Wednesday, January 14, 2009

Gas tax proposal -- one thumb up, one thumb down

Some MetroWest legislators are proposing a 26.5-cent increase in the gas tax -- from 23.5 to 50 cents. It's much more than a token increase. Our transportation system would be much better funded. The burden of funding transportation would fall more squarely on drivers. The burden would be more evenly distributed across the state. And, seven of the 50 cents would be dedicated to transit -- 3 cents to regional transit and 4 cents to the MBTA's to pay off its piece of Big Dig debt. So far so good.

Then, the proposal goes wrong, badly wrong. The sponsors propose to eliminate all tolls. It's like an invitation to congestion (and a huge missed revenue opportunity). Tolls are not just a simple revenue generator. They help set traffic distribution. Remove the impact of tolls on turnpike use and it won't be pretty.

Currently, tolls allocate in one-dimension only: they have an impact on which road a person takes. The tolls on the turnpike cause some drivers to avoid the pike for local roads. The quite reasonable fear that toll hikes will cause an increase in cut-through, toll-avoiding traffic is quite reasonable. It is likewise reasonable to expect that reducing or eliminating tolls would reduce cut-through traffic.

But, there is a downside to reducing or eliminating tolls. You make it more attractive. Restricted resources that are free or priced too low are poorly used. The turnpike is a restricted resource, there is limited capacity. Giving that capacity away mis-allocates the resource. Imagine two drivers, one willing to pay a reasonable toll and one not. Removing the toll creates congestion that the first driver would have been willing to pay to avoid. Of course, imposing a toll, if it is the same price round-the-clock, causes that driver to use other roads, causing congestion there.

Not all toll avoiders are going to use other roads. Some will decide not to take the trip. Others will take mass transit. But still, there is an enormous impact on local roads.

The situation would be much different if we added another dimension to tolls: time. Imagine if the gas-tax gang proposed to reduce or eliminate tolls off-peak. Now our toll avoider has another choice: travel at a different time. Everybody wins. The willing toll payer faces less congestion as toll avoiders are given another option. The toll avoider who has the flexibility to travel off peak gets the benefit of the turnpike (compared to stop-and-go local roads). Local road users see a reduction in traffic from the toll avoiders that time-shift their travel. The tolls continue to operate as an incentive to use transit. And, the state maintains the revenue stream during peak travel.

There are going to be an awful lot of MetroWest commuters who are not going to be pleased once they live through the congestion that is the entirely foreseeable -- even if unintended -- consequence of removing the tolls.


regular87 said...

Don't hate me for this but I am a fan of higher gas taxes, reason being, they are needed to curb our dependence on foreign oil and because the efficiency of newer cars has drastically hurt the gas tax methodology.
I think gas taxes should be set at a percentage of product cost (much like sales tax, the higher the price the higher the tax). This would keep higher gasoline taxes from hurting our economy as we move into recovery and it would greatly increase when the cuts of OPEC kick in.
As for the tolls, I never knew they were set up to control flow, I dont live in a major city and always thought they were a grossly ineffective way of collecting taxes.

Yigal said...

I'm not sure I agree with you about traffic increasing along the pike, because I don't think the $1.25 toll it currently takes to cross Newton, for example, is high enough to divert many drivers to local roads. And besides, congestion inside Newton and other cities is arguably worse than pike congestion.