What GAO Found
United States Government Accountability Office
Why GAO Did This Study
Highlights
Accountability Integrity Reliability
June 2006
HIGHWAY FINANCE
States’ Expanding Use of Tolling
Illustrates Diverse Challenges and
Strategies
Highlights of
GAO-06-554, a report to
congressional requesters
Congestion is increasing rapidly
across the nation and freight traffic
is expected to almost double in 20
years. In many places, decision
makers cannot simply build their
way out of congestion, and
traditional revenue sources may
not be sustainable. As the baby
boom generation retires and the
costs of federal entitlement
programs rise, sustained, large-
scale increases in federal highway
grants seem unlikely. To provide
the robust growth that many
transportation advocates believe is
required to meet the nation’s
mobility needs, state and local
decision makers in virtually all
states are seeking alternative
funding approaches. Tolling
(charging a fee for the use of a
highway facility) provides a set of
approaches that are increasingly
receiving closer attention and
consideration. This report
examines tolling from a number of
perspectives, namely: (1) the
promise of tolling to enhance
mobility and finance highway
transportation, (2) the extent to
which tolling is being used and the
reasons states are using or not
using this approach, (3) the
challenges states face in
implementing tolling, and (4)
strategies that can be used to help
states address tolling challenges.
GAO is not making any
recommendations. GAO provided
a draft of this report to U.S.
Department of Transportation
(DOT) officials for comment. DOT
officials generally agreed with the
information provided.
Tolling has promise as an approach to enhance mobility and finance
transportation. Tolling can potentially enhance mobility by reducing
congestion and the demand for roads when tolls vary according to
congestion to maintain a predetermined level of service. Such tolls can
create incentives for drivers to avoid driving alone in congested conditions
when making driving decisions. In response, drivers may choose to share
rides, use public transportation, travel at less congested times, or travel on
less congested routes, if available. Tolling also has the potential to provide
new revenues, promote more effective investment strategies, and better
target spending for new and expanded capacity. Tolling can also potentially
leverage existing revenue sources by increasing private-sector participation
and investment.
Over half of the states in the nation have or are planning toll roads to
respond to what officials describe as shortfalls in transportation funding, to
finance new highway capacity, and to manage road congestion. While the
number of states that are tolling or plan to toll has grown since the
completion of the Interstate Highway System, and many states currently
have major new capacity projects under way, many states report no current
plans to introduce tolling because the need for new capacity does not exist,
the approach would not generate sufficient revenues, or they have made
other choices.
According to state transportation officials who were interviewed as part of
GAO’s nationwide review, substantive challenges exist to implementing
tolling. For example, securing public and political support can prove
difficult when the public and political leaders argue that tolling is a form of
double taxation, is unreasonable because tolls do not usually cover the full
costs of projects, and is unfair to certain groups. Other challenges include
obtaining sufficient statutory authority to toll, adequately addressing the
traffic diversion that might result when motorists seek to avoid toll facilities,
and coordinating with other states or jurisdictions on tolling projects.
GAO’s review of how states implement tolling suggests three strategies that
can help facilitate tolling. First, some states have developed policies and
laws that facilitate tolling. For example, Texas enacted legislation that
enables transportation officials to expand tolling in the state and leverage
tax dollars by allowing state highway funds to be combined with other funds.
Second, states that have successfully advanced tolling projects have
provided strong leadership to advocate and build support for specific
projects. In Minnesota, a task force was convened to explore tolling and
ultimately supported and recommended a tolling project. Finally, tolling
approaches that provided tangible benefits appear to be more likely to be
accepted than projects that offer no new tangible benefits or choice to users.
For example, in California, toll prices on the Interstate 15 toll facility are set
to keep traffic flowing freely in the toll lanes.
www.gao.gov/cgi-bin/getrpt?GAO-06-554.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact JayEtta Z.
Hecker at (202)512-2834 or
Page i GAO-06-554 Highway Finance
Contents
Letter 1
Results in Brief 2
Background 5
Tolling Has Promise as an Approach for Enhancing Mobility and for
Financing Transportation 11
States’ Use of Tolling to Address Funding Shortfalls, Finance New
Capacity, and Manage Congestion Is Expanding; but for Some
States, Tolling Is Not Viewed as Feasible 20
States That Are Considering and Implementing a Tolling Approach
Face Two Broad Types of Challenges 32
Three Broad Strategies Can Help State Transportation Officials
Address Challenges to Tolling 42
Concluding Observations 53
Agency Comments and Our Evaluation 54
Appendixes
Appendix I: Objectives, Scope, and Methodology 56
Appendix II: Correlation Analysis 59
Appendix III: Survey Questions 62
Appendix IV: GAO Contact and Staff Acknowledgments 65
Tables
Table 1: Tolling-Related Programs Authorized in Surface
Transportation Legislation 9
Table 2: Questions That Can Be Considered When Planning and
Designing Toll Projects 48
Table 3: Results of Correlation Analysis 61
Figures
Figure 1: State Highway Revenue Sources, Fiscal Year 2004 6
Figure 2: Annual Delay per Traveler in Selected Urban Areas, 1982,
1993, and 2003 12
Figure 3: Combined Federal and Average State Motor Fuel Tax
Rates 16
Figure 4: Existing Toll Road Facilities 21
Figure 5: Planned Toll Road Facilities 23
Figure 6: Conceptual Drawing of the Trans Texas Corridor 27
Figure 7: California State Route 91 Express Lanes and Toll
Rates 30
Figure 8: Challenges to Tolling 33
Contents
Page ii GAO-06-554 Highway Finance
Figure 9: Challenges to Tolling 34
Figure 10: Challenges to Tolling 39
Figure 11: Strategies to Address Challenges to Tolling 42
Figure 12: Strategies to Address Challenges to Tolling 43
Figure 13: Strategies to Address Challenges to Tolling 46
Figure 14: Strategies to Address Challenges to Tolling 51
Abbreviations
BEA Bureau of Economic Analysis
EIS environmental impact statement
FHWA Federal Highway Administration
GDP gross domestic product
HOT high occupancy toll
HOV high occupancy vehicle
ISTEA Intermodal Surface Transportation Efficiency Act of 1991
MPO metropolitan planning organization
PPP public-private partnership
PPTA Public-Private Transportation Act of 1995
ROD Record of Decision
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users
SEP-15 Special Experimental Projects 15
State DOT State Department of Transportation
TEA-21 1998 Transportation Equity Act for the 21
st
Century
TIFIA Transportation Infrastructure Finance and Innovation Act of
1998
TOT truck-only toll
TTC Trans Texas Corridor
U.S. DOT U.S. Department of Transportation
VMT vehicle miles traveled
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Page 1 GAO-06-554 Highway Finance
United States Government Accountability Office
Washington, D.C. 20548
Page 1 GAO-06-554 Highway Finance
A
June 28, 2006 Letter
The Honorable James M. Inhofe
Chairman
Committee on Environment and Public Works
United States Senate
The Honorable Christopher S. “Kit” Bond
Chairman
Subcommittee on Transportation and Infrastructure
Committee on Environment and Public Works
United States Senate
The nation’s highways are critical to providing for and enhancing
mobility—the free flow of passengers and goods—and to sustaining
America’s economic growth. Mobility gives people access to goods,
services, recreation, and jobs; gives businesses access to materials,
markets, and people; and promotes the movement of personnel and
materiel to meet national defense needs. During the twentieth century,
motor fuel taxes were the mainstay of highway financing, and during the
latter part of that century the construction of the 47,000 mile Interstate
Highway System dominated the agendas and activities of state and federal
highway decision makers. In the twenty-first century, state and local
transportation officials are on the front lines of transportation decision
making and face a new and daunting set of challenges. Congestion is
increasing rapidly across the nation, particularly in urban areas, and freight
traffic is expected to almost double in 20 years. In many places, decision
makers cannot simply build their way out of congestion, and traditional
revenue sources may not be sustainable. As the baby boom generation
retires and the costs of federal entitlement programs rise, sustained, large-
scale increases in federal highway grants seem unlikely. To provide the
robust growth that many transportation advocates believe is required to
meet the nation’s mobility needs, state and local decision makers in
virtually all states are seeking alternative funding approaches. Tolling (i.e.,
charging a fee for the use of a highway) provides a set of approaches that
are increasingly receiving closer attention and consideration.
As requested, this report provides information on states’ experiences with
tolling and provides some insights on issues that state transportation
officials have encountered when considering or implementing a tolling
approach. Specifically, this report examines (1) the promise of tolling to
enhance mobility and finance highway transportation, (2) the extent to
Page 2 GAO-06-554 Highway Finance
which tolling is being used in the United States and the reasons states are
using or not using this approach, (3) the challenges states face in
implementing tolling, and (4) strategies that can be used to help states
address the challenges to tolling.
To fulfill our objectives, we reviewed and analyzed research reports and
analytical studies; interviewed a wide range of stakeholders, including state
and local transportation officials, project sponsors, and private-sector
representatives; conducted a nationwide survey of state departments of
transportation; and conducted semistructured interviews with state
department of transportation officials. We also performed a correlation
analysis to identify the extent to which state financial and demographic
characteristics are associated with states’ use of tolling. In addition, we
interviewed transportation stakeholders in six states that were either
planning toll projects or constructing toll projects. In addition to our survey
and semistructured interviews, states planning toll roads were identified
through an analysis of states’ participation in Federal Highway
Administration (FHWA) tolling programs, including the Interstate System
Reconstruction and Rehabilitation Pilot Program and the Value Pricing
Pilot, and states constructing toll roads were identified through an analysis
of relevant reports and studies. During our review, we determined that a
number of states with toll bridges or tunnels do not have or are not
considering the tolling of roads. We, therefore, decided to exclude toll
bridges and tunnels from our definition of states tolling or planning to toll
to more accurately report on the challenges to tolling. Although we discuss
the federal role with regard to states’ experience with tolling, we did not
assess the effectiveness of federal toll programs or the potential effects of
federal grant programs on states’ experience with the approach. (See app. I
for our objectives, scope, and methodology.) We performed our work from
June 2005 through June 2006 in accordance with generally accepted
government auditing standards.
Results in Brief
Tolling has promise as an approach to enhance mobility and finance
transportation. A tolling approach can potentially help enhance mobility by
managing congestion. Congestion impedes both passenger and freight
mobility and is increasing as a result of rapid population growth and more
vehicles traveling farther on our roads. Applying tolls that vary with the
level of congestion—congestion pricing—can potentially reduce
congestion and the demand for roads because tolls that vary according to
the level of congestion can be used to maintain a predetermined level of
service. Such tolls create additional incentives for drivers to avoid driving
Page 3 GAO-06-554 Highway Finance
alone in congested conditions when making driving decisions. In response,
drivers may choose to share rides, use public transportation, travel at less
congested (generally off-peak) times, or travel on less congested routes, if
available, to reduce their toll payments. For example, a study of the State
Route 91 Express Lanes in California found that when tolls increased 50
percent during peak hours, traffic during those hours dropped by about
one-third. As concerns about the sustainability of traditional financing
sources continue to grow, tolling also has promise to improve investments
and raise revenue. The per-gallon fuel tax, the mainstay of transportation
finance for 80 years, is declining in purchasing power because fuel tax rates
are not increasing, and more fuel-efficient vehicles and alternative-fueled
vehicles undermine the long-term viability of fuel taxes as the basis for
financing transportation. In this environment, tolling potentially has
promise to promote more effective infrastructure investment strategies by
better targeting spending for new and expanded capacity. For example,
among other factors, toll project construction is typically financed by
bonds, and projects must pass the test of market viability and meet goals
demanded by investors, although even with this test, there is no guarantee
that projects will always be viable. Tolling can also potentially enhance
private-sector participation and investment in major highway projects.
Tolling’s promise is particularly important in light of long-term pressures on
the federal budget.
According to our survey of state transportation officials, 31 of the 50 states
and the District of Columbia have or are planning toll roads, including 24
states that are operating toll roads and 7 states that are planning to toll.
Tolling grew in the 1940s and 1950s and, after a period of slower growth,
states’ tolling again began to expand in the 1990s. In total, 23 states are in
some phase of planning new toll roads. Officials in the 31 states that have
toll roads or are planning toll roads indicated that their primary reasons for
using or considering the use of a tolling approach was to address
transportation funding shortfalls, finance new capacity, and manage
congestion. For example, in Texas, tolling is being used to finance major
new capacity projects, such as the Trans Texas Corridor (TTC)—a
proposed multiuse, statewide network of transportation routes that will
incorporate existing and new highways—and to manage congestion in
Houston and other metropolitan areas. Transportation officials in some
states, however, have told us that tolling is not feasible because of limited
need for new capacity, insufficient tolling revenues, and public and political
opposition to tolling. For example, officials from nearly every state that is
not pursuing tolling mentioned some form of public or political opposition
to toll roads. In New Jersey, officials told us that opposition to new toll
Page 4 GAO-06-554 Highway Finance
roads is strong because many state border crossings and major highways
are already tolled.
State transportation officials face two types of challenges that are broadly
related to securing support for and implementing a tolling approach to
finance transportation. The first type of challenge, according to
transportation officials, is the difficulty of obtaining public and political
support in the face of opposition from the public and political leaders in
states where tolling is being considered and applied. According to
transportation officials with whom we spoke, opposition is largely based
on arguments that (1) fuel taxes and other dedicated funding sources are
used to pay for roads and tolling is, therefore, a form of double taxation; (2)
a tolling approach is unreasonable because tolls often do not cover the
costs of a project; and (3) applying tolls can produce regional, income, and
other inequities. For example, a Wisconsin transportation official told us
that Wisconsin is not implementing a tolling approach because the public
generally believes that fuel taxes already pay for roads and tolls would
adversely affect the state’s tourist economy, while Kentucky and Arkansas
officials said that it would be difficult to undertake tolling unless toll roads
could be largely financially self-sufficient. In Florida, concerns about
regional inequity led local governments to pass a law that led to the state’s
taking action to ensure that spending on facilities in three counties was
commensurate with toll collections in those three counties. The second
type of challenge is the practical difficulty of implementing tolling,
including obtaining the statutory authority to toll, addressing the traffic
diversion that might result when motorists seek to avoid toll facilities, and
coordinating with other states or jurisdictions. For example, Minnesota had
legislation authorizing tolling, but conditions built into the legislation, most
importantly, local government veto authority that could be exercised
without recourse, prevented transportation officials from implementing a
specific project. As a result, when state decision makers identified a toll
project that would convert underused high occupancy vehicle (HOV) lanes
to high occupancy toll (HOT) lanes that would allow non-HOV’s to use the
lanes for a fee—the Interstate 394 optional toll lane project—state decision
makers pursued specific legislation that exempted HOV to HOT lane
conversions from local veto, thus providing an opportunity to advance the
Interstate 394 optional toll lane project several years later.
Through our review of the ways states use tolling, we have identified three
broad strategies that have both short-term and long-term relevance for
state transportation officials who are considering tolling. The first strategy
that transportation officials can consider involves developing policies and
Page 5 GAO-06-554 Highway Finance
laws that facilitate the use of tolling to finance transportation. In
developing such a framework, transportation officials can, first, build
support for the approach by establishing a rationale for its use and then
secure the legislative authority to use the approach. For example, to
expand the use of tolling and to leverage tax dollars by allowing state
highway funds to be combined with other funds, Texas enacted legislation
that enabled transportation officials to realize these goals. The second
strategy that transportation officials can consider involves providing
leadership to build support for individual projects and addressing the
challenges to tolling in project design. For example, in Minnesota, a task
force of state and local officials, citizens, and business leaders was
convened in 2001 to explore a range of road pricing options, including the
conversion of HOV lanes to HOT lanes, and make recommendations to
elected officials. Since tolling had been fairly controversial in the past,
decision makers believed that a task force would provide a more credible
and independent voice to the general public. Ultimately, the task force
supported the HOV to HOT conversions and, with the governor’s support
and the passage of legislation authorizing the conversion, the project was
implemented. The last strategy that transportation officials can consider
involves selecting a tolling approach and a project that provides tangible
benefits. Promoting a project that provides tangible benefits can potentially
help transportation officials justify both the costs of the project and the
fees that users will be required to pay for the service. Although tolling can
take different forms and decisions about its use are state specific, in
concept, a tolling structure that varies with the level of congestion—
congestion pricing—offers increased predictability and, as a result,
provides tangible benefits to users. While actual experience with
congestion pricing is still fairly limited in the United States, projects in
operation illustrate how transportation officials have advanced projects
seeking to achieve the potential benefits that may result from congestion
pricing. For example, toll prices on Interstate 15 in San Diego are set
dynamically, changing every 6 minutes, which has succeeded in keeping
traffic flowing freely.
The U.S. Department of Transportation reviewed a draft of this report.
Officials from the Department indicated that they generally agreed with the
information provided and provided technical clarifications, which we
incorporated as appropriate.
Background
The responsibility for building and maintaining highways in the United
States rests with state departments of transportation in each of the 50
Page 6 GAO-06-554 Highway Finance
states, the District of Columbia, and Puerto Rico. In addition, local
governments finance road construction through sources such as property
and sales taxes. In 2004, state governments took in about $104 billion from
various sources to finance their highway capital and maintenance
programs—44 percent of these revenues came from state fuel taxes and
other state user fees, and 28 percent came from federal grants. Sources of
state highway revenues in 2004 are shown in figure 1.
Figure 1: State Highway Revenue Sources, Fiscal Year 2004
FHWA administers federal grant funds through the federal-aid highway
program and distributes highway funds to the states through annual
apportionments established by statutory formulas. Once FHWA apportions
these funds, they are available to be obligated for the construction,
reconstruction, and improvement of highways and bridges on eligible
federal-aid highway routes and for other purposes authorized in law. Within
these parameters, responsibility for planning and selecting projects
generally rests with state departments of transportation (DOT) and with
metropolitan planning organizations, and these states and planning
organizations have considerable discretion in selecting specific highway
projects that will receive federal funds. For example, section 145 of title 23
5%
28%
15%
52%
Tol ls
State general
revenues
Other
(local contributions, bond proceeds,
and miscellaneous)
Federal grants
State fuel taxes
and user fees
State funds
8%
44%
Source: FHWA.
Page 7 GAO-06-554 Highway Finance
of the United States Code describes the federal-aid highway program as a
federally assisted state program and provides that the federal authorization
of funds, as well as the availability of federal funds for expenditure, shall
not infringe on the states' sovereign right to determine the projects to be
federally financed.
About 5 percent of the highway revenues to the states in 2004 came from
tolls. In 2005, the United States had about 5,000 miles of toll facilities in
operation or under construction, including about 2,800 miles, or 6 percent,
of the Interstate Highway System, according to FHWA.
1
Tolling of roads
began in the late 1700s. From 1792 through 1845, an estimated 1,562
privately owned turnpike companies managed and charged tolls on about
15,000 miles of turnpikes throughout the country.
2
Between 1916 and 1921,
the number of automobiles in the United States almost tripled, from 3.5
million to 9 million, and as automobile use increased, pressure grew for
more government involvement in financing the construction and
maintenance of public roads.
3
In 1919, Oregon became the first state to
impose a motor fuel tax to finance roadway construction.
4
In 1916, the
Federal Aid Road Act provided states with federal funds to finance up to 50
percent of the cost of roads and bridges constructed to provide mail
service. This act and its successor, the 1922 Federal Highway Act,
prohibited tolling on roads financed with federal funds.
In the 1930s and 1940s, President Roosevelt led the thinking for developing
a series of interconnected systems of toll roads that crossed the United
States, which was the beginning of the idea of an interstate highway
system. Then, between 1940 and 1952, 5 states opened such highways,
1
Federal Highway Administration, Toll Facilities in the United States Interstate System
Toll Roads in the United States, Table T-1, Part 3 (Washington, D.C.: Jan. 1, 2005) and
Federal Highway Administration, Toll Facilities in the United States Facts (Washington,
D.C.: Jan. 1, 2005).
2
Turnpike is a term used interchangeably with toll road, which is a highway that requires toll
collections from all drivers (usually with the exception of emergency vehicles). Typically,
the tolls are used to support operations and maintenance, as well as to pay debt service on
the bonds issued to finance the toll facility.
3
Tom Lewis, Divided Highways: Building the Interstate Highways, Transforming
American Life (New York: Penguin, 1997).
4
National Bureau of Economic Research, Political Processes and the Common Pool
Problem: The Federal Highway Trust Fund (Cambridge, MA.: June 2000).
Page 8 GAO-06-554 Highway Finance
which they financed through tolls.
5
The first of these highways, the
Pennsylvania Turnpike, was completed in 1940. During this time, about 30
states considered building toll roads, given the success of Pennsylvania. In
1943, Congress passed an amendment to the Federal Highway Act,
directing the Commissioner of Public Roads to conduct a survey for an
express highway system and report the results to the President and
Congress. However, there was no determination as to how such a system
would be funded. President Eisenhower supported a toll system financed
with bonds to be paid back with toll revenues until the bonds were paid off,
at which time the tolls would be removed. A committee appointed by
President Eisenhower also recommended a highway program financed
with bonds, but proposed that federal fuel tax revenues, instead of tolls, be
used to pay back the bonds. Ultimately, the Federal-Aid Highway Act of
1956 authorized the creation of a Highway Trust Fund to collect federal fuel
tax revenues and finance the construction of the Interstate Highway
System on a pay-as-you-go basis. The act prohibited tolling on interstate
highways and all federally assisted highways; as a consequence, states built
few new toll roads while the Interstate Highway System was under
construction. However, many of the toll roads built before 1956 were
eventually incorporated into the Interstate Highway System, and tolling on
these roads was allowed to continue. Tolling was also allowed, on a case-
by-case basis under very specific conditions and with a limited federal
funding share, for interstate bridges and tunnels.
During the 1990s, as interstate construction wound down, states again
began considering and implementing tolling. At the same time, some of the
federal restrictions on the use of federal funds for tolling began to ease.
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
liberalized some of the long-standing federal restrictions on tolling by
permitting tolling for the construction, reconstruction, or rehabilitation of
federally assisted non-Interstate roadways and by raising the federal share
on interstate bridges and tunnels to equal the share provided for other
federal-aid highway projects. The 1998 Transportation Equity Act for the
21st Century (TEA-21) established a new pilot program to allow the
conversion of a free interstate highway, bridge, or tunnel to a toll facility if
needed reconstruction or rehabilitation was possible only with the
5
Lewis, Divided Highways.
Page 9 GAO-06-554 Highway Finance
collection of tolls.
6
The Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU), enacted in
2005, continued all of the previously established toll programs and added
new programs. The federal tolling-related programs that have been
authorized in surface transportation legislation are shown in table 1.
Table 1: Tolling-Related Programs Authorized in Surface Transportation Legislation
Source: FHWA.
SAFETEA-LU also created a National Surface Transportation
Infrastructure Financing Commission to consider revenue sources
available to all levels of government, particularly Highway Trust Fund
revenues, and to consider new approaches to generating revenues for
financing highways. The commission’s objective is to develop a report
recommending policies to achieve revenues for the Highway Trust Fund
that will meet future needs. The commission is required to produce a final
report within 2 years of its first meeting.
In addition to SAFETEA-LU’s new tolling provisions and enhancements to
existing programs, FHWA offers an innovative credit assistance program,
6
Federal Highway Administration, Federal-Aid Highway Toll Facilities (Washington, D.C.:
June 16, 2005).
Program Purpose
Value Pricing Pilot Program Authorized in ISTEA in 1991, this program is a pilot program for local transportation
programs to determine the potential of different value pricing approaches to manage
congestion, including projects that would use tolls on highway facilities.
Interstate System Reconstruction and
Rehabilitation Toll Pilot Program
Authorized in TEA-21 in 1998, this program allows tolls on three pilot projects in
different states to reconstruct an existing interstate facility.
Express Lanes Demonstration Program Authorized in SAFETEA-LU in 2005, this program allows 15 demonstration projects to
use tolling on interstate highways to manage high congestion levels, reduce emissions
to meet specific Clean Air Act requirements, or finance additional Interstate lanes to
reduce congestion.
High Occupancy Vehicle (HOV) Facilities Authorized in SAFETEA-LU in 2005, this program permits states to charge tolls to
vehicles that do not meet occupancy requirements to use an HOV lane even if the lane
is on an interstate facility.
Interstate System Construction Toll Pilot
Program
Authorized in SAFETEA-LU in 2005, this program permits tolls on three pilot projects
by a state or compact of states to construct new interstate system highways.
Section 129 of title 23, United States Code Section 129 authorizes federal participation in specific toll activities that are otherwise
generally prohibited under Section 301, also from title 23.
Page 10 GAO-06-554 Highway Finance
which can be used to develop toll roads, and an experimental program,
which can be used to test innovative toll road development procedures.
The Transportation Infrastructure Finance and Innovation Act of 1998
(TIFIA) permits FHWA to offer three kinds of credit assistance for
nationally or regionally significant surface transportation projects: direct
loans, loan guarantees, and lines of credit. Because TIFIA provides credit
assistance rather than grants, states are likely to use it for infrastructure
projects that can generate their own revenues through user charges, such
as tolls or other dedicated funding sources. TIFIA credit assistance is
aimed at advancing the completion of large, capital intensive projects—
such as toll roads—that otherwise might be delayed or not built at all
because of their size and complexity and the financial market’s uncertainty
over the timing of revenues from a project. The main goal of TIFIA is to
leverage federal funds by attracting substantial private and other
nonfederal investment in projects. FHWA has also encouraged
experimental projects through the Special Experimental Projects 15 (SEP-
15) program, which is intended to encourage the formation of public-
private partnerships for projects by providing additional flexibility for
states interested in experimenting with innovative ways to develop
projects, according to FHWA officials. SEP-15 allows innovation and
flexibility in contracting, compliance with environmental requirements,
right-of-way acquisition, and project finance.
In addition, the Department of Transportation’s Office of Transportation
Policy is proposing a pilot program—the Open Roads Pilot Program—to
explore alternatives to the motor fuel tax. Under this pilot, the Office of
Transportation Policy is proposing to make funds available to up to five
states to demonstrate on a large scale the viability and effectiveness of
financing alternatives to the motor fuel tax. Goals of the program would be
to: (1) demonstrate whether or not there are viable alternatives to the
motor fuel tax that will provide necessary investment resources while
simultaneously improving system performance and reducing congestion,
(2) identify successful motor fuel tax substitutes that have widespread
applicability to other states, and (3) provide a possible framework for
future federal reauthorization proposals.
Page 11 GAO-06-554 Highway Finance
Tolling Has Promise as
an Approach for
Enhancing Mobility
and for Financing
Transportation
As congestion increases and concerns about the sustainability of
traditional roadway financing sources grow, tolling has promise as an
approach to enhance mobility and to finance transportation. Tolls that are
set to vary with the level of congestion can potentially lead to a reduction in
congestion and demand for roads. Such tolls can create additional
incentives for drivers to avoid driving alone in congested conditions when
making their driving decisions. In response, drivers may choose to share
rides, use public transportation, travel at less congested (generally off-
peak) times, or travel on less congested routes, if available, to reduce their
toll payments. Tolling is also consistent with the important user pays
principle, can potentially better target spending for new and expanded
capacity, and can potentially enhance private-sector participation and
investment in major highway projects. Tolling’s promise is particularly
important in light of long-term fiscal challenges and pressures on the
federal budget.
In the Face of Increasing
Congestion, Tolling Holds
Promise as an Approach to
Enhance Mobility
Tolling can be used to potentially enhance mobility by managing
congestion, which is already substantial in many urban areas. Congestion
impedes both passenger and freight mobility and ultimately, the nation’s
economic vitality, which depends in large part on an efficient
transportation system. Highway congestion for passenger and commercial
vehicles traveling during peak driving periods doubled from 1982 through
2000. According to the Texas Transportation Institute, drivers in 85 urban
areas experienced 3.7 billion hours of delay and wasted 2.3 billion gallons
of fuel in 2003 because of traffic congestion.
7
The Texas Transportation
Institute estimated that the cost of congestion was $63.1 billion (in 2003
dollars), a fivefold increase over two decades after adjusting for inflation.
On average, drivers in urban areas lost 47 hours on the road in 2003, nearly
triple the delay travelers experienced on average in 1982. During this same
period, congestion grew in urban areas of every size; however, very large
metropolitan areas with populations of more than 3 million were most
affected. (See fig. 2 for examples of congestion growth in selected urban
areas.) Freight traffic—which has doubled since 1980 and in some
locations constitutes 30 percent of interstate system traffic—added to this
congestion at a faster rate than passenger traffic, and FHWA projects
7
Texas Transportation Institute, 2005 Urban Mobility Report (College Station, TX: May
2005).
Page 12 GAO-06-554 Highway Finance
continued growth, estimating that the volume of freight traffic on U.S.
roads will increase 70 percent by 2020.
Figure 2: Annual Delay per Traveler in Selected Urban Areas, 1982, 1993, and 2003
A number of factors, as follows, are converging to further exacerbate
highway congestion:
• Most population growth in the nation occurs in already congested
metropolitan areas. In 2000, the U.S. Census Bureau reported that 79
percent of 281 million U.S. residents lived in metropolitan areas.
Nationwide, the population is expected to increase by 54 million by
2020, and most of that growth is expected in metropolitan areas.
• Vehicle registrations are steadily increasing. In 2003, vehicle
registrations nationwide stood at 230 million, a 17 percent increase in
just 10 years.
0
10
20
30
40
50
60
70
Colorado Springs,
Colorado
Austin, TexasRiverside-San
Bernardino, California
Atlanta, Georgia
Hours of delay
Urban areas
Source: GAO analysis of Texas A&M University data.
1982
1993
2003
Page 13 GAO-06-554 Highway Finance
• Road usage, as measured by vehicle miles traveled (VMT), grew at a
steady annual rate of 2.8 percent from 1980 through 2003. For the 10-
year period between 1994 and 2003, the total increase in VMT was 22
percent.
• Road construction has increased at a slower pace than population
growth, vehicle registrations, and road usage. For example, from 1980 to
2000, VMT increased by 80 percent while urban lane miles increased 37
percent.
In light of this increasing congestion, a tolling structure that includes
congestion pricing can potentially reduce congestion and the demand for
roads during peak hours. Through congestion pricing, tolls can be set to
vary during congested periods to maintain a predetermined level of service.
One potential effect of this pricing structure is that the price that a driver
pays for such a trip, including the toll, may be equal to or close to the total
cost of that trip, including the external costs that drivers impose on others,
such as increased travel time, pollution, and noise.
8
Such tolls create
financial incentives for drivers to consider these costs when making their
driving decisions. In response, drivers may choose to share rides, use
transit, travel at less congested (generally off-peak) times, or travel on less
congested routes to reduce their toll payments.
9
Such choices can
potentially reduce congestion and the demand for road space at peak
periods, thus potentially allowing the capacity of existing roadways to
accommodate demand with fewer delays.
Actual experience with congestion pricing is still fairly limited in the United
States, with only five states operating such facilities and six states planning
8
As we reported in 2003, economists generally believe that charging surcharges or tolls
during congested periods can enhance economic efficiency by making them take into
account the external costs they impose on others in deciding when, where, and how to
travel. In congested situations, external costs are substantial and include increased travel
time, pollution, and noise. The goal of efficient pricing on public roads, for example, would
be to set tolls for travel during congested periods that would make the price (including the
toll) that a driver pays for such a trip equal or close to the total cost of that trip, including
external costs. GAO, Reducing Congestion: Congestion Pricing Has Promise for
Improving Use of Transportation Infrastructure, GAO-03-735T (Washington, D.C.: May 6,
2003). For further discussion of the research on congestion pricing, see Transportation
Research Board, Curbing Gridlock: Peak-Period Fees to Relieve Traffic Congestion
(Washington, D.C.: January 1994).
9
GAO-03-735T.
Page 14 GAO-06-554 Highway Finance
facilities.
10
Some results show that where variable tolls are implemented,
changes in toll prices affect demand and, therefore, levels of congestion.
For example, on State Route 91 in California, the willingness of people to
use the Express Lanes has been shown to be directly related to the price of
tolls. A study by Cal Poly State University for the California DOT estimated
that a 10 percent increase in tolls would reduce traffic by 7 percent to 7.5
percent, while a 100 percent increase in tolls would reduce traffic by about
55 percent.
11
By adjusting the price of tolls, the flow of traffic can be
maintained in the toll lanes so that congestion remains at manageable
levels. In the Minneapolis-St. Paul area, a Minnesota DOT study of a
proposed system of variable priced HOT lanes called MnPASS estimated
that, over time, average speeds and vehicle mileage would increase, while
vehicle hours traveled would decrease.
12
By 2010, with tolled express lanes
and free HOV lanes, the daily vehicle mileage on the entire system is
projected to be 3.6 million compared with 3.2 million if the highways are
not tolled. Average overall speed on the system is expected to be 47 mph
compared with 42.8 mph if the system is not implemented. Finally,
congestion pricing has been in use internationally as well.
Canada, Great
Britain, Norway, Singapore, and South Korea all have roadways that are
tolled to manage demand and reduce congestion. For example, in 1996,
South Korea implemented congestion tolls on two main tunnels. Traffic
volume decreased by 20 percent in the first 2 years of operation, and
average traffic speed increased by 10 kilometers per hour.
Although congestion pricing was dismissed by some decision makers in the
past partly because motorists queuing at toll booths to pay tolls created
congestion and delays, advances in automated toll collection have greatly
reduced the cost and inconvenience of toll collection. Today, nearly every
major toll facility provides for electronic toll collection, greatly reducing
the cost and inconvenience of toll collection. With electronic toll
collection, toll fee collection for using a facility can be done at near
highway cruising speed because cars do not have to stop at toll plazas.
However, as we reported, there are no widely accepted standards for
10
According to our survey of state DOTs, the five states currently operating facilities are
California, Minnesota, New York, Texas, and Virginia. States that are planning facilities
include California, Colorado, Maryland, Virginia, Texas, and Washington.
11
Cal Poly State University, Continuation Study to Evaluate the Impacts of the SR 91 Value-
Priced Express Lanes Final Report (San Luis Obispo, CA: December 2000).
12
Cambridge Systematics for Minnesota Department of Transportation, MnPASS System
Study, Final Report (Cambridge, MA: Apr. 7, 2005).
Page 15 GAO-06-554 Highway Finance
electronic toll systems, which could become a barrier to promoting the
needed interoperability between toll systems.
13
Tolling Holds Promise as an
Approach to Finance
Transportation Projects
Tolling holds promise to improve investment decisions and raise revenues
in the face of growing concerns about the sustainability of traditional
financing sources for surface transportation. For many years, federal and
state motor fuel taxes have been the mainstay of state highway revenue. In
the last few years, however, federal and motor fuel tax rates have not kept
up with inflation. Between 1995 and 2004, total highway revenues for states
grew an average of 3.6 percent per year, with average annual increases of
4.9 percent for federal grants and 3 percent for revenues from state
sources, according to FHWA data. However, these increases were smaller
than increases in the cost of materials and labor for road construction and
are not sufficient to keep pace with the robust levels of growth in highway
spending many transportation advocates believe is needed.
14
The federal
motor fuel tax rate of 18.4 cents per gallon has not been increased since
1993, and thus the purchasing power of fuel tax revenues has been steadily
eroded by inflation. Although the Highway Trust Fund
15
was reauthorized
in 1998 and 2005, no serious consideration was given to raising fuel tax
rates. Most states faced a similar degradation of the value of their state
motor fuel tax revenues—although 28 states raised their motor fuel tax
rates between 1993 and 2003, only three states raised their rates enough to
keep pace with inflation. State gasoline tax rates range from 7.5 cents per
gallon in Georgia to 28.5 cents in Wisconsin. Seven states have motor fuel
tax rates that vary with the price of fuel or the inflation rate—including one
state that repealed the linkage of its fuel tax rate to the inflation rate
effective in 2007. Figure 3 shows the decline in the purchasing power in
13
GAO, Highway Congestion: Intelligent Transportation Systems' Promise for Managing
Congestion Falls Short, and DOT Could Better Facilitate Their Strategic Use, GAO-05-943
(Washington, D.C.: Sept. 14, 2005).
14
Brookings Institution, Improving Efficiency and Equity in Transportation Finance
(Washington, D.C.: April 2003); Eric Kelderman, Road Funding Takes a Toll on States
(Washington, D.C.: Feb. 17, 2006); and Transportation Research Board, “Special Report 285:
The Fuel Tax and Alternatives for Transportation Funding” (Washington, D.C.: 2005).
15
Highway user tax receipts, such as motor fuel taxes, are deposited into the Highway Trust
Fund and distributed to the states according to formulas based on vehicle miles traveled,
motor fuel used on highways, and other factors, which are specified in law. GAO, Surface
and Maritime Transportation: Developing Strategies for Enhancing Mobility: A National
Challenge, GAO-02-775 (Washington, D.C.: Aug. 30, 2002).
Page 16 GAO-06-554 Highway Finance
real terms of revenues generated by federal and state motor fuel tax rates
since 1990.
Figure 3: Combined Federal and Average State Motor Fuel Tax Rates
Note: Tax rates are in 2004 inflation-adjusted dollars. Totals for 1992, 1995, 1996, 2000, and 2003 are
rounded. State average gas tax rate is a “weighted average.”
Even if federal and state motor fuel tax rates were to keep pace with
inflation, the growing use of fuel-efficient vehicles and alternative-fueled
vehicles would, in the longer term, further diminish fuel tax revenues.
Although all highway motorists pay fuel taxes, those who drive hybrid-
powered or other alternative-fueled vehicles consume less fuel per mile
than those who drive gas-only vehicles. As a result, these motorists pay less
fuel tax per mile traveled. According to the U.S. Energy Information
Agency, hybrid vehicle sales grew twentyfold between 2000 and 2005 and
Sources: GAO analysis of DOT and FHWA data.
38.20
19.98
18.21
44.92
22.21
22.71
44.41
22.17
22.24
43.72
21.92
21.79
42.78
21.50
21.27
42.39
21.35
21.04
42.35
21.54
20.81
42.76
22.25
20.51
41.12
21.05
20.07
41.09
21.49
19.60
39.24
19.97
19.27
38.52
19.63
18.88
37.50
19.10
18.40
37.82
18.97
18.85
39.97
22.16
17.80
0
10
20
30
40
50
200420032002200120001999199819971996199519941993199219911990
Federal gas tax rate
State average
gas tax rate
Total gas tax rate
Cents per gallon
Federal motor fuels tax
Average state motor fuels tax
Page 17 GAO-06-554 Highway Finance
will grow to 1.5 million vehicles annually by 2025. In the past five years,
hybrid vehicle sales grew in the United States twentyfold, from 9,400 in
2000 to over 200,000 in 2005. Moreover, the U.S. Energy Information
Agency projects that hybrid vehicle sales will grow to 1.5 million annually
by 2025.
Sales of alternative-fueled vehicles, such as alcohol-flexible-fueled
vehicles, are projected to increase to 1.3 million in 2030, with electric and
fuel cell technologies projected to increase by 2030 as well.
As concerns about the sustainability of traditional roadway financing
sources grow, tolling can potentially target investment decisions by
adhering to the user pays-principle. National roadway policy has long
incorporated the user pays concept, under which the costs of building and
maintaining roadways are paid by roadway users, generally in the form of
excise taxes on motor fuels and other taxes on inputs into driving, such as
taxes on tires or fees for registering vehicles or obtaining operator licenses.
This method of financing is consistent with one measure of equity that
economists use in assessing the financing of public goods and services, the
benefit principle, which measures equity according to the degree that
readily identifiable beneficiaries bear the cost. As a result, the user pays
concept is widely recognized as a critical anchor for transportation policy.
16
Increasingly, however, decision makers have looked to other revenue
sources—such as income, property, and sales tax revenues—to finance
roads. Using these taxes results in some sacrifice of the benefit principle
because there is a much weaker link to the benefits of roadway
expenditures for those taxes than there is for fuel taxes.
17
Tolling, however,
is more consistent with user pay principles because tolling a particular
road and using the toll revenues collected to build and maintain that road
more closely link the costs with the distribution of the benefits that users
derive from it. Motor vehicle fuel taxes can provide a rough link between
costs and benefits but do not take into account the wide variation in costs
required to provide different types of facilities (i.e., roads, bridges, tunnels,
interchanges) some of which can be very costly.
Tolling can also potentially lead to more targeted, rational, and efficient
investment by state and local governments. Roadway investment can be
16
Texas Transportation Institute, 2005 Urban Mobility Report (College Station, TX: May
2005).
17
Brookings Institution, Improving Efficiency and Equity in Transportation Finance
(Washington, D.C.: April 2003).
Page 18 GAO-06-554 Highway Finance
more efficient when it is financed by tolls because the users who benefit
will likely support additional investment to build new capacity or enhance
existing capacity only when they believe the benefits exceed the costs.
When costs are borne by nonusers, the beneficiaries may demand that
resources be invested beyond the economically justifiable level. Tolling can
also provide the potential for more rational investment because, in contrast
to most grant-financed projects, toll project construction is typically
financed by bonds sold and backed by future toll revenues, and projects
must pass the test of market viability and meet goals demanded by
investors. However, even with this test there is no guarantee that projects
will always be viable.
18
A tolling structure that includes congestion pricing can also help guide
capital investment decisions for new facilities. As congestion increases,
tolls also increase and such increases (sometimes referred to as
“congestion surcharges”) signal increased demand for physical capacity,
indicating where capital investments to increase capacity would be most
valuable. At the same time, congestion surcharges would provide a ready
source of revenue for local, state, and federal governments, as well as for
transportation facility operators in order to help fund these investments in
new capacity that, in turn, can reduce delays. Over time, this form of
pricing can potentially influence land-use plans and the prevalence of
telecommuting and flexible workplaces, particularly in heavily congested
corridors where external costs are substantial and congestion surcharges
would be relatively high.
Tolling can also be used as a tool for leveraging increased private-sector
participation and investment. In March 2004, we reported that three
states—California, Virginia, and South Carolina—had pursued private-
sector investment and participation in major highway projects. Since that
time, Virginia has pursued additional projects, and Texas has contracted
with a private entity to participate and invest in a major highway project.
19
Tolling can be used to enhance private participation because it provides a
mechanism for the private sector to earn the return on investment it
18
As we reported in 2004, three of the four toll road projects that were built with private
participation and investment and were open to traffic at that time were not financially
successful. See GAO, Highway and Transit: Private Sector Sponsorship of and Investment
in Major Projects Has Been Limited, GAO-04-419 (Washington, D.C.: Mar. 25, 2004).
19
In addition, the City of Chicago and the State of Indiana have contracted with private
entities to operate existing facilities.
Page 19 GAO-06-554 Highway Finance
requires to participate. Involving the private sector allows state and local
governments to build projects sooner, conserve public funding from
highway capital improvement programs for other projects, and limit their
exposure to the risks associated with acquiring debt.
20
In the Long Term, Tolling
Holds Promise for
Addressing the
Transportation Challenges
Ahead
Federal and state policymakers have begun looking toward future options
for long-term highway financing. For example, SAFETEA-LU established
the National Surface Transportation Infrastructure Financing Commission
to study prospective Highway Trust Fund revenues and assess alternative
approaches to generating revenues for the Fund. SAFETEA-LU also
authorized a study, to be performed by the Public Policy Center of the
University of Iowa, to test an approach to assessing highway use fees based
on actual mileage driven. This approach would use an onboard computer to
measure the miles driven by a specific vehicle on specific types of
highways. A few states have also begun looking toward the long-term
financing options. Oregon, the first state to enact a motor fuel tax, is
sponsoring a study on the technical feasibility of replacing the gas tax with
a per-mile fee. During 2006, volunteers will have onboard mileage-counting
equipment added to their vehicles and will, for one year, pay a road user fee
equal to 1.2 cents a mile instead of paying the state’s motor fuel tax.
But beyond the questions of financing and financing sources, broader
issues and challenges exist. As the baby boom generation ages, mandatory
federal commitments to health and retirement programs will consume an
ever-increasing share of the nation’s gross domestic product (GDP) and
federal budgetary resources, placing severe pressures on all discretionary
programs, including those that fund defense, education, and transportation.
Our simulations show that by 2040, revenues to the federal government
might barely cover interest on the debt—leaving no money for either
mandatory or discretionary programs—and that balancing the budget
could require cutting federal spending by as much as 60 percent, raising
taxes by up to 2 ½ times their current level, or some combination of the
two. As we have reported, this pending fiscal crisis requires a fundamental
reexamination of all federal programs, including those for highways. This
reexamination should raise questions such as whether a federal role is still
needed, whether program funding can be better linked to performance, and
whether program constructs are ultimately sustainable. It is in this context
20
GAO-04-419.
Page 20 GAO-06-554 Highway Finance
that tolling has promise for addressing the challenges ahead. In particular,
we have suggested that a reexamination of the federal role in highways
should include asking whether the federal government should even
continue to provide financing through grants or whether, instead, it should
develop and expand alternative mechanisms that would better promote
efficient investments in, and use of, infrastructure and better capture
revenue from users.
States’ Use of Tolling to
Address Funding
Shortfalls, Finance
New Capacity, and
Manage Congestion Is
Expanding; but for
Some States, Tolling Is
Not Viewed as Feasible
According to our survey of state transportation officials, there are toll road
facilities in 24 states and plans to build toll road facilities in 7 other states.
Tolling grew in the 1940s and 1950s, but after a period of slower growth,
states’ tolling began to expand again in the 1990s. The 5 states that began
tolling after 1990 are currently planning additional toll roads. Officials in
states that have toll roads or are planning toll roads indicated that their
primary reasons for using or considering the use of a tolling approach were
to address transportation shortfalls, finance new capacity, and manage
congestion. Transportation officials in some states, however, told us that
tolling is not now seen as feasible because there is little need for new tolled
capacity, tolling revenues would be insufficient, and they would face public
and political opposition to tolling.
Nearly Half of the States
Have Operating Toll Roads,
and More States Are
Planning Toll Roads
Currently, there are toll road facilities in 24 states throughout the United
States, and there are plans to build toll road facilities in 7 additional states.
Figure 4 shows the states that have at least one existing toll road, according
to our survey of transportation officials from all 50 states and the District of
Columbia and our review of FHWA toll-related programs. (See app. III for
the survey questions.)
Page 21 GAO-06-554 Highway Finance
Figure 4: Existing Toll Road Facilities
Tolling grew in the 1950s, slowed for several decades, and again began to
expand rapidly in the 1990s. Five states—California, Colorado, Minnesota,
South Carolina, and Utah—opened their first toll roads from 1990 to 2006
and, according to our survey of state transportation officials, all five are
currently planning, or in some stage of building, at least one new toll road.
Large states that have recently built toll roads, such as California, Florida,
and Texas, are also moving ahead with plans to build and expand systems
of tolls. In Texas, for example, the DOT’s Turnpike Authority Division is
developing a proposed multiuse, statewide network of transportation
Source: GAO.
Existing toll road facilities
Not surveyed
No existing toll road facilities
Pa.
Ore.
Nev.
Idaho
Mont.
Wyo.
Utah
Ariz.
N.Mex.
Colo.
N.Dak.
S.Dak.
Nebr.
Tex.
Kans.
Okla.
Minn.
Iowa
Mo.
Ark.
La.
Ill.
Miss.
Ind.
Ky.
Tenn.
Ala.
Fla.
Ga.
S.C.
N.C.
Va.
Ohio
N.H.
Mass.
R.I. ( )
Mich.
Calif.
Wash.
Wis.
N.Y.
Maine
Vt.
W.Va.
Alaska
Hawaii
Conn. ( )
N.J. ( )
Del. ( )
Md. ( )
D.C. ( )
Page 22 GAO-06-554 Highway Finance
routes that will incorporate existing and new highways called the TTC,
21
while three other regional toll authorities
22
in Austin, Dallas, and Houston
are also planning toll roads. In California, a state legislative initiative in
1989 led to the development of toll roads in Orange County, including the
State Route 91 Express Lanes and State Route 125 in San Diego. And in
Florida, the DOT-run Florida Turnpike Enterprise operates nine tolled
facilities that include almost 500 miles of toll roads and is studying the
feasibility of implementing tolling to manage congestion on other facilities,
including Interstate 95 in Miami-Dade County.
According to our survey of state transportation officials and our review of
state applications to FHWA tolling pilot programs, a total of 23 states have
plans to build toll road facilities.
23
(Fig. 5 summarizes the status of states’
plans for highway tolling.) Eleven of these states have received the
required environmental clearances and have projects that are under design
or in construction. The remaining 12 states do not have projects that have
proceeded this far, but do have plans to build toll road facilities, according
to their respective state transportation officials. Of these 23 states,
• 16 have existing toll roads and are planning additional toll roads,
24
and
21
Plans for TTC include TTC 35, which is projected to parallel Interstate 35 and Interstate 69.
22
The Central Texas Regional Mobility Authority in the Austin area, the Harris County Toll
Road Authority in the Houston area, and the North Texas Tollway Authority in the Dallas
area.
23
In our count, we included affirmative responses to our survey questions regarding (1)
planned toll road facilities that were in design/right-of-way or construction and (2) plans for
toll road facilities that were not yet in design or construction but for which an
environmental review and Record of Decision had been completed. We compared the
responses to these questions with information obtained from our interviews with state DOT
officials and from state applications to FHWA’s tolling programs, including the Interstate
System Reconstruction and Rehabilitation Pilot Program and the Value Pricing Pilot. In four
instances, data from these sources were inconsistent. We contacted DOT officials in these
states to resolve these inconsistencies and adjusted the survey results accordingly.
24
The 16 states include California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana,
Maine, Maryland, Minnesota, Pennsylvania, South Carolina, Texas, Utah, Virginia, and West
Virginia.
Page 23 GAO-06-554 Highway Finance
• 7 are planning their first toll roads.
25
Figure 5: Planned Toll Road Facilities
25
The 7 states include Alabama, Arkansas, Mississippi, Missouri, North Carolina, Oregon,
and Washington.
Source: GAO.
Pa.
Ore.
Nev.
Idaho
Mont.
Wyo.
Utah
Ariz.
N.Mex.
Colo.
N.Dak.
S.Dak.
Nebr.
Tex.
Kans.
Okla.
Minn.
Iowa
Mo.
Ark.
Ill.
Miss.
Ind.
Ky.
Tenn.
Ala.
Fla.
Ga.
S.C.
N.C.
Va.
Ohio
N.H.
Mass.
Mich.
Calif.
Wash.
Wis.
N.Y.
Maine
Vt.
W.Va.
Alaska
Hawaii
Toll roads in design or under construction
Planned toll roads
No planned toll roads
R.I. ( )
Conn. ( )
N.J. ( )
Del. ( )
Md. ( )
D.C. ( )
Not surveyed
La.
Page 24 GAO-06-554 Highway Finance
Some States Use Tolling to
Address Funding Shortfalls,
Finance New Capacity, and
Manage Congestion; Other
States Find Tolling Not
Feasible or Have Made
Other Choices
Officials in most states planning toll roads indicated that the primary
reasons for considering a tolling approach were to address what state
officials characterized as transportation funding shortfalls, to finance and
build new capacity, and to manage congestion. States that are not planning
to build toll roads have found that tolling is not feasible or have made other
choices.
States Use Tolling to Address
Transportation Funding
Shortfalls
Transportation officials indicated that one of the primary reasons for using
or considering a tolling approach was to respond to what the officials
described as shortfalls in transportation funding. In Georgia, for example,
an official told us that tolling has become a strategy because there is a
significant gap in transportation funding, and the motor fuel tax rate is the
lowest in the country, 7.5 cents per gallon. In North Carolina, where the
North Carolina Turnpike Authority was established in 2002, an official told
us that traditional funding is not adequate to address transportation needs.
North Carolina has estimated that, over the next 25 years, it will need $85
billion in new transportation projects to accommodate the state’s growth.
With a projected shortfall of $30 billion and what the official described as a
lack of political will to increase motor fuel tax rates, the state has adopted
tolling as one strategy to address transportation needs. In Utah, state
transportation officials have estimated a $16.5 billion shortfall through
2030 in funding for highway projects and are considering tolling, along with
other funding alternatives. Finally, an official told us that, in spite of a
motor fuel tax rate increase in 2003 and a $200 million bonding program,
Indiana has a 10-year, $2.8 billion shortfall in highway funding and is
viewing tolling as one financing tool to close the gap. The Indiana DOT has
operated the Interstate 80/Interstate 90 Indiana Toll Road for 50 years and
would like to apply that experience in operating toll roads to new roads.
In other states, transportation officials conducted financial assessments on
specific highway projects and determined that, to complete the projects,
tolling would be required as a source of revenue. For example, in Missouri,
a funding analysis performed by the Missouri DOT found that the estimated
construction costs for the Interstate 70 reconstruction exceed the available
federal, state, and local funding sources, and the project cannot be
advanced without tolling or other revenue increases. Missouri DOT
estimates that the Interstate 70 reconstruction project will cost between
$2.7 and $3.2 billion and that, with a current funding shortfall of $1 billion
Page 25 GAO-06-554 Highway Finance
to $2 billion annually, tolling is being actively considered to close that gap.
26
Likewise, studies by the Texas DOT determined that tolling would be
required on particular highway projects. For example, reconstructing a
23-mile portion of Interstate 10 near Houston was estimated to cost $1.99
billion. Available federal, state, and local funds amounted to $1.75 billion, a
shortfall of $305.2 million. The Harris County Toll Road Authority invested
$238 million for the right to operate tolled lanes within the facility. In
addition, the Texas Transportation Commission, which oversees the state
DOT, ordered that all new controlled-access highways should be
considered as potential toll projects that will undergo toll feasibility
studies. The commission views tolling as a tool that can help stretch limited
state highway dollars further so that transportation needs can be met.
Moreover, states are looking for whatever financial relief tolling can
provide. In some states, tolling is being considered, even though toll
revenues are expected to only partially cover the costs of particular
projects. In Mississippi, for example, the state DOT indicated that tolling
may be advanced if toll revenues cover 25 percent to 50 percent of a
facility’s cost. In Arkansas, tolling is being considered if toll revenues fund
as little as 20 percent of the initial construction costs, provided tolls pay for
operations and maintenance.
To identify state characteristics that are linked with state decisions to toll,
we performed a correlation analysis to examine the relationship between
those decisions and various state demographic and financial
characteristics. Although certain characteristics in a state’s finances and
tax policies might be related to financial need, our correlation analysis
found only limited relationships between various state financial and
demographic measures and states’ decisions to toll or not to toll. For
example, although we found a slight inverse relationship between a state’s
decision to toll and the level of its motor fuel taxes, this relationship is not
strong enough to conclude that states planning toll roads are more likely to
be the ones with lower motor fuel tax rates than other states. However, we
found that both the size of the state, whether measured by population or by
VMT, and whether it is growing rapidly, again measured by population or
VMT growth, are directly related to states’ decisions to toll. (For more
information on the results of our correlation analysis, see app. II.)
26
The Interstate 70 reconstruction project has been approved as one of the slots in the
Interstate System Reconstruction and Rehabilitation Pilot Program. Federal approval is
necessary for states to toll interstate highways.
Page 26 GAO-06-554 Highway Finance
States Use Tolling to Finance
New Capacity
According to transportation officials, states are using or considering a
tolling approach to finance new capacity that cannot otherwise be funded
under current and projected transportation funding scenarios. Such new
capacity may be in the form of new highways or new lanes on existing
highways. For example, in Colorado, the state DOT is studying the
investment of $3 billion in increased highway capacity, with 10 percent, or
$300 million of the investment, coming from federal, state, and local
governments and the remainder coming from tolls. With a $48 billion
shortfall projected through 2030 and the percentage of congested lane-
miles projected to increase by 161 percent, tolling is being considered.
Projections by the state DOT in Colorado suggest that revenues are
sufficient to allow for only spot improvements on a few transportation
corridors over the next 25 years and, without tolling, none can undergo a
major upgrade, and new capacity cannot be added.
Some states are using tolling to supplement their traditional motor fuel tax
transportation funding through private-sector involvement and investment.
Tolling is being used as a means to gain access to private equity and to shift
the investment risk, in part, to the private sector. Currently, 18 states have
some form of public-private partnership (PPP) legislation, allowing for
innovative contracting with the private sector. Many of the 18 states have
PPP programs that were established to allow for toll concession
agreements to finance highway projects. For example, Oregon and Texas
are specifically looking to attract private investment as a new source of
financing. The TTC, as shown in figure 6,
27
is being financed, in part,
through a series of PPPs. The Texas DOT has contracted with Cintra-
Zachry to develop a long-term development plan for the corridor, which
includes the potential to construct and operate the first 316-mile portion of
TTC 35, from Dallas to San Antonio. Cintra-Zachry has pledged an
investment of $6 billion and a payment of $1.2 billion for the right to build,
operate, and collect tolls for up to 50 years on the initial segment of TTC 35.
In Oregon, the Office of Innovative Partnerships and Alternative Funding—
an Oregon DOT office empowered to pursue alternative funding, including
27
This is a conceptual illustration that shows a complete build out. TTC will be phased in as
transportation demand warrants and private sector funding makes it feasible. Since it will
be developed based on transportation demand, it is conceivable that not all elements will be
developed concurrently and may not be located adjacent to each other as shown in the
illustration. Depending on environmental and engineering factors, transportation modes
may diverge. Input from the ongoing public meetings will help determine plans for the TTC.
Two projects are being pursued by Texas DOT, TTC 35 and TTC 69. Both are under
environmental review, and neither right-of-way acquisition nor construction has been
federally approved.
Page 27 GAO-06-554 Highway Finance
private investment through tolling—has received proposals from the
Oregon Transportation Improvement Group, a consortium led by the
Macquarie Infrastructure Group, to complete two tolled facilities in the
Portland area. In both Texas and Oregon, the projects were approved under
SEP-15, which enabled the two states to waive certain federal requirements
and to negotiate with the project developers before awarding contracts.
Acceptance of the projects under SEP-15 does not commit federal-aid
funding for the projects, and FHWA retains the right to declare the project
ineligible for federal-aid funds at any time during the SEP-15 process until
there is formal FHWA project approval.
Figure 6: Conceptual Drawing of the Trans Texas Corridor
Growing freight traffic is also prompting some states to consider using tolls
to pay for capacity enhancement. Examples include Interstate 81 in Virginia
and Interstate 70 in Missouri. According to the original design of Interstate
81, built beginning in 1957, truck traffic would account for 15 percent of
traffic on the highway; truck traffic now accounts for up to 35
Source: Texas Department of Transportation.
Page 28 GAO-06-554 Highway Finance
percent, and traffic levels are expected to double by 2035. Interstate 70,
originally designed to carry up to 14,000 vehicles per day in rural areas,
now carries up to 58,000 per day, and truck traffic, which was intended to
be 10 percent of total traffic, is now 25 percent. Both interstates are major
freight routes where truck traffic is expected to continue to increase. In
2003, the Virginia DOT received FHWA conditional provisional approval
under the Interstate System Reconstruction and Rehabilitation Pilot
Program to toll vehicles other than cars and pickup trucks (freight trucks
and buses) on Interstate 81. Likewise, for Interstate 70, the Missouri DOT
received conditional provisional approval in July 2005 to participate in the
same pilot program. In certain cases, proposals for truck-only toll (TOT)
lanes seek to manage congestion while increasing capacity by diverting
trucks from passenger routes to dedicated lanes. TOT lanes are being
considered on heavy freight routes, including Interstate 81 in Virginia, TTC
in Texas (see fig. 7), and routes throughout the Atlanta Metropolitan Region
in Georgia.
States Use Tolling to Manage
Congestion
While growing congestion and traffic volumes have increased the demand
for additional highway capacity, transportation officials told us that tolling
is being considered as a tool to manage congestion. Applying tolls that vary
with the level of congestion—congestion pricing—can reduce congestion
and the demand for roads because tolls that vary according to the level of
congestion can be used to maintain a predetermined level of service. Such
tolls create additional incentives for drivers to avoid driving alone in
congested conditions when making driving decisions. In response, drivers
may choose to share rides, use public transportation, travel at less
congested (generally off-peak) times, or travel on less congested routes, if
available, to reduce their toll payments.
Tolling for congestion management can take the form of HOT lanes, which
are adjacent to nontolled lanes. HOT lanes are used to manage congestion
by creating a tolling structure that varies toll prices according to the level
of congestion. Such a tolling structure can reflect the external costs that
users of the facility impose on others. In some cases, HOV lanes that had
been underused have been converted to HOT lanes, allowing HOVs to
continue to use the lane as an HOV lane but allowing single-occupancy
vehicles to use the lane provided they are willing to pay a toll. In 5 of the 23
states planning toll roads, efforts to manage congestion on existing
capacity is prompting tolling. California, Colorado, Texas, Virginia, and
Washington all have HOT lane projects planned that will use variably priced
tolls to alleviate congestion by managing the level of traffic. All of these
states have received grants under FHWA’s Value Pricing Pilot to either
Page 29 GAO-06-554 Highway Finance
develop or implement the projects. In California, the State Route 91
Express Lanes, as shown in figure 7, opened in 1995, and the Interstate 15
Express Lanes, opened in 1998, have dedicated, tolled lanes where the flow
of traffic is managed through toll prices that vary daily and hourly. Tolls on
State Route 91 range from as little as $1.10 to as much as $8.50. During
periods of heavier demand and congestion, toll prices are higher so that
fewer people will use the lanes, and a consistent flow of traffic can be
maintained. In Texas, the Katy Freeway in Houston was originally designed
to carry 80,000 vehicles per day. With traffic now exceeding 200,000
vehicles per day, the Texas DOT, in cooperation with FHWA, opened HOV-3
lanes (lanes that could only be used by carpools of 3 or more passengers)
to vehicles with two passengers who pay a toll as express toll lanes in 1998.
Texas DOT is also building managed lanes, scheduled to open in 2009, that
will have peak toll pricing between 6:00 a.m. and 11:00 a.m. and between
2:00 p.m. and 8:00 p.m. The result, in both cases, is a system in which
commuters pay a toll for access to less congested lanes. More recently, in
Minnesota, where Minneapolis and St. Paul have been experiencing rapid
growth in congestion and, according to the Minnesota DOT, HOV lanes
were underused, the state legislature authorized the conversion of the
Interstate 394 HOV lanes to HOT lanes. The Interstate 394 MnPASS optional
toll lanes project opened in May 2005 with “dynamic pricing” to adjust tolls
from anywhere from 25 cents to $8.00, according to traffic levels.
Page 30 GAO-06-554 Highway Finance
Figure 7: California State Route 91 Express Lanes and Toll Rates
Note: Shading represents varying toll prices.
In some states, tolling or variable pricing—in which toll rates differ
depending on conditions such as the time of day or location—is used
specifically to manage freight congestion. In October 2005, for example, the
Delaware DOT launched an initiative designed to address problems with
freight congestion on the Delaware Turnpike (Interstate 95) by encouraging
trucks to travel at night. Tolls on trucks between 10:00 p.m. and 6:00 a.m.
are 75 percent less than tolls during more congested daytime hours.
Another effort that incorporates variable pricing, but is not a traditional
form of facility-based tolling, is a road user fee system that is being
developed with an FHWA Value Pricing Pilot grant by the Oregon Office of
Innovative Partnerships and Alternative Funding in cooperation with
Oregon State University. The system assesses mileage-based fees in place
of motor fuels taxes, and the fees vary for miles traveled during rush hour
and within cordoned downtown areas.
Toll prices by time of day
(Eastbound
– Friday)
as of February 2006
$0.00
0.00
2.70
4.20
4.20
8.50
7.75
7.00
4.60
4.25
3.85
2.45
$1.80
10:00 a.m.
11:00 a.m.
Noon
1:00 p.m.
2:00 p.m.
3:00 p.m.
4:00 p.m.
5:00 p.m.
6:00 p.m.
7:00 p.m.
8:00 p.m.
9:00 p.m.
10:00 p.m.
Source: Orange County Transportation Authority.
Tol l lanes and HOV3+ (left) and general traffic lanes (right)
Page 31 GAO-06-554 Highway Finance
Many States Find That
Tolling Is Not Feasible or
Have Made Other Choices
The reason most frequently cited by state transportation officials for not
tolling is that tolling is not feasible. More specifically, there is little need for
new tolled capacity, tolling revenues would be insufficient, or there is
public and political opposition to tolling as follows:
• Little need for new tolled capacity. Transportation officials in many
states indicated that low traffic volumes, a lack of congestion, and low
demands for additional capacity make tolling impractical. In states such
as Montana, North Dakota, South Dakota, and Wyoming, the population
density and percentages of urban vehicle miles traveled are too low to
support tolling.
• Insufficient revenues. In some states, tolling is not considered
because toll revenues would not cover the costs of projects. In some
cases, the issue involves traffic volumes that are so low that a tolling
approach would be impractical. In those states, transportation officials
explained that even if a tolling approach were to be considered, tolls
would have to be prohibitively high to fund capacity enhancements and
would likely result in traffic diversion to nontolled, alternative routes.
For example, a transportation official in Kansas told us that there are
few routes in Kansas that have a high enough level of traffic to make
them viable for tolling. Therefore, opportunities for tolling are limited
under the classic definition of feasibility, for which toll revenue must be
adequate to fund construction, maintenance, and operations of a facility.
Under this definition, most roads would not generate sufficient revenues
from tolls to fund new highway capacity. In other cases, where traffic
volumes are higher, transportation officials told us that a tolling
approach is not even considered unless it can be demonstrated that the
project will be self-sustaining. In Massachusetts, for example, an
evaluation of HOT lanes determined that the toll rates people would be
willing to pay would not raise enough revenue to fund the capital
expenses to construct the facility.
• Public and political opposition. Officials from many states that are
not pursuing tolling mentioned some form of public or political
opposition to toll roads that has dissuaded transportation professionals
from pursuing tolling. The public or political opposition is so strong,
according to officials in some states, that tolling is studied only with
great caution and sensitivity, if at all. While some states mentioned the
lack of a tolling culture as a reason for not tolling, other states that have
tolled roads for years cited the long-standing presence of toll roads as a
reason for not planning to expand tolling. In New Jersey, New
Page 32 GAO-06-554 Highway Finance
Hampshire, and Ohio—states with long-established toll roads—state
officials said the presence of tolls has instilled public opposition to
them. For example, New Jersey officials told us that opposition to new
toll roads is strong because many state border crossings and major
highways are already tolled. In other cases, DOTs face political
opposition to tolling. In Mississippi, where other toll projects are still
being considered, the state DOT withdrew its application to toll
Interstate 10 under the Interstate System Reconstruction and
Rehabilitation Pilot Program in response to political opposition.
States that do not toll and are not planning to construct toll roads have also
chosen options other than tolling to finance highway construction and
maintenance. For example, 13 states that are not planning toll roads have
used “GARVEE bonds” as grant anticipation financing to borrow funds and
pledge future federal-aid highway revenues for repayment. South Carolina
used state infrastructure bank loans and federal credit assistance, along
with state and local funds, for its “27 in 7 Accelerated Program” through
which it is completing $5 billion worth of highway infrastructure capacity
and improvements in 7 years, compared with the 27 years it estimated
would be needed under conventional financing means. A smaller number of
states, such as Iowa and Tennessee, have remained committed to a
primarily pay-as-you-go approach, building new capacity only when money
becomes available through motor fuel tax revenues or other state revenues.
States That Are
Considering and
Implementing a Tolling
Approach Face Two
Broad Types of
Challenges
Drawing on our analyses of states’ experience with tolling and on a review
of selected published research on tolling, we have identified two broad
types of challenges that transportation officials have encountered when
attempting to implement tolling: (1) the difficulty of obtaining political and
public support in the face of opposition from the public and political
leaders and (2) the difficulty of implementing tolling given a lack of, or
overly restrictive, enabling toll legislation; concerns about potential traffic
diversion resulting from toll projects; and a need to coordinate with other
states and regions when toll projects cross jurisdictional boundaries. (See
fig. 8.) While these two broad types of challenges may make a tolling
approach difficult to adopt or implement, states have nevertheless
identified specific ways to resolve or mitigate the challenges. We discuss
the strategies that states have used to address tolling challenges in the
following section of this report.
Page 33 GAO-06-554 Highway Finance
Figure 8: Challenges to Tolling
Garnering Political and
Public Support Is the Most
Often Cited Challenge to
Tolling
State transportation officials who are implementing or are considering
implementing tolling say that garnering political and public support is
perhaps the greatest challenge to tolling. Some studies have also reported
this challenge. For example, in a recently issued report, the Transportation
Research Board cited studies that identified the unpopularity of toll roads
and public skepticism as fundamental obstacles to employing a tolling
approach.
28
The report identified the inconvenience of paying tolls, being
forced to pay twice, and inequities that a tolling approach would produce
as the most commonly expressed objections.
29
The Congressional Budget
Office noted in its report that opponents of toll roads often charge that
such roads are unfair to motorists with low incomes who may not be able
to afford them. This concern is intensified if it involves trips to work and
the motorist has few alternatives.
30
In a policy brief issued by the Brookings
Institution, the author notes that a drawback of tolls is that people think
these tolls would be just another tax, forcing them to pay for something
Challenges in obtaining support
• Tolls amount to another tax
• Tolls produce inequities
− geographic
− income
− user
Implementation-related challenges
• Coordinating
• Securing legislative authority
• Addressing impact of diversion
Source: GAO analysis of information provided by state transportation officials.
• Projects are not self-sustaining
28
Transportation Research Board, “Special Report 285: The Fuel Tax and Alternatives for
Transportation Funding” (Washington, D.C.: 2005).
29
At the same time, the study acknowledged that the evidence on public opinion is mixed
and that some toll roads find public acceptance.
30
Congressional Budget Office, CBO Memorandum: Toll Roads: A Review of Recent
Experience (Washington, D.C.: February 1997).
Page 34 GAO-06-554 Highway Finance
they have already paid for through gasoline taxes.
31
We have also noted in
prior work that political opposition to tolling has been substantial because
of concerns about equity and fairness.
32
According to our analysis, a
number of factors influence public and political perceptions about tolling.
(See fig. 9.)
Figure 9: Challenges to Tolling
Double taxation arguments. The most frequent objection to tolls is the
argument that motorists traveling on toll roads are being asked to pay
twice; that is, a new roadway toll is being levied in addition to existing
taxes. States have a number of dedicated sources of revenues that are used
to finance highway capital programs. According to transportation experts,
the public generally believes that transportation costs are already being
paid for through motor fuel, property, and sales taxes, as well as license
and registration fees, and in the case of trucks, special tire taxes and
weight-distance fees. Therefore, new road user fees, such as tolls, are often
viewed as new taxes.
Transportation officials in a number of states reported that concerns about
double taxation limited their consideration of a tolling approach to varying
degrees. In Wisconsin, where tolling is not being implemented, a
transportation official told us that the public understands that the fuel
31
The Brookings Institution, Policy Brief: Traffic: Why It’s Getting Worse, What
Government Can Do (Washington, D.C.: January 2004).
32
GAO-03-735T.
Challenges in obtaining support
• Tolls amount to another tax
• Tolls produce inequities
− geographic
− income
− user
Implementation-related challenges
• Coordinating
• Securing legislative authority
• Addressing impact of diversion
Source: GAO analysis of information provided by state transportation officials.
• Projects are not self-sustaining
Page 35 GAO-06-554 Highway Finance
excise tax and other user fees are used to fund highway construction.
Therefore, the public would view tolling as another tax being imposed on
them. This type of concern can be compounded when tolls are being
proposed for an existing facility. For example, in Missouri, consideration of
tolling to pay for Interstate 70’s reconstruction faced opposition, in part,
because the public believes that the interstate highway has already been
paid for, according to state DOT officials. Missouri citizens generally regard
tolls as government’s way of making users pay again, according to state
transportation officials. This view is supported by Missouri’s history of
commitment to free roads. Citizens in Texas have voiced similar arguments
against tolls. In Houston, for example, plans to convert State Highway 249
to a tolled road have met with some resistance on the grounds of double
taxation. At the public hearing organized to hear views on the conversion,
officials estimated that an overwhelming majority of those in attendance
were against the conversion because they felt that the road had already
been paid for. Strong opposition can arise even before a roadway has been
completed. A proposal to toll a nearly completed portion of U.S. Route 183
north of Austin was retracted after citizens expressed strong opposition.
Transportation officials told us that these citizens believed that since the
road was nearly complete, introducing tolls would amount to double
taxation.
Projects are not self-sustaining. Transportation officials told us that
they often find it difficult to demonstrate that tolling is reasonable and
necessary because revenues collected from toll projects usually do not
fully cover project costs. In Oregon, for example, a financial analysis of toll
proposals indicated that the proposals under consideration would not be
economically feasible through the collection of tolls alone, according to
transportation officials. A private consortium was selected to negotiate
with the state DOT for the purpose of advancing the projects. However, in
the view of this consortium, the new toll road can be financially viable only
if existing parallel roads are tolled. In some states, transportation officials
stated toll projects are not even considered unless it can be demonstrated
that the project will be self-sustaining. In Kentucky, for example, a
transportation official told us that traffic volumes alone can rarely
financially sustain rural roads through tolling and emphasized that it would
be difficult to garner public support for a toll project that required partial
subsidization. A transportation official in Arkansas told us that while
tolling is considered if revenues fund at least 20 percent of initial
construction costs, a toll project would only be considered if it can be
shown that toll revenues would cover all operations and maintenance
costs. In Florida, toll proposals must pass a financial feasibility test and
Page 36 GAO-06-554 Highway Finance
prove that the proposed projects will be self-sustaining before the projects
are further considered for advancement. According to Florida Turnpike
Enterprise officials, the standard for feasibility is that by the twelfth year of
operation, projected revenues must cover at least 50 percent of operating
costs and debt service and by the twenty-second year of operation,
projected revenues must cover all costs and debt service.
Concerns about inequities. Another objection to the use of tolling
involves concerns about the inequities that the approach would produce.
According to our review, groups that could be adversely affected by tolling
often object, as follows, on the basis of geographic inequity, income
inequity, and user inequity:
• Geographic inequity. Concerns about geographic inequity reflect
the belief that certain regions will benefit disproportionately from a
tolling approach while other regions will be unfairly disadvantaged.
Using a tolling approach to address a transportation need in one part
of a state might free up federal and state funding that might have
otherwise been used to address that need. This available federal and
state funding could then be used to support roads in another part of
the state, creating an unfair burden on those motorists that are being
tolled. In Florida, for example, there have been concerns about the
distribution and use of funds collected for projects in one region
(southern Florida) being distributed to and used for projects in
another region of the state (northern Florida). In the 1990s, three
southern counties—Palm Beach, Broward, and Dade—secured
legislation that would require the Florida Turnpike Enterprise to
calculate the dollar amount collected in those counties and
determine how much of that amount was returned to the counties to
be used on their facilities. As a result, the Florida Turnpike
Enterprise created a formula to implement that law, reflecting the
need to balance collections in those counties with what is being
spent on facilities in those counties.
• Income inequity. Concerns about the unequal ability of lower-
income and higher-income groups to pay tolls are often cited by
transportation experts as an important political barrier to the
Page 37 GAO-06-554 Highway Finance
acceptance of a tolling approach.
33
Those opposing tolls on the basis
of income inequity argue that since tolls would represent a higher
portion of the earnings of lower-income households using the tolled
road, tolling imposes a greater financial burden on them and,
therefore, is unfair. In Maryland, this concern resulted in removing
HOT lanes from consideration in state transportation plans,
according to FHWA. In June 2001, the governor decided to remove
HOT lanes from the state transportation plan because of the
perceived inequity of linking an easier commute with a person’s
ability to pay. However, in the following year, the governor’s office
initiated a revised feasibility study of value pricing that included
investigating and addressing the equity issues that were raised
earlier, while encouraging the air quality and congestion relief
benefits of HOV lanes.
• User inequity. User inequity involves the belief that some classes of
system users are being unfairly disadvantaged. The trucking industry,
freight industry, and businesses may view tolling in this light. For
example, a transportation official in Virginia told us that a proposal
to toll only trucks on Interstate 81 is generally viewed by truckers as
an unfair burden being imposed on them. This transportation official
also noted that if the proposal is implemented, truckers will seek
alternative routes to avoid the tolls. In Missouri, officials
representing fuel marketers, fuel retailers, gas stations, and
convenience stores told us that they consider a tolling proposal
unfair. According to the industry officials, these businesses have
spent millions of dollars on their exit locations along the interstate
and believe they have paid their fair share of taxes. Consideration of
a tolling approach to enhance mobility on the interstate could
potentially have an adverse impact on these businesses because
some customers may choose alternative routes.
General views on government. According to transportation officials
with whom we spoke, public opposition to tolling can be exacerbated by a
33
Transportation Research Board, “Special Report 285: The Fuel Tax and Alternatives for
Transportation Funding” (Washington, D.C.: 2005) and Road Value Pricing: Traveler
Response to Transportation System Changes (Washington, D.C.: October 2003); Brookings
Institution, Traffic: Why It’s Getting Worse, What Government Can Do (Washington, D.C.:
January 2004); Congressional Budget Office, CBO Testimony: Congestion Pricing for
Highways (Washington, D.C.: May 6, 2003) and CBO Memorandum: Toll Roads: A Review
of Recent Experience (Washington, D.C.: February 1997); and GAO-03-735T.
Page 38 GAO-06-554 Highway Finance
mistrust of government generally. They said that when government
proposes tolls as a way to finance transportation, the public generally
considers the tolls as a new tax.
This mistrust can also be directed specifically at state transportation
departments. For example, in 1992, the Missouri DOT proposed a 15-year
plan that included a number of promised projects that would be
undertaken with an increase in the state’s gas tax. However, according to
state transportation officials, after gaining support for the increase, the
state DOT did not deliver the promised projects as scheduled. These
officials said this failure to deliver contributed to the public’s mistrust of
the DOT and its resistance to attempts by the DOT to secure toll authority
over the years. In some states, concerns about the cost and management of
major highway and bridge programs have reflected dissatisfaction with the
performance of state transportation departments. For instance, as we
reported in 2002, a legislative commission in Virginia reported on cost
overruns and schedule delays in the state’s highway program in 2000 and
found that cost estimates prepared for projects were substantially below
the final costs. This commission identified a potential funding gap of
around $3.5 billion in the state’s $9 billion, 6-year transportation plan. Such
concerns about past performance can present challenges for transportation
officials who are attempting to advance a tolling approach.
Mistrust can also extend to private entities involved in toll road
development. As we reported in 2004, states engaging private-sector
sponsorship and investment can relinquish political control over their
ability to set toll rates and to carry out infrastructure improvements on
competing publicly owned roadways. For example, California could not
make any improvements along State Route 91—a project privately financed
with a combination of equity, bank, and institutional debt—until the year
2030 because a noncompete clause created a 1.5 mile protection zone along
each side of the corridor. According to officials from the Orange County
Transportation Authority, public pressure on the state DOT to improve the
nontolled portion of the road motivated the county to purchase the road
back from the private consortium.
Page 39 GAO-06-554 Highway Finance
State and Local
Transportation Officials
Face Formidable Challenges
in Implementing Tolling
Approaches
In some states, transportation officials told us that they face challenges in
implementing toll projects. (See fig. 10.) We identified the following three
implementation-related challenges:
• Secure legislative authority to toll.
• Address the impact of traffic diversion caused by tolling.
• Coordinate with other states or regions.
Figure 10: Challenges to Tolling
Secure the authority to toll. Not having, or having restrictions built into,
enabling toll legislation poses a challenge for some transportation officials
as they develop tolling options. They told us that limited legislative
authority for tolling hampered their ability to consider a full range of
options to address the transportation needs in their states. Ultimately,
these transportation officials sought methods other than tolling to address
transportation needs or delayed the development of an identified toll
project as they pursued tolling legislation.
Missouri’s experience illustrates the challenges transportation officials face
when the state DOT does not have the statutory authority to use a tolling
approach to advance a project. State transportation officials are
considering turning Interstate 70 into a toll road to finance capacity
improvements. However, voters would first have to approve an amendment
to the state constitution to put toll roads under the state DOT’s
jurisdiction—a measure that voters rejected in 1970 and 1992. To avoid
another rejection, state DOT officials are exploring alternative financing
Challenges in obtaining support
• Tolls amount to another tax
• Tolls produce inequities
− geographic
− income
− user
Implementation-related challenges
• Coordinating
• Securing legislative authority
• Addressing impact of diversion
Source: GAO analysis of information provided by state transportation officials.
• Projects are not self-sustaining
Page 40 GAO-06-554 Highway Finance
methods under existing authority, including the use of a nonprofit
corporation to build, operate, and maintain the toll project. Transportation
officials emphasize, however, that under this option, the entity would not
be able to spend state highway revenues for the project—the same
restriction that would prevent the state DOT from advancing a toll
project—because state funds can be used only for the purposes
enumerated in the state constitution, and toll roads were not one of those
purposes.
Restrictions in enabling legislation can also hamper attempts to implement
toll projects. For example, in the mid-1990s, the Minnesota legislature
authorized a study of public-private partnerships and tolling as one
approach to address congestion and leverage state transportation
investments. In conjunction with that study, the state DOT requested
public-private partnership tolling proposals and received five proposals in
response from private firms. Ultimately, the state DOT recommended a
proposal to build Trunk Highway 212 as a toll facility and proceeded to
complete a development agreement with a private partner. However, the
proposal was vetoed under the provision of the enabling legislation that
gives veto authority to local units of government affected by a project. As a
result, the Trunk Highway 212 project is now being completed under
traditional methods and, according to transportation officials, is taking
longer to complete due to funding limitations. New legislation, passed in
2003, eliminated the local veto authority for converting HOV lanes to HOT
lanes on existing facilities, giving transportation officials more flexibility to
implement a tolling approach. This legislation, which followed a DOT study
of HOV lane usage on Interstate 394, authorizes the conversion of the HOV
lanes on Interstate 394 to HOT lanes to improve their efficiency.
Subsequently, through a design-build-operate agreement, a private partner
was secured to bring resources to the table and run the operation.
Address concerns about traffic diversion. Traffic diversion resulting
from tolling may adversely affect people, municipalities, and businesses.
Concerns about such diversion have surfaced in comments by
municipalities, businesses, and the trucking industry on a proposal to toll
trucks on Interstate 81 in Virginia, according to state transportation
officials. Affected Virginia municipalities have suggested, for example, that
trucks will leave the interstate to avoid tolls and wind up on local roads.
Such diversion has the potential to create congestion, increase accident
and fatality rates, and increase the municipalities’ costs of maintaining
these roads. The affected municipalities have also expressed concerns
about the potential negative effects on economic development that may
Page 41 GAO-06-554 Highway Finance
result from the loss of business along toll routes. According to a recently
completed study that considered a number of different proposals, traffic
diversion is likely to occur if Interstate 81 is tolled.
34
The study estimated
that up to one in four trucks would divert to nearby parallel routes if a high
toll rate
35
was applied to commercial vehicles.
Concerns about traffic diversion are not limited to new toll roads. The Ohio
Turnpike opened in the 1950s and, in the 1990s, traffic studies revealed that
commercial vehicles were increasingly diverting onto parallel untolled
roads, creating safety and other concerns. In response, the governor
released the Northern Ohio Freight Strategy in October 2004, which
included a policy to reduce tolls on commercial vehicles in order to
redirect traffic back to the Ohio Turnpike. Subsequent traffic studies
revealed this strategy was mostly successful.
Coordinate on projects that involve multiple states or jurisdictions.
Coordination among states and regional jurisdictions is likely to become a
growing issue because increasing traffic congestion in metropolitan areas
is likely to require regional solutions. Without good coordination with
neighboring jurisdictions, individual jurisdictions may find it difficult to
solve traffic congestion. Even if one jurisdiction manages to reduce
congestion within its system, it may simply shift that congestion to an
adjacent jurisdiction. Yet numerous factors could make coordination
difficult. For example, the need for coordination is especially critical if
states adopt separate tolling legislation with varying, perhaps incompatible,
provisions and begin tolling. Other potential challenges include ensuring
the interoperability of toll collection facilities when toll proposals involve
more than one state, addressing differences in state toll legislation, and
mitigating geographic inequities by fairly apportioning the anticipated
benefits and disadvantages of toll projects among all stakeholders.
Oregon’s experience illustrates how some of these issues might present
challenges for transportation officials who are attempting to advance
interstate toll projects. Oregon officials cited differing statutory authorities
34
U.S. DOT, Federal Highway Administration, and the Virginia Department of Transportation,
I-81 Corridor Improvement Study: Tier 1 Draft Environmental Impact Statement,
November 28, 2005.
35
The study estimated that 12 percent would divert to nearby parallel routes if a low toll rate
was applied to commercial vehicles. The study used a high toll rate of $0.07 per mile per axle
and a low toll rate of $0.04 per mile per axle.
Page 42 GAO-06-554 Highway Finance
between Oregon and neighboring Washington as a potential coordination
issue. In Oregon, transportation officials have the authority to enter into
PPPs when advancing a tolling approach, while their counterparts in
Washington do not yet have the authority to do so if proposals for
partnerships are unsolicited. As a result, stakeholders involved with the
Columbia River Crossing Project on Interstate 5, which Oregon officials are
attempting to pursue as a toll project with a private partner, are seeking to
promote legislation in both states that will provide explicit authorization to
advance the project. The Oregon officials also noted that coordination
would be necessary to address geographic inequities that might arise from
the project, explaining that more of the toll revenues could come from
Washington, since motorists there commute into Portland. Transportation
officials in both states will need to take this into account as they work
towards an equitable apportioning of the project’s costs and benefits.
Three Broad Strategies
Can Help State
Transportation
Officials Address
Challenges to Tolling
As shown in figure 11, our review of state practices in implementing tolling
suggests three broad strategies that can help transportation officials
address challenges to its adoption and implementation. These strategies
have both short-term and long-term relevance for states as they consider
new transportation finance options to supplement traditional approaches.
Transportation officials in states that are currently implementing or
considering tolling as a means to raise revenue or mitigate congestion can
consider these strategies in the short term to build support and smooth
implementation of the tolling approaches under consideration. In the
longer term, transportation officials in states that are not currently tolling,
but choose to begin to do so, can consider these strategies to build support
for tolling.
Figure 11: Strategies to Address Challenges to Tolling
Source: GAO analysis of information provided by state transportation officials.
Develop an institutional framework that facilitates tolling
Provide leadership to build support for projects that have addressed tolling challenges
Select a tolling approach that provides tangible benefits to users
Page 43 GAO-06-554 Highway Finance
Develop an Institutional
Framework That Supports
Tolling
The first strategy that transportation officials can consider involves
developing an institutional framework that facilitates tolling. In developing
such a framework, transportation officials can consider building support
for a tolling approach with the public and decision makers in the state and
securing enabling tolling legislation. (See fig. 12.) Developing such a
framework through these two means involves identifying and articulating
the goals to be achieved by the tolling approach in the context of larger
state policy goals.
Figure 12: Strategies to Address Challenges to Tolling
Building support. Building support for a tolling approach includes two
interim steps—establishing a rationale for tolling and defining the
underlying motivations for its use. Together, these steps provide a basis for
gaining political and public support before seeking and securing adequate
tolling legislation.
Establishing a solid rationale for tolling involves linking the specific
reasons, or goals, for tolling with state policy goals for transportation.
36
For
example, linking a tolling goal, such as managing congestion, to a broader
state goal, such as using existing infrastructure more efficiently, can
provide a basis for its use. Similarly, a tolling goal of supplementing
transportation funding with new revenues could contribute to a broad state
36
This discussion of tolling goals assumes that the approach makes economic sense and is a
viable and reasonable option for making transportation improvements in the state. It also
assumes that all options under consideration for transportation improvements have been
assessed in an adequate context. When it is determined that a tolling approach is a viable
and reasonable option for making transportation improvements and should, therefore, be
made available as another tool to finance transportation, the development of tolling goals
can help transportation officials strengthen their case for tolling.
Source: GAO analysis of information provided by state transportation officials.
Develop an institutional framework that facilitates tolling
Provide leadership to build support for projects that have addressed tolling challenges
Select a tolling approach that provides tangible benefits to users
Page 44 GAO-06-554 Highway Finance
policy goal of funding investment in transportation systems with revenues
generated directly from users.
Articulating the underlying motivations for using a tolling approach can
also help transportation officials build support for and accomplish broader
transportation goals and tailor tolling goals to accomplish those ends. For
example, consideration of a tolling approach might be motivated by a
desire to accomplish other goals, such as finding a replacement for the gas
tax or attracting private investment for transportation. Irrespective of the
motivations that guide the development of the goals, advocates of tolling
have to make a compelling case for its use to build public acceptance for it
and make it politically viable. Goal setting can help transportation officials
articulate the motivations for using the approach, identify the goals to be
achieved by its use, and demonstrate how the tolling goals will tie into
broader state goals. Such a process can help decision makers formulate a
transparent and comprehensive rationale for the use of tolling and gain
public and political support for it.
Secure legislative authority. Securing tolling legislation is the next step
in developing an institutional framework for tolling. Although there are
common reasons for tolling, the form legislation takes in each state often
depends on the motivations for using the approach and ultimately the goals
to be achieved through it. Our review of legislative efforts in Texas,
Virginia, Oregon, and Florida illustrates how legislation evolved in
response to different motivations and tolling goals. Following are some of
these legislative efforts:
• Leveraging transportation dollars. Texas enacted legislation that
provided for a broader application of tolling than currently existed
and established a funding mechanism that supported a broader use of
tolls in the state’s transportation system.
37
This legislation facilitates
tolling by realizing two goals—to expand the use of tolling and to
leverage tax dollars by allowing state highway funds to be combined
with other funds to build toll roads. This combination of funds makes
toll roads more feasible, since the entire cost of the project does not
have to be repaid with tolls. Virginia’s Public-Private Transportation
37
2003 Tex. Sess. Law Service, Ch. 1325. The bill provided for the establishment of the TTC,
establishment of guidelines for the creation of Regional Mobility Authorities, use of PPPs,
provision of toll equity money for new toll projects, and application of tolls on nontolled
roads.
Page 45 GAO-06-554 Highway Finance
Act of 1995 (PPTA) allows qualifying local governments and certain
other political entities to enter into agreements authorizing private
entities to acquire, construct, improve, maintain, and operate
qualifying transportation facilities. The public entities may either
solicit or accept unsolicited proposals from private sources. Private-
sector sponsorship and investment in transportation projects could
help states realize both an established tolling goal to accelerate
project delivery and a goal to leverage tax dollars by securing private
investment in transportation projects.
• Operating like a business. In some cases, there is a motivation to
“reinvent government” by operating in a more businesslike manner.
Public agencies of all types have pursued innovation and best
practices found in the private sector to improve the cost-
effectiveness and timeliness of product delivery. A goal that
embodies these motivations can take many forms in legislation. In
Florida, for example, legislation was passed in 2002 that turned the
Florida Turnpike, operated by the Florida DOT, into a business
organization as a way to preserve, improve, and expand the turnpike
system. State decision makers were interested in operating the
turnpike as a business for the state and employing private-sector
methods in the areas of management, finance, organization, and
operation. The goals for the enterprise are to increase revenues,
expand capital program capabilities, and improve customer service.
• Transitioning to a new system of transportation finance. The
sustainability of the current financing system has been called into
question, and as we have reported, a fundamental reexamination of
the present system will be necessary to increase the cost-
effectiveness of spending and to mitigate congestion.
38
Some
transportation experts believe that shifting to a fee structure that
more directly charges vehicle operators for their actual use of roads
would improve the operation of the road system and better target
investment. For example, Oregon’s efforts to explore mileage charges
provide some insights into how legislation can be developed to carry
out such an ambitious goal. A road user fee proposal, passed by the
state legislature in 2001, created a user fee task force to design a
method of charging drivers for their use of the state’s roads as an
38
GAO, 21
st
Century Challenges: Reexamining the Base of the Federal Government, GAO-
05-325SP (Washington, D.C.: February 2005).
Page 46 GAO-06-554 Highway Finance
alternative to the current system of gas taxes. The task force
proposed the eventual imposition of a mileage fee in place of existing
gas taxes and pilot testing for the mileage fee as the first step toward
implementation. An institutional framework, such as the framework
under development in Oregon, can help states that are seeking to test
or implement new methods of highway financing to realize such
goals.
Provide Leadership to Build
Support for Individual
Projects and Address
Tolling Challenges in
Project Design
The second strategy that can facilitate the use of tolling involves
implementing two interrelated and critical components: (1) providing
leadership to build support for and advance individual projects and (2)
addressing challenges to tolling in project design. (See fig. 13.) We have
found that having a strong advocate or advocates—committed both to
building support for projects and to ensuring that the projects move
forward—is crucial to the success of a project. A corollary to providing
committed leadership is ensuring that leaders endorse those projects that
most effectively address challenges to tolling in project design.
Figure 13: Strategies to Address Challenges to Tolling
Providing leadership. Although leadership can take different forms, our
review revealed that a strong advocate can help build support for a toll
project. Transportation agency representatives or political leaders are
likely candidates to move a project to public acceptance. For example, in
Texas, the Governor and key legislators took the lead in developing and
supporting initiatives that would facilitate the use of tolling to finance
highway construction. Their efforts led to the enactment of legislation that
enabled the state DOT to invest in toll projects. In Indiana, the Governor
and the DOT Commissioner have supported tolling as an approach to
finance transportation projects by promoting it in the media and in the
Source: GAO analysis of information provided by state transportation officials.
Develop an institutional framework that facilitates tolling
Provide leadership to build support for projects that have addressed tolling challenges
Select a tolling approach that provides tangible benefits to users
Page 47 GAO-06-554 Highway Finance
legislature. However, in some instances, public distrust of political and
governmental agencies may require a leader to emerge from another arena.
For example, in Minnesota, a task force of state and local officials, citizens,
and business leaders was convened in 2001 to explore a range of road
pricing options, including the conversion of HOV lanes to HOT lanes, and
make recommendations to elected officials. Since tolling had been fairly
controversial in the past, decision makers believed that a task force would
provide a more credible and independent voice to the general public.
Ultimately, the task force supported HOV to HOT conversions, and with the
Governor’s support and the passage of legislation authorizing the
conversion, the Interstate 394 HOT lanes project was implemented.
As a spokesperson for a project, a leader can explain to the public how
tolling will address a state’s particular transportation situation. Through
the communication of essential ideas and values that a toll proposal
encompasses, support for the project can be solidified. Communicating the
benefits that tolling can provide for motorists, such as increased efficiency,
travel time savings, and choices about when and where to drive, could
increase the likelihood of buy-in from the public and political leaders. For
example, after examining congestion pricing options in Minnesota, a task
force of state legislators, mayors, as well as business, environmental, and
transportation leaders recommended that the state should proceed with a
demonstration project. This led to the passage of legislation in 2003
supporting the conversion of HOV lanes on Interstate 394 into optional toll
lanes, which would allow solo drivers to access the HOV lanes for a fee.
With the help of a communications consultant, a project team led by the
University of Minnesota’s Hubert H. Humphrey Institute worked to address
the concerns of the public and communicate the benefits of the project to
the general public. The primary benefits of the project that were conveyed
included free access and priority for carpools and bus users, premium
speeds in express lanes that are maintained by tolls that vary with demand,
and access to the express lanes to single-occupancy vehicles willing to pay
a toll. Surveys conducted prior to project implementation revealed that 69
percent of those surveyed were aware of and understood the purpose of
the project, and 64 percent believed that allowing single-occupancy
vehicles to use the carpool lanes by paying a toll was a good idea. A leader
can also stress that tolls can help make up for shortfalls in public funds,
allowing needed highway improvements to be completed sooner.
According to some transportation officials, this point is particularly
relevant when the public does not share a state transportation leader’s view
of the state’s needs, or of the challenges associated with addressing those
needs within the current fiscal environment, or both.
Page 48 GAO-06-554 Highway Finance
One effective way to communicate the benefits of tolling is through
organized public education, outreach, and marketing efforts. Through such
efforts, the public can be informed about the transportation situation in the
state and the various options that are available to address transportation
needs. For example, in California, strong political figures, as well as state
and local officials, acted as champions for individual toll projects. Seeking
to maximize the efficiency of the transportation system through congestion
pricing, these leaders and officials promoted two congestion pricing
projects—the Interstate 15 project and the State Route 91 project—using
public education and outreach to inform the public about the objectives of
the projects and to demonstrate how the objectives would be achieved.
Addressing challenges. In identifying toll projects to promote,
responsible leaders will likely be interested in projects that mitigate the
challenges to tolling. Therefore, addressing concerns about double
taxation, inequity, diversion, and coordination in project design can help
transportation officials build support for toll projects and secure
committed advocates for the projects.
When considering a tolling approach, transportation officials can identify
ways to effectively address identified challenges and gain a better
understanding of the potential impact of the approach through data
collection and analysis. Understanding the potential effects of a toll project
on traffic flows, specific groups, business activity, and commercial
transportation can be particularly useful to transportation officials as they
build measures into the project’s design to address identified challenges.
Table 2 includes examples of questions and data needs that transportation
officials might consider as part of their data collection and analysis.
Table 2: Questions That Can Be Considered When Planning and Designing Toll Projects
Question Purpose
How will traffic be diverted and who will suffer? Analyzing how tolls would affect personal, business, and commuting trips could
help decision makers estimate the extent to which traffic would be diverted. From
these estimates, transportation officials can develop strategies to address the
impact of this diversion on affected groups.
To what extent will tolls meet the project’s goals? Determining the extent to which tolls will meet the project’s financial and other
goals could help project sponsors make decisions about setting the proper toll. If
tolls are too low, they will not generate enough revenue to pay for the project or, in
the case of congestion pricing, they will not divert sufficient traffic to relieve
congestion.
Page 49 GAO-06-554 Highway Finance
Source: GAO analysis of relevant literature.
a
Transportation Research Board, Curbing Gridlock: Peak-Period Fees to Relieve Traffic Congestion
(Washington, D.C.: January 1994).
To address general objections to tolling, transportation officials can also
consider potential arguments that might be raised on the grounds of double
taxation and inequity and think about ways to address these arguments.
Addressing these types of concerns is complex because the fairness of
shifting to tolling depends on the fairness of the existing system of finance
and on how it would be changed by a shift. It can be argued, particularly in
states where sales and property taxes are important sources of financing
for the transportation system, that the existing system is not very equitable.
In contrast, a tolling approach raises revenues directly from those users
willing to pay for the service. Furthermore, the economics literature
suggests that concerns about inequity can be mitigated to some degree if
revenues are distributed in a way that addresses those concerns.
Transportation officials can address concerns about double taxation and
inequity during project design as a way to counter potential opposition on
these grounds. Setting goals for a project that reflect its intended purpose
and addressing any key challenge that could affect the achievement of the
goals can help transportation officials directly respond to the concerns. For
example, if the project goal is to use a tolling approach to relieve
congestion, transportation officials could set the toll to reflect the external
Who loses and how do we compensate them? Analyzing the effects that a toll project might have on specific groups enables
transportation officials to address many questions about the equity consequences
of the project. The data that could be collected include important household and
lifestyle characteristics, including (but not limited to) income, residential location,
commuting patterns, number of vehicles, number of workers, family size, annual
travel, and employment type and location. Without these data, it would be difficult
to estimate the consequences for the groups that could be most affected. Analysis
would provide better estimates of the extent to which a tolling approach would shift
drivers to carpools and transit and would provide more insight into how transit
operators might be able to expand service and how transit service might benefit
lower-income users.
How will the project affect business activity and
commercial transportation?
Given the importance of transportation to the economy of metropolitan areas and
the widespread perception that congestion increases business costs,
transportation officials could consider examining the impact of tolling on business
activity and commercial transportation when considering the use of a tolling
approach. However, this can be difficult for transportation officials because little is
known about the magnitude of congestion costs.
a
Factors affecting this include the
logistics patterns of firms; the frequency, origin, and destination of trips; and the
ability of firms to adapt to congestion without affecting costs. Research on how a
tolling approach would affect commercial carriers operating on those facilities
could also provide some insights.
(Continued From Previous Page)
Question Purpose
Page 50 GAO-06-554 Highway Finance
costs associated with peak period use of the road, and the toll revenues
could be dedicated to maintaining, operating, and adding capacity to the
facility. This approach might convince users that the toll is not just another
tax that would be used for other purposes. In contrast, if the project goal is
to address inequities, revenues could be distributed quite differently.
Revenues could be distributed to disadvantaged groups in the form of tax
rebates or improvements in roads and transit in certain areas. If businesses
in specific areas are adversely affected by a project, toll revenues might be
used to improve transportation services in those regions. For the Interstate
394 HOT lanes project, state decision makers established the project goals
of improving efficiency and maintaining free-flow speeds for transit and
carpools using the converted HOV lanes. These goals led to decisions on
how the toll revenues would be distributed. The law requires that half of
the excess revenues generated from HOT lane facilities be used to improve
and maintain transit service.
Addressing the coordination issues involved in designing regional and
multistate projects is perhaps more daunting. No ideal institutional
mechanism appears to be available for managing a regional program;
nevertheless, some states have created new institutions to address
interstate coordination issues. For example, Oregon and Washington
formed a bistate task force to coordinate planning for improvements that
cross state borders. The task force includes officials from both state
governments, representatives from the affected metropolitan planning
organizations (MPO), members of the business community, and residents
of each state. The task force is charged with considering all modes of
transportation that could potentially ease congestion and improve capacity
on Columbia River crossings. The two states are jointly conducting
environmental impact studies on highway expansion and transit
improvements. The Oregon and Washington DOTs, the Portland and
Vancouver MPOs, and the transit authorities from both states are jointly
leading this study on the impact of capacity enhancement. Involving
officials from both states in evaluating the project can help ensure that
projects are equitable and effective in addressing the needs of both states.
Select a Tolling Approach
That Provides Tangible
Benefits to Users
When proposing a tolling approach, transportation officials should
consider promoting one that will produce tangible benefits to users while
justifying both the costs of the project and the fees that users will be
required to pay for the service. (See fig. 14.) The prospect of such benefits
increases the likelihood of the project’s acceptance and can help allay
general objections to tolling.
Page 51 GAO-06-554 Highway Finance
Figure 14: Strategies to Address Challenges to Tolling
Although tolling can take different forms and decisions about its use are
state specific, transportation experts have noted that projects that use
congestion pricing offer predictability and choice to the user and may be
less likely to arouse fierce opposition than projects that offer no new
benefits or choice.
39
For example, HOT lane projects, which include both
priced and free lanes, offer the benefit of faster trip times for a price in
HOT lanes and the choice of a “free,” but probably slower, trip in general
purpose lanes. Pricing the entire facility might result in more efficient
rationing of limited space on congested roads,
40
but congestion tolls on
entire facilities or networks tend to meet with resistance despite their
economic efficiency. HOT lanes, on the other hand, may be less likely to
encounter resistance because they offer premium service for those willing
to pay the fee. While actual experience with road pricing in the United
States is still fairly limited, proponents of HOT lanes cite several benefits as
follows:
41
39
GAO-03-735T; Transportation Research Board, “Special Report 285: The Fuel Tax and
Alternatives for Transportation Funding” (Washington, D.C.: 2005); Reason Foundation,
Building a Case for HOT Lanes: A New Approach to Reducing Urban Highway
Congestion (Los Angeles, CA: April 1999); and FHWA, A Guide for HOT Lane Development
(Washington, D.C.: March 2003).
40
Economists say that in deciding to drive on a congested highway, each road user is
inherently imposing external costs on other road users by causing delay. A congestion toll
requires motorists to take account of those costs.
41
Federal Highway Administration, A Guide for HOT Lane Development (Washington, D.C.:
March 2003); Transportation Research Board, Road Value Pricing: Traveler Response to
Transportation System Changes (Washington, D.C.: October 2003); Reason Foundation,
HOT Networks: A New Plan for Congestion Relief and Better Transit (Los Angeles, CA:
February 2003) and Building a Case for HOT Lanes: A New Approach to Reducing Urban
Highway Congestion (Los Angeles, CA: April 1999); and Senate Committee on Environment
and Public Works, Testimony on Peak-Hour Traffic Congestion, March 19, 2002.
Source: GAO analysis of information provided by state transportation officials.
Develop an institutional framework that facilitates tolling
Provide leadership to build support for projects that have addressed tolling challenges
Select a tolling approach that provides tangible benefits to users
Page 52 GAO-06-554 Highway Finance
• First, according to reports and studies issued by FHWA, the
Transportation Research Board, the Reason Foundation, and the
Brookings Institution, they provide a premium service for a fee to those
travelers who have a special need and are willing to pay the fee.
Through variable pricing, traffic flows freely even during the height of
rush hours. The use of price and occupancy restrictions to manage the
number of vehicles traveling on them enables HOT lanes to maintain
volumes consistent with uncongested levels of service.
• Second, studies and reports issued by FHWA and the Reason
Foundation note that HOT lanes reduce traffic congestion in the
general-purpose lanes by diverting some solo drivers to the HOT lanes,
thereby benefiting those drivers who use conventional lanes.
42
• Third, according to FHWA and others, HOT lanes can make better use of
underutilized carpool (HOV) lanes, thereby alleviating political pressure
to decommission them. HOT lanes may provide an opportunity to
improve the efficiency of existing or newly built HOV lanes by filling
excess capacity that would not otherwise be used. At the same time,
HOT lanes continue to serve as HOV lanes for carpools and buses.
• Finally, reports and studies issued by FHWA and the Reason Foundation
note that HOT lanes generate revenue for transportation improvements.
Tolls can generate revenue for highway and transit improvements, such
as Bus Rapid Transit.
43
HOT lanes have been implemented on Interstate 15 in San Diego, State
Route 91 in Southern California, the Katy Freeway and U.S. Route 290 in
Houston, and Interstate 394 in Minneapolis. These cases illustrate how
transportation officials have advanced projects seeking to achieve the
42
If diversion of traffic to HOT lanes reduces peak-period congestion in the general purpose
lanes, the lower congestion may attract additional peak-period drivers in those lanes. These
drivers might be people who previously used alternative routes, traveled at other times of
day, or used mass transit to avoid the congestion, but who would prefer to use the general
purpose lanes at peak periods if congestion in those lanes at those hours were reduced. The
result may be as much congestion as before the HOT lanes were open because only when
congestion returns to that level will other potential users of the general purpose lanes at
peak periods no longer have this new incentive to switch to those lanes. For additional
information, see Anthony Downs, Brookings Institution Policy Brief #128: Traffic: Why
It’s Getting Worse, What Government Can Do (Washington, D.C.: January 2004).
43
Bus Rapid Transit refers to frequent bus service operating in special lanes.
Page 53 GAO-06-554 Highway Finance
potential benefits that may result from the approach. For example, to
guarantee free-flowing traffic, toll prices on the Interstate 15 HOT lanes
project are set dynamically, changing every 6 minutes to keep traffic
flowing freely in the HOT lanes. In providing motorists with choice and
providing premium services, the State Route 91 Express Lanes provide a
level of emergency and safety surveillance that, according to surveys
conducted by the private firm operating the toll facility, some drivers
choose to pay to use the toll lanes even when there is no congestion on the
adjacent free lanes. To optimize the use of existing infrastructure, more
productivity was sought on the Katy Freeway. HOVs are defined as cars
with three or more people during certain peak hours. The Katy Freeway
QuickRide program allows cars with two persons to use the HOV lanes if
they pay a toll. Daily use by paying users has been between 150 and 200
vehicles for peak periods, and peak hour travelers using the facility save an
average of 18 minutes compared with travelers on the nonpriced lanes.
44
Finally, linking the conversion of the HOV lanes to transit to increase
mobility and equity was taken into account on the Interstate 394 and
Interstate 15 projects. Toll revenues generated on the Interstate 394 HOT
lanes are designated for facility and transit improvement and a large
portion of surplus revenues on Interstate 15 are used for new bus service.
Concluding
Observations
As congestion threatens the nation’s mobility at a time when motor fuel
taxes—the principal source of funding for highway improvements—have
not kept up with rising costs, federal and state policy has generally been
not to increase motor fuel taxes, and state and local decision makers are
increasingly looking to a range of alternative mechanisms, including tolling,
to advance their surface transportation programs. Over half the states have
either adopted tolling or are seriously considering tolling—and this number
may increase. A tolling approach can, under the right circumstances, be an
attractive choice to state or local governments because of the range of
potential benefits—generating new revenues, managing congestion,
financing new capacity—that it may provide. But these potential benefits
come only by honestly and forthrightly addressing the challenges that a
tolling approach presents. State and local governments may be able to
address these challenges by pursuing strategies that focus on developing an
institutional framework that facilitates tolling, by demonstrating
leadership, and by pursuing toll projects that provide tangible benefits to
44
North Central Texas Council of Governments, Regional Value Pricing Corridor
Evaluation and Feasibility Study (Arlington, TX: June 2005).
Page 54 GAO-06-554 Highway Finance
users. While perhaps not applicable to every state to the same degree or in
the same way, these strategies form a basis for overcoming potential
impediments to tolling and developing a meaningful and effective tolling
approach that best suits the environment in each state.
In the twenty-first century, demographic trends will drive mandatory
federal spending commitments and potentially overwhelm the ability of the
federal government to deliver and grow its discretionary programs. This
looming crisis requires a fundamental reexamination of existing
government programs and commitments, and state and local governments
will be challenged to consider new ways of delivering their programs.
Regardless of the demand for highway improvements, sustained, long-term,
large-scale increases in federal highway grants and state and local spending
seem unlikely. In this context, a tolling approach is more than just finding
new sources of money. Should states choose to undertake it, a tolling
approach has the potential to promote efficiency in the use of
infrastructure, allocate costs to users and capture revenue from
beneficiaries, stimulate private financing and investment, and provide cost-
effective solutions to mobility challenges if viewed as fair and equitable by
the public.
Agency Comments and
Our Evaluation
We provided a draft of this report to the Department of Transportation for
review and comment. Officials from the Department indicated that they
generally agreed with the report and provided technical clarifications,
which we incorporated as appropriate.
As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from the
report date. At that time, we will send copies of this report to congressional
committees with responsibilities for transportation issues; the Secretary of
Transportation; and the Administrator, Federal Highway Administration.
We will also make copies available to others upon request. In addition, this
report will be available at no charge on the GAO Web site at
http://www.gao.gov.
Page 55 GAO-06-554 Highway Finance
If you or your staff have any questions about this report, please contact me
at
h[email protected] or (202)512-2834. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. GAO staff who made key contributions to this report are
listed in appendix IV.
JayEtta Z. Hecker
Director, Physical Infrastructure Issues
Page 56 GAO-06-554 Highway Finance
Appendix I
AppendixesObjectives, Scope, and Methodology Appendix I
The objectives of this report were to examine (1) the promise of tolling to
enhance mobility and finance highway transportation, (2) the extent to
which tolling is being used in the United States and the reasons states are
using or not using this approach, (3) the challenges states face in
implementing tolling, and (4) strategies that can be used to help states
address the challenges to tolling. We noted where federal programs have
played a role in state tolling decisions and projects, but we did not evaluate
the effectiveness of those programs.
To examine the promise of tolling to enhance mobility and finance highway
transportation, we reviewed reports and studies issued by federal agencies
and academia, as well as articles from relevant trade journals; relied on
perspectives gained from our past work on transportation finance; and
analyzed relevant studies and reports issued by transportation experts. To
identify the issues related to the transportation system in terms of funding
and mobility, we analyzed data on population patterns and growth from
U.S. Census reports and vehicle miles traveled and motor fuel tax trends
from the Federal Highway Administration’s (FHWA) Highway Statistics
reports for 1982 to 2004. We also analyzed data from the 2005 Urban
Mobility Report
1
to determine congestion levels and congestion costs for
selected cities in the United States. To supplement the information
obtained through our literature review, we interviewed officials of the
American Automobile Association; International Bridge, Tunnel and
Turnpike Association; the American Association of State Highway and
Transportation Officials; and the Environmental Defense Fund.
To determine the extent to which tolling is being used in the United States,
we designed and administered an Internet survey of state department of
transportation (DOT) officials and performed a correlation analysis to
examine the extent to which state financial and demographic
characteristics are associated with their status on using tolling. (For more
information about the correlation analysis, refer to app. II.) Our review
focused on toll roads and therefore, did not include toll bridges and
tunnels.
Survey. The questionnaire asked about each state’s current and planned
toll road facilities. We sent the questionnaire to the directors of state DOTs
in 49 states and Washington, D.C. We did not send a questionnaire to the
1
Texas Transportation Institute, 2005 Urban Mobility Report (College Station, TX: May
2005).
Appendix I
Objectives, Scope, and Methodology
Page 57 GAO-06-554 Highway Finance
Louisiana DOT because we administered our survey only a few weeks after
Hurricane Katrina struck New Orleans and the Gulf Coast.
To minimize nonsampling error, such as measurement errors that can be
introduced when respondents do not understand questions or when they
do not have information to answer a particular question, we undertook
several quality assurance steps. Our social science survey specialists
designed draft questionnaires and conducted pretests with state DOT
officials in four states. During these pretests, we assessed the extent to
which respondents interpreted questions and response categories
consistently, the time respondents needed to complete the survey, and the
extent to which respondents had the information needed to answer the
survey questions. Using the results of these pretests, we revised the
questionnaire.
We administered the survey to the directors of state DOTs via the Internet
during September and October 2005, e-mailing the directors a Web link to
our questionnaire and requesting that they or their designees complete it.
We received responses from 49 states and Washington, D.C.—a 100 percent
response rate. We analyzed the data using statistical software.
We compared the responses to key survey questions with information
obtained from our interviews with state DOT officials and from state
applications to the FHWA’s tolling pilot program. In four instances, data
from these sources were inconsistent. We contacted DOT officials in these
states to resolve these inconsistencies and adjusted the survey results
accordingly.
Semistructured interviews. To determine the reasons states use or do
not use tolling, the challenges to tolling, and the strategies that have been
used to address the challenges, we conducted semistructured interviews
with state transportation officials from all states except Louisiana, and
interviewed stakeholders in six states that we visited to determine the
reasons states use or do not use the approach, the challenges to using the
approach, and the strategies that have been used to address the challenges.
We did not gather information directly from the public.
We developed a set of questions to ask in semistructured interviews of state
transportation officials to gain more detailed information on states’ reasons
for tolling or not tolling and the challenges states face in tolling. Having
visited 6 states and interviewing transportation officials there, and
excluding Louisiana, we conducted semistructured interviews from the
Appendix I
Objectives, Scope, and Methodology
Page 58 GAO-06-554 Highway Finance
remaining states. We did not interview transportation officials in Louisiana
because our semistructured interviews were conducted shortly after
Hurricane Katrina struck New Orleans and the Gulf Coast. To determine
the appropriate state official to interview in each state, we relied on
information from FHWA Division Administrators for the respective states.
After gathering the information from FHWA, we contacted and interviewed
the state officials and conducted our interviews. We analyzed the data from
the semistructured to identify major themes.
Site visits. To supplement information from our survey and
semistructured interviews, we visited six states that were in various stages
of planning or constructing diverse types of toll projects. We selected the
states for their diversity in terms of geography, transportation needs, and
tolling plans. The states were Minnesota, Mississippi, Missouri, Oregon,
Texas, and Virginia. We visited those six states to obtain more detailed
information on the challenges states are encountering and the strategies
states employ or are considering employing to toll. We judgmentally
selected four states where tolling was either planned or under way and two
states where tolling had been proposed and rejected by a vote of either the
citizens or the legislature. During our site visits, we interviewed state, local,
and FHWA officials.
To identify strategies that can be used to address the challenges to tolling,
we analyzed the results of our review on tolling efforts and built on the
perspectives gained from our past work on federal investment strategies.
We also analyzed reports and studies issued by transportation experts and
academia on finance reform to identify broad strategies that can be used to
help transportation officials adopt and implement a tolling approach.
We performed our work from June 2005 through June 2006 in accordance
with generally accepted government auditing standards.
Page 59 GAO-06-554 Highway Finance
Appendix II
Correlation Analysis Appendix II
To identify state characteristics that are linked with states’ decisions to toll
roads, we performed a correlation analysis that examined the relationship
between those decisions and various state demographic and financial
characteristics. These characteristics included, but were not limited to,
population; per-capita income; gross state product; vehicle miles traveled;
capital expenditures on highways; and local, state, and federal highway
trust fund appropriations. To perform this analysis, we updated the data
that we had collected from the Federal Highway Administration (FHWA)
and Bureau of Economic Analysis (BEA) for our previous reports,
1
and
converted them to inflation-adjusted 2004 dollars using BEA’s chain-type
price index for gross domestic product (GDP), as well as its state highway
and streets chain-type price index. For those characteristics that
represented measures of change, we used the changes in these factors from
1990 to 2000 to be consistent with the years when the U.S. Census of
Population and Housing was conducted and, for those characteristics that
represented measures of levels, we used data from 2002. We chose 2002
because data for some characteristics were not available for more recent
years. We divided states into two groups, tolling and nontolling, based on
information gathered from our state survey and FHWA documentation. We
considered the associations between tolling and nontolling with each
demographic or financial characteristic singly and did not control for the
effects of other characteristics on these tolling decisions (as we would do
in a multivariate analysis). For this reason, the results of our correlation
analysis indicate a simple statistical relationship between tolling status and
a study characteristic and do not imply causality. Interactions may be more
complex when multiple characteristics are simultaneously associated with
tolling status. In addition, our results may be sensitive to how we defined
tolling status.
Although certain characteristics in a state’s finances and tax policies might
be related to financial need, our correlation analysis found only limited
relationships between various state demographic and financial measures
and whether states are and are not planning toll roads. (See table 3.) For
example, we found the following:
• There is wide variation in state motor fuel tax rates among the states,
ranging, as discussed earlier, from 7.5 cents to 28.1 cents per gallon in
1
GAO, Trends in Federal and State Highway Investment, GAO-03-744R (Washington, D.C.:
June 18, 2003) and GAO, Federal-Aid Highways: Trends, Effect on State Spending, and
Options for Future Program Design, GAO-04-802 (Washington, D.C.: Aug. 31, 2004).
Appendix II
Correlation Analysis
Page 60 GAO-06-554 Highway Finance
2002, and we investigated whether state motor fuel tax rates are
correlated with decisions to toll. While a slight inverse relationship
exists between a state’s decision to toll and the level of its motor fuel
taxes, the slightness of this relationship suggests that states planning
toll roads are not much more likely to be the ones with lower motor fuel
tax rates than other states.
• While state incomes vary greatly, a state with higher motor fuel tax rates
is also more likely to have higher fuel tax revenues as a percentage of its
gross state product than states with lower motor fuel tax rates. As with
fuel tax rates, a slight inverse relationship exists between a state’s
decision to toll and the level of its fuel tax revenues as a percentage of
its gross state product. However, the slightness of this relationship
suggests that states planning toll roads are not much more likely to be
the ones with lower fuel tax revenues as a percentage of their gross
state product than other states.
• The extent to which motor fuel taxes are disbursed to nontransportation
uses could contribute to what state officials characterized as general
shortfalls in highway funding. The relationship between states planning
toll roads and the use of motor-fuel tax revenue is only slight, suggesting
that states planning toll roads are not much more likely to have more of
their fuel tax revenues used for nontransportation programs than other
states.
Although there appears to be little relationship between state finance and
tax policy characteristics and tolling, our analysis indicates that there are
some other factors that are related to states' decisions on tolling. For
example, both the size of the state, whether measured by population or by
vehicle miles traveled (VMT), and whether it is growing rapidly, again
measured by population or VMT growth, are directly related to states’
decisions to toll. These relationships are consistent with statements made
by state transportation officials on the use of tolling to fund highways due
to increasing demand for highway travel. In addition, our analysis revealed
a relationship between federal funding and a state’s decision to toll. Each
state collects federal motor fuel taxes that are deposited into the Highway
Trust Fund and receives grants through the federal-aid highway program
according to formulas specified in law. The states that are planning toll
roads are moderately associated with the federal-aid “donor states”—those
states that contribute more to the Highway Trust Fund than they receive in
federal highway grants. Thus, donor states are statistically more likely to be
Appendix II
Correlation Analysis
Page 61 GAO-06-554 Highway Finance
planning toll roads than donee states—those states that receive more in
grants than they collect.
Table 3: Results of Correlation Analysis
Source: GAO.
Note: Data from 2002 were used in the correlation analysis, except for the percentage change in
population and the percentage change in vehicle miles traveled, both of which measure values in 2000
against values in 1990. Motor fuel tax rates were expressed in 2004 dollars. It is worth noting that the
correlation coefficient indicates a statistical association between the study variable and
tolling/nontolling status of a state without controlling for the effects of other characteristics on these
tolling decisions as in a multivariate analysis.
a
1=yes, 0=no.
b
We did not include data for the District of Columbia.
Factors
Decision to toll
a
correlation coefficient
(number of observations)
Motor fuel tax rate (in cents per gallon) -0.052
(51)
Fuel tax revenue as percent of gross state
product
-0.005
(51)
Percent of fuel tax revenues used for
nonhighway purposes
-0.095
(50)
b
Population 0.309
(51)
Percentage change in population 0.140
(51)
Vehicle miles traveled (in millions) 0.368
(51)
Percentage change in vehicle miles traveled 0.295
(51)
Highway Trust Fund apportionment/payment
ratio
-0.319
(51)
Page 62 GAO-06-554 Highway Finance
Appendix III
Survey Questions Appendix III
Current Toll Road Facilities
Question 1:
Are there any toll road facilities in your state? Please do not count any
tolled bridges or tunnels as toll roads.
1. Yes
2. No (Skip to question 10.)
Question 2:
Are any of these facilities new roads that were built on new alignments?
1. Yes
2. No
Question 3:
Were any of these facilities previously untolled?
1. Yes
2. No
Question 4:
Are any of these facilities new lanes added to roadways that were
previously untolled?
1. Yes
2. No
Question 5:
Are any of these facilities HOT lanes (in which single occupancy vehicles
can gain access to HOV lanes by paying a toll)?
1. Yes
2. No
Question 6:
Do any of these facilities charge tolls that vary by time of day?
1. Yes
2. No
Question 7:
In what year did the first toll road facility in your state open to traffic?
(Please do not consider facilities that opened before 1938.)
Question 8:
In what year did the most recent toll road facility in your state open to
traffic? (Please do not consider facilities that opened before 1938.)
Appendix III
Survey Questions
Page 63 GAO-06-554 Highway Finance
Question 9:
Which of the following agencies participate in managing the toll
road facilities in your state?
1. State Department of Transportation
2. Public toll authority
3. Other state agency
4. Local or regional government agency
5. Private entity
Planned Toll Road Facilities
Question 10:
Are there plans in your state to build any toll road facilities for which an
Environmental Review and a Record of Decision have been completed?
1. Yes
2. No (Skip to question 19.)
Question 11:
Are any of these facilities in the design or right-of-way stage?
1. Yes
2. No
Question 12:
Are any of these facilities in the construction phase?
1. Yes
2. No
Question 13:
Are there plans for any of these facilities to be new roads built on new
alignments?
1. Yes
2. No
Question 14:
Are there plans to toll a roadway that is currently untolled?
1. Yes
2. No
Question 15:
Are there plans for any of these facilities to be new lanes added to
roadways that are currently untolled?
Appendix III
Survey Questions
Page 64 GAO-06-554 Highway Finance
1. Yes
2. No
Question 16:
Are there plans for any of these facilities to be HOT lanes (in which single
occupancy vehicles can gain access to HOV lanes by paying a toll)?
1. Yes
2. No
Question 17:
Are there plans for any of these facilities to charge tolls that vary by time of
day?
1. Yes
2. No
Question 18:
Which of the following agencies would participate in managing these
planned toll road facilities?
1. State Department of Transportation
2. Public toll authority
3. Other state agency
4. Local or regional government agency
5. Private entity
Final Questions
Question 19:
Are there plans in your state to build any toll road facilities for which an
Environmental Review or a Record of Decision have NOT been completed?
1. Yes
2. No
Page 65 GAO-06-554 Highway Finance
Appendix IV
GAO Contact and Staff Acknowledgments Appendix IV
GAO Contact
JayEtta Z. Hecker (202)512-2834
Staff
Acknowledgments
In addition to the individual named above, Steve Cohen, Assistant Director;
Mark Braza; Jay Cherlow; Bess Eisenstadt; Simon Galed; Moses Garcia;
Bert Japikse; Terence Lam; Liz McNally; and Don Watson made key
contributions to this report.
(544101)
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