Bipartisan legislative support for a tolling study likely exists and is validated by two major reports

By Robert W. Poole Jr. for the Badger Institute

During the 2018 session, the Wisconsin Legislature reached agreement on taking the next step toward a workable plan to rebuild and widen all the state’s aging Interstate highways. Unfortunately, then-Gov. Scott Walker vetoed the bill, which would have addressed the feasibility of paying for complete Interstate modernization via the revenue from all-electronic tolling.

Late last year, two major reports were released that strengthen the case for Wisconsin to do exactly that. One was from a national committee, charged by Congress with assessing what will be needed for a 21st century Interstate system, now that the old one is wearing out. The other was the Phase 2 study commissioned by Indiana’s Legislature in 2018, laying out how to proceed with toll-financed Interstate modernization.

The report of the federal Future Interstate Study Committee, titled “Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future,” found that most of the Interstates that were built in the 1960s and 1970s will need major reconstruction over the next two decades. In many cases, this will mean costly “full-depth pavement reconstruction.” And if there is a need for more lanes (as there is in many corridors), adding them at the same time as reconstructing the original lanes makes the most sense.

The report acknowledged the viability of using long-term financing backed by toll revenues (toll revenue bonds) as one way to do the modernization and the superiority of low-cost, all-electronic tolling over old-fashioned cash tolling using toll booths. And it called for Congress to repeal the 1956 ban on Interstate tolls.

The Indiana 2018 Phase 2 report, titled “Statewide Interstate Tolling Strategic Plan,” built on that state’s 2017 toll feasibility study — laying out a plan for toll-financed reconstruction and widening (i.e., replacement) of the aging lanes on all the state’s long-distance Interstates. Importantly, it called for making tolling the sole funding source for this set of mega-projects, which would reserve all existing federal and state fuel tax revenues for the rest of the state’s aging highway system.

As to the legality of using toll revenues for this purpose, the report acknowledged the existence of the 1956 federal ban but pointed out that Indiana has found an alternative way forward.

“INDOT has confirmed with the Federal Highway Administration that Indiana has federal authority to toll existing Interstates under the Section 129 (bridge replacement) program. INDOT would use this program as the backbone for a statewide Interstate tolling program.”

Rhode Island is already under way with a program that is adding electronic tolling gantries near aging bridges that will be rebuilt or replaced using the new toll revenue — in that state’s case, to be collected only from trucks.

What do these reports imply for Wisconsin?

First, the bipartisan legislative support for doing a Phase 2 Interstate tolling study still likely exists and has been validated by these two important reports. Second, the governor who vetoed doing that study is no longer in office.

So, the responsible thing for the Legislature to do this session is to pick up where it left off, authorizing the Wisconsin Department of Transportation to update what the Phase 2 study should do (in light of the federal and Indiana findings) and send it to Gov. Tony Evers for his signature.

Last year, it looked as though Indiana was going to be the first state to implement toll-financed reconstruction and modernization of all its Interstates. Alas, on the day its Phase 2 report was released, Gov. Eric Holcomb announced that tolling would not begin on his watch. (Indiana observers noted that Holcomb is up for re-election in 2020 and may change his tune once that event is behind him.) This gives Wisconsin a window to become the pioneer state in using toll financing to bring about a much-needed 21st century Interstate highway system.

A Phase 2 study would not commit Wisconsin to actually do this. It would be a way to figure out what it would cost to rebuild and widen (where needed) the state’s aging Interstates.

It could figure out the best ways to ensure that the tolling is done in a customer-friendly way — for example, by offering rebates for fuel taxes on the newly tolled corridors. It also could recommend ways to make the cost of electronic toll collection as low as possible, compared with the high cost of old-fashioned cash tolling. And it could assess value-added features for trucking companies, such as lots of safe overnight parking spaces with various other services, including electric vehicle recharging and alternative fuel sources.

Wisconsin can pioneer 21st century Interstates, becoming a model for all the other states. The time to begin is the 2019 legislative session.

Robert W. Poole Jr. is director of transportation policy at the Reason Foundation and author of Rebuilding and Modernizing Wisconsin’s Interstates with Toll Financing. Reposted here with permission from the Badger Institute.