PolicyBlog has moved!

Thank you for visiting, PolicyBlog has a new address.

Our new location is http://www.commonwealthfoundation.org/policyblog

Please adjust your bookmarks. Archived posts will remain here for now.


Tuesday, June 10, 2008

Tolling I-80 not a matter of "fairness"

A reader asked for a response to comments Sen. Sean Logan has been making about Turnpike lease revenue and the need to toll I-80 for "fairness". (See Logan's Morning Call op-ed)

Here are some key points.

  • There will be some money used to pay off debt from the $12.8 billion lease payment – but less than Sen. Logan suggest. About $10.5 billion will be available to invest (remember the Turnpike doesn’t pay off all their bonds at once). At 8.5% return, this yields about $750 million for the next 10 years.
  • For the Turnpike alone – i.e. if I-80 is not tolled – Act 44 provides only $450 million per year (never increasing). Given the uncertainty of I-80 tolling, and to compare apples to apples, this is the appropriate comparison.
  • If Sen. Logan feels we must toll I-80, then it should also be competitively bid and leased out. That would maximize revenue to the state and ensure the lowest tolls and best service to motorist.
  • The core issue is whether we want higher turnpike tolls for motorists combined with I-80 tolls (Act 44) or lower tolls.

The idea that I-80 should be tolled as “fairness” is nonsense. Suppose I offered you two phone plans – one at $8 a month for you, and one at $10 a month for you and $10 a month for your wife. Would you choose the latter plan because you think your wife should pay more too? That is exactly what this fairness argument entails – higher tolls for Turnpike drivers just so that we can stick it to I-80 drivers as well.

Note that I-80 was built and rebuilt with the gas tax – federal and state. Yet Act 44 proponents want to toll it, without reducing the state gas tax, and with the federal government continuing to give the state the same amount of revenue (which is why I-80 tolling is unlikely to be approved).

Where does the “fairness” argument end? I don’t drive the Turnpike or I-80, but I-81 and I-83 – is it fair that I get a “free ride”? Why not toll I-78, I-95, I-70 and 322 as well? Shouldn’t every highway become a toll road? (Actually, this would be a policy we would favor, but as a replacement for not in addition to gas taxes).

No comments: