By Benita M. Dodd
Are toll roads HOT, and when is HOT not cool?
That’s not a trick question or a riddle. It’s a serious policy consideration, and whether the lack of distinction between toll roads and High-Occupancy Toll (HOT) lanes is deliberate or unintended, the consequences could be dire. Confusion about whether, when, where and how the state should allow toll roads or HOT lanes threatens to undermine this state’s ability to utilize an increasingly popular and vital transportation tool.
Why is the ability to charge tolls vital? The Georgia Department of Transportation’s statewide transportation plan through 2025 anticipates $36 billion in federal and state revenues, but it estimates “needed” transportation projects will cost the state $51 billion. Georgia has been a “donor” state when it comes to transportation dollars. The state gets back only about 86 cents of every Highway Account dollar it sends to Washington, and 67 cents of every Mass Transit Account dollar sent to Washington. The state is urging more equity in the next six-year federal transportation bill, over which Congress continues to bicker.
Even if equity comes, the federal government already has warned that transportation funding is likely to shrink and take a back seat to other budgetary priorities. Consideration of a gas tax hike in Georgia has repeatedly met a cold shoulder. States and local governments need to become creative and innovative when it comes to funding transportation improvements, or watch delays crumble bridges, sideline buses and lead to holes in sidewalks and roads. Not to mention a growing population converging on already-congested and inefficient roadways.
Enter the increasingly popular option of tolling to expedite improvements. Legislation enabling public-private partnerships allows Georgia to consider unsolicited proposals from private companies for infrastructure improvement. In the case of transportation proposals, a company could recoup its investment through charging users a fee or toll.
The first project proposed under Georgia’s 2003 law is a plan to improve Georgia 316 by converting the 39-mile section between Interstate 85 and the Athens Loop into a limited-access toll road. The state DOT estimates improvements will cost $800 million; commuters wanting traditional funding would have to wait at least 15 years – and up to 25 years – for the improvements. The private Parkway Group consortium promises to complete the project within five years, and the DOT – taxpayers – “would not be responsible for revenue shortfalls.”
An editorial in The Red and Black, the University of Georgia’s student newspaper, calls the speculated $10 roundtrip toll “an exorbitant amount” and warned the fee could cause “even larger traffic backups and increased accidents on smaller roads as students seek alternate routes from Athens.”
Clearly, to recoup its investment, the consortium must encourage traffic on the road. To do that requires a toll acceptable to commuters; as DOT Commissioner Harold Linnenkohl commented recently, one solution may be reducing the toll and extending the period to recoup the investment. Still, those who have been around long enough recall the vociferous opposition to construction of Georgia 400, especially as a toll road; today, the third public-private proposal to the DOT would ease congestion on that heavily traveled toll road.
Unfortunately, misunderstanding is blurring the lines between the Georgia 316 toll road proposal and a second innovative option for the state: HOT lanes. On Georgia 316, all vehicles would pay the toll in all lanes; those who don’t wish to pay the toll would have to choose an alternate route. HOT lanes, on the other hand, accommodate vehicles that under normal circumstances would not qualify to ride in a high-occupancy vehicle (HOV) lane – for a fee, of course. Commuters can choose to travel in the “free” regular lanes or pay to use the HOT lane for a fee that changes depending either on the time of day or the level of congestion (dynamic pricing).
While neither toll roads nor HOT lanes need be a public-private partnership, given the lack of government (taxpayer) funding, it makes sense for government to leverage private money to expedite construction and the easing of congestion.
The State Road and Tollway Authority is studying the concept of a HOT lane network for the metro area; the state DOT already has received an unsolicited bid (the second public-private proposal) for an express toll lane on metro Atlanta’s Northern Corridor, I-75/575, where cars would pay variable fees and buses would travel free.
Both concepts have been largely successful across the country. Studies have raised concerns about the need for taxpayer funds to “bail out” the private sector. The good news is that the private sector wants profitable ventures – to recoup its investment – and objective criteria can help select successful projects. The better news is that even if the private sector overestimates revenues and fails, nobody rolls up the project and takes away the pavement. The state gains a valuable asset, and taxpayers and commuters have their improvements a lot sooner – and likely a lot cheaper – than expected.
Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
© Georgia Public Policy Foundation (January 14, 2005). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.
By Benita M. Dodd
Are toll roads HOT, and when is HOT not cool?
That’s not a trick question or a riddle. It’s a serious policy consideration, and whether the lack of distinction between toll roads and High-Occupancy Toll (HOT) lanes is deliberate or unintended, the consequences could be dire. Confusion about whether, when, where and how the state should allow toll roads or HOT lanes threatens to undermine this state’s ability to utilize an increasingly popular and vital transportation tool.
Why is the ability to charge tolls vital? The Georgia Department of Transportation’s statewide transportation plan through 2025 anticipates $36 billion in federal and state revenues, but it estimates “needed” transportation projects will cost the state $51 billion. Georgia has been a “donor” state when it comes to transportation dollars. The state gets back only about 86 cents of every Highway Account dollar it sends to Washington, and 67 cents of every Mass Transit Account dollar sent to Washington. The state is urging more equity in the next six-year federal transportation bill, over which Congress continues to bicker.
Even if equity comes, the federal government already has warned that transportation funding is likely to shrink and take a back seat to other budgetary priorities. Consideration of a gas tax hike in Georgia has repeatedly met a cold shoulder. States and local governments need to become creative and innovative when it comes to funding transportation improvements, or watch delays crumble bridges, sideline buses and lead to holes in sidewalks and roads. Not to mention a growing population converging on already-congested and inefficient roadways.
Enter the increasingly popular option of tolling to expedite improvements. Legislation enabling public-private partnerships allows Georgia to consider unsolicited proposals from private companies for infrastructure improvement. In the case of transportation proposals, a company could recoup its investment through charging users a fee or toll.
The first project proposed under Georgia’s 2003 law is a plan to improve Georgia 316 by converting the 39-mile section between Interstate 85 and the Athens Loop into a limited-access toll road. The state DOT estimates improvements will cost $800 million; commuters wanting traditional funding would have to wait at least 15 years – and up to 25 years – for the improvements. The private Parkway Group consortium promises to complete the project within five years, and the DOT – taxpayers – “would not be responsible for revenue shortfalls.”
An editorial in The Red and Black, the University of Georgia’s student newspaper, calls the speculated $10 roundtrip toll “an exorbitant amount” and warned the fee could cause “even larger traffic backups and increased accidents on smaller roads as students seek alternate routes from Athens.”
Clearly, to recoup its investment, the consortium must encourage traffic on the road. To do that requires a toll acceptable to commuters; as DOT Commissioner Harold Linnenkohl commented recently, one solution may be reducing the toll and extending the period to recoup the investment. Still, those who have been around long enough recall the vociferous opposition to construction of Georgia 400, especially as a toll road; today, the third public-private proposal to the DOT would ease congestion on that heavily traveled toll road.
Unfortunately, misunderstanding is blurring the lines between the Georgia 316 toll road proposal and a second innovative option for the state: HOT lanes. On Georgia 316, all vehicles would pay the toll in all lanes; those who don’t wish to pay the toll would have to choose an alternate route. HOT lanes, on the other hand, accommodate vehicles that under normal circumstances would not qualify to ride in a high-occupancy vehicle (HOV) lane – for a fee, of course. Commuters can choose to travel in the “free” regular lanes or pay to use the HOT lane for a fee that changes depending either on the time of day or the level of congestion (dynamic pricing).
While neither toll roads nor HOT lanes need be a public-private partnership, given the lack of government (taxpayer) funding, it makes sense for government to leverage private money to expedite construction and the easing of congestion.
The State Road and Tollway Authority is studying the concept of a HOT lane network for the metro area; the state DOT already has received an unsolicited bid (the second public-private proposal) for an express toll lane on metro Atlanta’s Northern Corridor, I-75/575, where cars would pay variable fees and buses would travel free.
Both concepts have been largely successful across the country. Studies have raised concerns about the need for taxpayer funds to “bail out” the private sector. The good news is that the private sector wants profitable ventures – to recoup its investment – and objective criteria can help select successful projects. The better news is that even if the private sector overestimates revenues and fails, nobody rolls up the project and takes away the pavement. The state gains a valuable asset, and taxpayers and commuters have their improvements a lot sooner – and likely a lot cheaper – than expected.
Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
© Georgia Public Policy Foundation (January 14, 2005). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.