? What the hell is wrong with people?
We slam everyone for raising taxes, then we gleefully anticipate toll booths across this great nation.
Just damn. Is everyone on prozac but me?
While we’re on the subject of toll roads, a new exit has fairly recently sprung up on a section of the Pennsylvania Turnpike that I frequent, which is restricted to EZPass vehicles only. What do FReepers think about publicly financed roads that have sections which you cannot legally drive on without having your vehicle’s movement tracked and recorded by the government. I find it pretty disturbing. I understand there’s a cost-saving issue with having full-time toll collector coverage at a little used exit. However, if an exit gets so little use that it doesn’t warrant one toll collector on duty, I don’t know if it really warrants the road contruction and maintenance costs either.
“We slam everyone for raising taxes, then we gleefully anticipate toll booths across this great nation.”
The amount of money these toll roads rake in is pretty amazing. One here in Central Florida rakes in a million dollars a day. They sure don’t spend $300 million a year on keeping it up.
Demand those toll booths to be removed. It’s nothing but bald face tyranny.
Those booths go against everything we stand for.
Toll roads require additional construction for toll booths,adinistration etc. Gas taxes require nothing more than we already have.
You do the math.
You’re damn straight they don’t. First they steal your gas taxes. Then they toll you to death. Then they misdirect those tolls as well. And then they spout the need to raise taxes anyway, or else cut state parks, libraries, police or fire staff, and schools.
It’s time to start figuratively stringing up some of our political officials.
We need to roll back this nonsense, and today is a great day to start.
Well, in Indiana, we got almost $4 billion for our toll road. Cash. Our state can use that money to fund construction projects throughout the state to improve congestion and increase the quality of our state's roads. Seems like a good reason to me.
Well it isn’t. That road is your property. You sell it and you’ll pay out 20 billion and you’ll still be paying.
If your state needs $4 billion, it can find it within the current budget after it cancels the liberal graft.
Don’t sucker for this. This is one road. Next it will be every other road and every other bridge. Don’t do it.
I don’t have a problem with toll roads, as long as they don’t have the effect of really blocking travel between any two points to anyone not using them and paying the toll. They seem consistent with the principle of expecting people to pay their own way rather than government (read: taxpayers) providing them with everything they want, including a huge network of well-maintained highways.
Theoretically, private toll roads are okay with me too, as long as the private owner/buyer has to pay legitimate market rate for them, and no eminent domain is or was used in acquiring the land for them. In practice, of course, that means none of the currently proposed private toll roads would get my support. But if a private party wanted to buy up land on the free market, build a road on it, and charge the public to use it, that would be fine with me. Private property is private property and the owner should be free to decide who may enter it and on what terms.
It’s called “asset management”, where a government turns over a public resource to a private company for management and maintenence. A lot of municipalities in Florida do that with bridges, since we have a lot of moveable drawbridges. I do not believe that ‘private’ toll roads would be free if they were not in asset management - the tolls are a mitigation of roadway costs so they don’t have to sell as many bonds to pay for them.
How about we lease the road, keep the $4 billion, and still cut graft? Then we've got even more money.
That road is your property.
Still is. The road is on a 75 year lease.
This is one road. Next it will be every other road and every other bridge. Don’t do it.
Ok, I'll bite: so what? I wouldn't oppose private ownership of roads. It would probably tend to make the system more efficient.
It’s called ripping you off. Your gas taxes paid for the highway. Now you’re going to let the state sell it, you’ll still get charged to travel down the highway, and you’ll still pay gas taxes.
Heavens, if I were a state official and I knew folks were that well challenged, I’d probably try to sell this plan too.
Bud, you already paid for the highway. Now you’re going to pay a private concern to use it. And on top of that, you’ll pay gas taxes which WILL NOT be used for maintenance on the highway.
You have gifted the state the cost of the highway, they sold it, you’ll still be charged to use it, and you’ll still be paying taxes.
Let’s take your example to the extreme if it’s a good idea.
Sell every road in the state. Then let the state still collect your gas taxes, and then pay tolls on all the highways.
Tell me what the gas tax will then be used for?
Not to fund the "sold" highway, though. That's what the tolls are for. As it was, the people of the state of Indiana were subsidizing interstate traffic from the east coast to Chicago. We don't do that any longer, and a company gave us $4 billion. Thanks, Mitch.
Mitch, how much did your gas taxes go down?
And Mitch, please... we all subsidize out of staters on our highways. And they subsidize us on theirs.
I won't be paying taxes for the maintenance of that road; I'll be paying taxes for the construction and the maintenance of other roads in Indiana. Moreover, my taxes would be other than they otherwise would be because the state is using the $4 billion (and the $7/second in interest that it earns on the money) to fund construction projects throughout the state, like the Super 70 project or the extension of I-69.
Because no government agency on any level wants to spend money on roads. Not sexy enough.
We are heading to a day where it will be impossible to drive from state to state with out "papers" from some private firm.
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