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Toll lanes are progressive, pro-growth and pro-environment. It's the tax system that's the problem.
What’s the latest threat to opportunity in America? Toll lanes. Or so Dan Sarewitz argues in a recent piece at The Breakthrough about new high occupancy/toll (HOT) lanes on the Washington DC Beltway. He claims, “market rationality imposed on roadways that all people depend on for their livelihoods and social lives means that poor people will be increasingly required to travel more slowly than those with more money.”
But this is not really an argument; it’s a statement of fact. The needed road capacity paid for by tolls will in fact mean some higher-income travelers’ commutes improve more than lower-income travelers’. But all drivers will see improvements, and those with low incomes get the improvements for free. But for Sarewitz, that can’t be good since the moneyed class gets even more improvement (which they pay for).Sarewitz appears to be reflecting the philosophy of John Rawls. Rawls argued for what he called the “difference principle,” which holds that social and economic inequalities are to be arranged so that they are to be of the greatest benefit to the least-advantaged members of society. So even solutions like the Beltway toll lanes, which are progressive, pro-growth and pro-environment, violate this radical Rawlisan philosophy.
Before seeing why, some background is in order. According to the Texas Transportation Institute, the DC region suffers from among the worst traffic congestion in the nation. The Beltway is particularly hellish, with stop and go traffic common and congestion leading to excess fuel consumption of 1.3 million gallons of gasoline annually (which the toll lanes will reduce), and a total cost of over $60 million a year. This is not surprising since the Beltway has not been widened since it was built over a half century ago, despite the region’s population tripling.
It’s not as if transportation planners haven’t long argued for Beltway widening. But finding the $2 billion dollars needed was the problem. A decade ago politicians got a referendum on the ballot to allow northern Virginians to impose a half-cent sales tax to pay for, among other things, widening the Beltway. But 55 percent voted against it. Given the fact that the Commonwealth has barely enough money to maintain existing roads, Beltway expansion was never going to happen without tolls. By charging tolls on the newly added lanes (the existing lanes remain free), the private developer was able to generate a revenue stream that allowed it to issue bonds to pay for construction.
The result will be improved mobility for everyone. By adding new capacity, some vehicles that used to travel on the free lanes will switch to the tolled lanes, decreasing vehicles and congestion on the free lanes. As a result, both the drivers paying and the ones using the free lanes will be better off. Moreover, to the extent higher income people use the priced lanes more, it means that higher income people are paying more.
This is in fact what studies have shown. One UCLA study found that adding new lanes is more progressive than paying for added capacity with sales taxes. The authors write, “Using sales taxes to fund roadways creates substantial savings to drivers by shifting some of the costs of driving from drivers to consumers at large, and in the process disproportionately favors the more affluent at the expense of the impoverished.” In contrast, the researchers found that because higher-income travelers tend to use priced lanes more (although not exclusively: lower-income travelers use them occasionally when they simply cannot be late for something, like picking up their child from day care), they pay much more of the cost of adding new capacity.
Likewise, the environmental organization Resources for the Future, a supporter of pricing since it benefits the environment, found that converting current HOV lanes in the DC region to tolled HOT lanes achieved 77 percent of the total net benefits to society possible from tolling all lanes on all freeways. Additionally, all income groups benefited from the HOT lanes, in part because some users who value time more were more willing to pay to travel on HOT lanes, freeing up space on unpriced lanes.
Few opponents of toll roads, Sarawitz included, suggest a viable alternative to being stuck in traffic. Low-income households would have been worse off if voters had increased the sales tax to pay for Beltway expansion. They would have been worse off if gas taxes were increased, since as Sarewitz points out, they pay more of per mile driven since they drive older, less fuel efficient cars.
Moreover, given that the cost of widening urban freeways costs at least ten times more than average gas tax revenues produce per lane mile, a gas tax solution would have meant much higher gas taxes. And they would have been worse off if the toll lanes are not built at all since their congestion would not have improved. Perhaps the only way they would have been even better off is if the state had levied a tax on the wealthy and dedicated the money to roads. But they’d be better off if the state did this and spent the money on anything: education, public safety, social services, etc.
So what Sarewitz appears to be arguing against is our current tax system, which he presumably, and rightly, believes is not progressive enough. Fair enough. But let’s have that discussion rather than demonize innovative, environmentally and socially progressive innovations like toll lanes built through public-private partnerships. If we want to build the support for policies that are truly pro-growth, rather than one that simply redistribute limited growth, we need to reject failed Rawlsian thinking.
Rob Atkinson is president of the Information Technology and Innovation Foundation and former chairman of the National Surface Transportation Infrastructure Finance Commission. Read his Breakthrough Journal article, “The Trouble with Progressive Economics,” in Issue 1.
Photo credit: Flickr user epSos.de