FREQUENTLY ASKED QUESTIONS
ON THEIR PAST, PRESENT,
AND POSSIBLE FUTURE
February 18, 2009
By: James Fazzalaro, Principal Analyst
The purpose of this report is to provide information and guidance to legislators and other interested parties based on the questions the Office of Legislative Research receives most frequently on the issue of tolls and the constraints of federal law in this regard.
The report is divided into three parts.
● Part I provides answers to frequently asked questions on the general issue of tolls and congestion pricing and on the history of tolls on Connecticut highways.
● Part II responds to questions that are frequently asked regarding the restrictions of federal law with regard to tolling and the exceptions currently in the federal law permitting tolling under certain circumstances and within specific restrictions.
● Part III responds to questions regarding future prospects for tolling, the likelihood of changes in federal law, and some of the most significant issues that must be considered if tolls are to be reinstituted in Connecticut. This part also contains information on the toll study about to be presented to the Connecticut Transportation Strategy Board.
Users can go directly to questions of particular interest by following the link to the answer from the list of questions in the Table of Contents.
TABLE OF CONTENTS
PART I—OVERVIEW AND HISTORICAL INFORMATION ON TOLLS IN CONNECTICUT 5
What are “Tolls?” 5
Is “Congestion Pricing” the same thing as Tolls? 5
If federal-aid roads, and in particular Interstate Highways, are supposed
to be toll-free, why do I see tolls on the Massachusetts Turnpike, the New York Thruway, the Pennsylvania Turnpike, and so may other Interstates? 6
What tolls did Connecticut used to have? 6
How much revenue did the tolls produce? 7
The state agreed to take the tolls off of the Connecticut Turnpike in 1983.
How did the state benefit from its decision to remove them? 7
Why were the tolls removed? 8
PART II—FEDERAL RESTRICTIONS ON TOLLING 9
Does Federal Law Prohibit Tolls on Interstate Highways? 9
What are the federal law's several exemptions to the toll prohibition. 9
All right, in the simplest terms possible, what can states actually
do regarding tolls under current federal law? 9
What are some of the details of the six programs providing exceptions to the
tolling prohibition? 10
Section 129 Toll Agreements 10
Value Pricing Pilot Program 11
Express Lanes Demonstration Program 11
High Occupancy Vehicle Facilities (23 U.S.C. 166) 13
Interstate System Construction Toll Pilot Program 14
Interstate System Reconstruction and Rehabilitation Pilot Program 14
Pennsylvania's Unsuccessful Application for the Third Program Slot 15
I keep hearing about having to repay federal funds if we bring back tolls.
What is that all about? 16
PART III—FUTURE PROSPECTS AND MAJOR ISSUES 19
Isn't federal law on tolling going to change in the next
transportation reauthorization? 19
Why just focus on the Interstate highways in Connecticut?
What about tolling Connecticut's other expressways? 20
Is anything going on at the present time with regard to tolls in Connecticut? 21
Don't modern methods of electronic toll collection eliminate most
of the problems associated with tolling? 22
What are some of the other major issues Connecticut might have to
address in order to consider tolls in Connecticut? 22
Toll Project Selection 22
Diversion to Avoid Tolls 23
Toll Equity 23
PART I—OVERVIEW AND HISTORICAL INFORMATION ON TOLLS IN CONNECTICUT
What are “Tolls?”
Tolls are one type of tax that is known as a “third structure” tax. In the hierarchy of transportation-related taxes, driver's license and motor vehicle registration fees are called “first structure” taxes paid by anyone who gets a license or registers a vehicle without any regard to how much they use the highways. Motor fuel excise taxes are considered to be “second structure” taxes because, although not precisely, they relate somewhat more directly to how much the taxpayer actually drives than do first structure taxes like registration fees. The more someone drives, the more fuel that is consumed, and consequently, the more tax must be paid. Third structure taxes, like tolls or weight-distance taxes, are a type of user fee that has the most direct correlation to actual highway usage in that the toll rate is set, in effect, on a per mile basis so that the distance of the trip determines the total amount of the tax.
Is “Congestion Pricing” the same thing as Tolls?
In a way, it is. Congestion pricing is an emerging approach to applying tolls or other user fees based on application of economic principals of supply and demand. Historically, tolls have typically been applied on a uniform basis regardless of hour of the day, day of the week, or amount of traffic using the facility at any particular time. A vehicle using a toll bridge, tunnel, or highway paid a uniform toll rate whether it used the facility at 8 a.m. when travel demand is high or 2 a.m. when traffic is sparse.
Congestion pricing, also sometimes referred to as “value pricing,” is an approach where the transportation asset, e.g., the road, bridge, or tunnel, is seen as more valuable during certain times or traffic volumes than at others and this value is accounted for by charging a user more to travel on it during these higher demand periods.
The most common form of congestion pricing is application of variable tolls on either particular lanes, like express lanes, or a roadway as a whole. “Cordon charges” are another method where either a fixed or variable charge is levied for entering a congested area within a city. Oregon recently tested yet another form of area-wide road use pricing in order to evaluate the concept of charging vehicles a fixed rate per mile of travel fee instead of the gasoline excise tax.
If federal-aid roads, and in particular Interstate Highways, are supposed to be toll-free, why do I see tolls on the Massachusetts Turnpike, the New York Thruway, the Pennsylvania Turnpike, and so may other Interstates?
Congress created the Interstate Highway System (IHS) in 1956. The IHS concept was to create a nationwide system of expressways connecting the country's major urban centers to, among other things, move personnel and material efficiently in case of national emergency. Congress considered several ways to deal with the fact that toll-supported turnpikes already existed or were under construction in a number of states. One concern was not to create competing toll-free highways parallel to the turnpikes thus jeopardizing the legitimate rights of bondholders who had invested in the financing for those roads. Congress decided to incorporate these toll roads into the IHS because it would serve the dual objective of (1) providing connections between certain urban centers on the system more quickly and (2) freeing capital to build other parts of the system more expeditiously. That is why roads like the Connecticut Turnpike, New York Thruway, Massachusetts Turnpike, Florida Turnpike, and Ohio Turnpike were designated as IHS routes, but retained their toll systems. However, as part of the IHS no federal funds could be used for construction, reconstruction operation, or improvement of these roads.
What tolls did Connecticut used to have?
In 1983, the legislature ordered the tolls on the Connecticut Turnpike (eight tolls stations on I-95 and Route 52 from Greenwich to Plainfield) and the Hartford area bridges (the Putnam, Bissell, and Charter Oak bridges) to be closed and removed by specified dates when certain conditions were met. It followed this in 1986 with legislation requiring the closure of the tolls on the Merritt and Wilbur Cross Parkways (three toll stations in Greenwich, Milford, and Wallingford) by no later than July 1, 1988. The last Connecticut highway toll was paid at the charter Oak Bridge in Hartford on April 28, 1989.
Tolls on several other state highway bridges had been eliminated previously. The toll on the Mohegan-Pequot Bridge connecting Routes 32 and 12 in Montville was closed and removed in 1980 after the bonds issued for its construction were repaid. In earlier years, tolls were removed on the Gold Star Memorial Bridge on I-95 connecting Groton and New London, the Baldwin Bridge on I-95 connecting Old Saybrook and Old Lyme, and the Bulkley Bridge and Founders Bridge in Hartford.
Toll collection on the Connecticut Turnpike ended on October 9, 1985. Tolls on the Bissell Bridge and Putnam Bridge also ceased early in 1985. The tolls on the Merritt and Wilbur Cross Parkways closed on June 24, 1988. The Charter Oak Bridge tolls ended on April 28, 1989.
How much revenue did the tolls produce?
The total revenue generated through the tolls on the Turnpike, parkways, and the three bridges during the last full year of each's operations was approximately $72.3 million. Total operating costs attributed to toll operations were approximately $13.4 million, leaving overall net revenue of $58.9 million. However these figures do not reflect the value of fringe benefits, vacation and sick leave, longevity and bonuses for workers associated with toll collection and administration of the system which were not typically calculated as part of the overall balance sheets for toll operations. If the value of these benefits was calculated as a charge against the toll revenues using the benefit additive rates in effect during that period, it would probably have reduced the net revenue from tolls by another $6-7 million to around $51-53 million.
The state agreed to take the tolls off of the Connecticut Turnpike in 1983. How did the state benefit from its decision to remove them?
In 1978, Congress added a provision to the federal law that allowed segments of toll roads that were part of the Interstate Highway System to qualify for federal funding earmarked for resurfacing, restoration, rehabilitation, or reconstruction (Interstate 4R Funds). To qualify, the responsible state authority had to agree to remove all tolls once the costs associated with the road's construction, including debt service, had been satisfied. Once the state signed one of these “Secretarial Agreements,” the “toll-captive” mileage could be included in the state's eligible mileage for annual apportionment of the federal 4R money (23 U.S.C. Sec. 105, later codified as Sec. 119).
Connecticut executed a Secretarial Agreement on August 30, 1983 for the Connecticut Turnpike. It agreed to remove all of the tolls when the remaining bonds for the road were retired and the costs of removing the toll facilities were covered by toll revenue. In exchange, the mileage of the Connecticut Turnpike was added to Connecticut's eligible 4R mileage, resulting in an initial increase of $11-12 million annually. But besides this additional federal funding, removal of the tolls meant that federal funds could now be used to pay for improvements to the highway. Some of the projects that have been paid for largely with federal funds since the toll removal are the (1) reconstruction of exits 23-30 in Bridgeport, (2) reconstruction of exits 8-10 in Stamford, (3) the Saugatuck River bridge replacement in Westport, and (4) several other larger projects that are still underway (I-91/Route 34 reconstruction) or about to begin (Pearl Harbor Bridge and Housatonic River Bridge replacements). Connecticut also received emergency funding in 1983 to replace the Mianus River Bridge because of its agreement to remove the tolls on I-95. This agreement is still in effect.
Why were the tolls removed?
During the early 1980s, the General Assembly was repeatedly asked to address the issue of the tolls on the Connecticut Turnpike and the parkways. A grass roots organization composed principally of Fairfield County residents called “Banish All Tolls” was formed to convince the legislature of its cause. A number of legislators from lower Fairfield and New Haven counties, some of whom sat on the Transportation Committee, provided a forum for the group.
The toll removal proponents made the following points:
● The tolls disproportionately burdened commuters in certain parts of the state.
● Vehicles slowing and stopping to pay tolls wasted fuel; created excess noise; and produced hazardous air pollutants, lead, and asbestos in the areas around the toll plazas.
● Tolls added to congestion and time lost to individuals and businesses and negatively affected the southwest region's economic growth.
● The toll plazas created significant safety hazards.
● The existence of tolls prevented federal funds from being used to improve the deteriorated conditions of the toll roads and bridges.
Amidst this debate, on January 19, 1983, a tractor-trailer crashed through a toll lane at the Stratford toll and hit three vehicles waiting to pay. The accident resulted in seven fatalities and several injuries and is considered by many to have been the event that tipped the balance toward toll removal. Two years later, in September 1985, another fatality at the Stratford toll caused Governor O'Neill to order all of the tolls on the Turnpike closed two months ahead of schedule.
PART II—FEDERAL RESTRICTIONS ON TOLLING
Does Federal Law Prohibit Tolls on Interstate Highways?
Historically, federally-aided highways have been required to be toll-free. Specifically, 23 U.S.C. Sec. 310 requires, except as otherwise provided by federal law, that “all highways constructed under the provisions of this title shall be free from tolls of all kinds.”
There were essentially no exceptions to this prohibition for decades from the time the federal-aid highway program was created in 1916. In 1927, Congress made the first exception to the toll prohibition when it permitted federal funding to be used to construct toll bridges and bridge approaches. Congress added several more exceptions over the years; specifically in 1978, 1987, 1991, 1998, and most recently in 2005. Some of them are explained in more detail below.
What are the federal law's several exemptions to the toll prohibition.
Under federal law, six exceptions have evolved where tolls are permitted. They include:
● Section 129 Toll Agreements
● The Value Pricing Pilot Program
● The Express Lanes Demonstration Program
● High Occupancy Vehicle (HOV) Facilities
● The Interstate System Construction Toll Pilot Program
● The Interstate Reconstruction and Rehabilitation Pilot Program
All right, in the simplest terms possible, what can states actually do regarding tolls under current federal law?
Under the current federal law, and subject to specific conditions and restrictions, the following things are possible:
● New non-Interstate highways, bridges, and tunnels can be constructed as toll facilities (Section 129 Agreement)
● Toll-free non-Interstate highways, bridges, and tunnels can be reconstructed and converted to toll facilities (Section 129 Agreement)
● Toll-free Interstate bridges or tunnels can be reconstructed or replaced and converted to toll facilities (Section 129 Agreement)
● An existing HOV lane on a non-tolled road can be converted to charge a toll to single-occupant vehicles if certain conditions are met (HOV facilities exception)
● New lane capacity may be added to a previously non-tolled road (including an Interstate highway) and the new lanes may be tolled (Express Lanes Demonstration Program)
● Three new Interstate highways throughout the country can be constructed as toll roads, but use of toll revenue is restricted (Interstate Construction Toll Pilot Program)
● Three existing non-tolled Interstate highways throughout the country may be reconstructed and converted to toll roads if specific conditions are met and the toll revenue use is restricted (Interstate Reconstruction and Rehabilitation Pilot Program)
What are some of the details of the six programs providing exceptions to the tolling prohibition?
Section 129 Toll Agreements
This exception was put into the law in 1991. Under 23 U.S.C. 129, federal funds may be used for:
Ø Initial construction of new non-Interstate toll highways, bridges, or tunnels, including approaches
Reconstructing, resurfacing, restoring, or rehabilitating any existing toll facility
Ø Reconstructing or replacing free Interstate or non-Interstate bridges or tunnels and converting them to toll facilities
Ø Reconstructing a free non-Interstate highway and converting it to a toll facility
Ø Preliminary feasibility studies for any of the above
To do any of these, a state authority must execute a “Section 129 agreement” with the Secretary of Transportation. Under the agreement, all toll revenue must first be used for: debt service, reasonable return on private investment, and operation and maintenance of the facility (including reconstructing, resurfacing, restoring, and rehabilitating work). There must also be a provision governing disposition of excess toll revenue (revenue exceeding that required for the above activities). The provision can allow excess revenue to be used only for highway and transit purposes authorized under Title 23 of federal law.
More than 70 active Section 129 agreements are currently in effect throughout the country.
Value Pricing Pilot Program
The Value Pricing Pilot Program exception was created in 1991 as the Congestion Pricing Pilot Program and carried over as the Value Pricing Pilot Program in the 1998 and 2005 transportation reauthorization acts. It differs from the other exceptions in that it is basically a grant program rather than a tolling authorization. Agreements may be signed with up to 15 state or local governments and multiple projects are possible within a single jurisdiction. Only one slot remains to be awarded out of the 15 authorized in the law.
Grants are for pre-implementation study activities and implementation costs for a maximum of three years. Revenues derived from a value pricing pilot project must first be applied to the project's operating costs. Excess revenues may be used for any transportation projects eligible for funding under Title 23, but states are encouraged to use excess revenue to provide benefits to those traveling in the corridor where the project is implemented. Value pricing concepts that have become mainstream, such as HOV to HOT lane conversions, are no longer funded under this program.
Express Lanes Demonstration Program
The Express Lanes Demonstration Program (ELD) exception was created in the 2005 reauthorization act. It permits tolling on selected facilities to (1) manage high levels of congestion, (2) reduce emissions in a non-attainment area or maintenance area under the Clean Air Act, or
(3) finance added Interstate lanes for the purpose of reducing congestion. The law authorizes approval of up to 15 demonstration programs nationwide.
The four types of eligible toll facilities for which an express lanes demonstration project can be proposed are:
● A facility in existence on August 10, 2005 that collects tolls
● A facility in existence on August 10, 2005 that serves high occupancy vehicles
● A facility modified or constructed after August 10, 2005 to create additional tolled lane capacity, including a facility constructed by a private entity or using private funds
● Only the new lane, in the case of a new lane added to a previously non-tolled facility.
There are two ways that existing non-tolled capacity may be tolled under the ELD program exception. First, a state can toll a facility in existence on August 10, 2005 (the date the law was enacted) that serves high occupancy vehicles. Second, a state may toll a facility that is modified or constructed after August 10, 2005 to create additional tolled lane capacity. In this case, the state could toll the existing non-tolled lanes when the new toll lane is created and the existing lanes are modified or reconstructed. If the existing lanes are not modified, then only the new lane may be tolled. Tolling existing lanes is only permitted if the improvements are expected to improve or benefit, directly or indirectly, the operational performance of the entire length of the facility proposed for tolling. The state must be able to adequately demonstrate these benefits in its project application.
The state must execute a toll agreement for an ELD project with the Federal Highway Administration (FHWA) by September 30, 2009. The toll revenue restrictions are similar to those with a Section 129 agreement that is, toll revenue must first be used for debt service; reasonable return on private investment; and costs of operation, maintenance, and improvement of the facility. If a state certifies annually that excess revenue exists beyond that necessary to fulfill the first call requirements, it may be used for other highway or transit projects authorized under federal law.
Tolls on ELD projects must be collected through non-cash electronic means.
High Occupancy Vehicle Facilities (23 U.S.C. 166)
The laws governing use of HOV lanes were broadened in 2005 to authorize states to allow otherwise unauthorized vehicles to use HOV lanes if they pay a toll. These facilities are known as High Occupancy Toll or HOT lanes. The exception includes HOV lanes on Interstate highways. The state must establish a program that (1) addresses how motorists can enroll in the toll program, (2) establishes policies and procedures for managing use of the HOT lane through variable toll rates, and (3) provides for enforcement of violations. Tolls collection on a HOT lane may be by electronic means only. The toll only applies to the HOV lane and not the remainder of the road.
A state must limit or discontinue use of a HOT lane if use by toll-paying vehicles degrades the HOV lane's performance. A lane's performance is considered degraded if traffic on it fails to maintain a minimum average operating speed 90% of the time over a consecutive 180-day period during morning or evening weekday peak periods (or both morning and evening periods). A minimum average operating speed is defined as 45 mph for an HOV lane with a speed limit of 50 mph or 10 mph below the speed limit if it is less than 50 mph.
Toll revenue under this program must first be used for debt service; reasonable return on investment; and costs for operation, maintenance, and improvement of the facility. The state must certify annually that the facility is being adequately maintained. Excess toll revenue can be used for any purpose eligible under Title 23, but the state must give priority in its use to projects for developing alternatives to single-occupant-vehicle travel and for improving highway safety.
HOV lane conversion to a HOT lane is now considered a mainstream activity and no longer eligible for planning or implementation funding under the Value Pricing Pilot Program.
Interstate System Construction Toll Pilot Program
This exception allows up to three new highways to be constructed on the Interstate System as toll facilities. The exception applies to Interstate routes and not to individual states, so adjoining states can enter a compact to build a new Interstate highway that crosses the border and counts as only one project, not two. To qualify, the state must be able to demonstrate that financing the construction of the new road through tolls is the most economical and efficient way to advance the project. More than one of the three allowable projects can be in a single state.
If a new Interstate highway is constructed under this program, it no longer qualifies for use of federal Interstate Maintenance program funding as long as it is tolled.
The state must agree not to enter into any non-compete agreement with a private entity that would prevent it from improving or expanding public roads in the vicinity of the toll road to address conditions resulting from traffic diverted to nearby free roads from the toll road.
All tolls must be collected through an electronic system. Toll revenue must stay with the facility and may only be used for debt service, reasonable return on private investment, and operation and maintenance costs. Note that there are no provisions allowing excess toll revenue to be used off the toll facility.
One of the three available slots under the program has been assigned for construction of new I-73 in South Carolina. The other two slots remain available. Applications for a program slot must be submitted before August 10, 2015.
Interstate System Reconstruction and Rehabilitation Pilot Program
This exception program was put into the law in 1998. The program allows up to three existing Interstate facilities—highways, bridges, or tunnels—to be tolled to fund needed reconstruction or rehabilitation on Interstate highway corridors that could not otherwise be adequately maintained or functionally improved without the collection of tolls. Each facility must be in a different state. The FHWA is only entertaining applications for highways under the program, since states can already rehabilitate or replace bridges and tunnels on the Interstate System and convert them to toll facilities.
To qualify, a state must submit an analysis demonstrating that the highway cannot be maintained or improved to meet current or future needs from the state's federal highway aid apportionments and allocations, along with any other sources of revenue without toll revenue.
Federal Interstate Maintenance program funding can no longer be used on any facility reconstructed under this exception as long as tolls are being collected. The state must execute an agreement with the FHWA which limits the use of any toll revenue to (1) debt service, (2) reasonable return on private investment used to finance the project, and (3) any costs associated with the proper operation and maintenance of the highway and necessary for improvement of the toll road, including reconstruction, resurfacing, restoration, and rehabilitation. The agreement must also provide for (1) annual state audits to ensure compliance with the revenue use restrictions and (2) submission of these audits to the FHWA.
Two of the three available slots under this program have been allocated to (1) Missouri for its proposal to reconstruct and, in some areas, widen I-70 which runs for approximately 200 miles between Kansas and St. Louis and (2) Virginia for its proposal to reconstruct and expand I-81 for its entire length of 325 miles. One of the options Virginia is considering could include building exclusive truck-only tolled lanes.
Pennsylvania's Unsuccessful Application for the Third Program Slot
In 2007, Pennsylvania applied for the third and final slot under the program with a proposal to rebuild the entire length of I-80 and convert it to a toll facility. FHWA's ultimate rejection of the application provides some insight into the significant constraints the federal law imposes on use of toll revenue from a toll-converted Interstate highway under this program.
Pennsylvania's proposal was complicated in that the state had leased I-80 to the Pennsylvania Turnpike Commission in exchange for large annual lease payments through which the state intended to fund a large number of transportation projects statewide. The commission was seeking to rebuild I-80 and convert it to a toll road with a portion of the revenue going to cover its lease payments to the state. While the FHWA acknowledged that it considered lease payments to be a valid operating cost within the meaning of the toll revenue use restrictions of the federal law, it raised concerns that there appeared to be no indications in the application that the lease payments were related to the true costs of the leasehold interest. Rather, it felt that the lease payments had been predetermined in the lease agreement legislation based on considerations largely unrelated to the true costs of a leasehold interest in I-80. When the revised application did not explain how the lease payments were calculated, something the FHWA specifically requested, the agency concluded that there was insufficient support that the lease payments
had a rational relationship to the market value of I-80 or the actual market-based cost to the commission in acquiring an interest in the highway. While it had other concerns, the FHWA rejected the application largely on this basis.
Principal Features of the Six Federal Tolling Exceptions
Section 129 Toll Agreements
Value Pricing Pilot Program
● Provides grants to encourage implementation and evaluation of value pricing projects to manage highway congestion through tolls and other pricing mechanisms
● Projects involving non-toll-based strategies like mileage-based vehicle taxes and leasing fees, parking pricing, and car sharing are considered as well as tolling strategies
● 15 states may participate; one slot remains
● Participating states may apply for grants for multiple projects
● In FY 2009, a total of $12 million was available for grants with $3 million of it set aside for projects that do not involve tolls
Express Lanes Demonstration Program
● Applies to existing toll facilities, highways that serve high occupancy vehicles, and non-tolled highways modified to create new lanes
● Where a new lane is added to a previously non-tolled facility, only the new lane may be tolled
● Existing non-tolled lanes may be converted to toll lanes only if new lane capacity is added and the existing lanes are modified or reconstructed
● 15 projects may be approved nationwide
● Restricts use of toll revenue to facility costs and, if sufficient, to other approved highway or transit projects
High Occupancy Vehicle Facilities
● Single occupant vehicle may be permitted to use HOV lane if such vehicles pay a toll
● Tolls must be collected by electronic means and lane use must be managed through variable toll rate structure
● Toll applies only to the HOV lane
● State must have a plan, policies, and procedures in place to provide effective enforcement
● Toll program must be discontinued if additional traffic degrades HOV lane performance below specified standards
● Restricts use of toll revenue to facility costs and, if sufficient, to other approved transportation uses with priority to projects developing alternatives to single-occupant-vehicle travel and for improving safety
Interstate System Construction Toll Pilot Program
● Applies only to construction of a new highway
● Limits approval to only three projects, but a single highway project can involve more than one state
● Once tolled, the highway no longer qualifies for use of federal Interstate Maintenance funding
● Restricts use of toll revenue to facility-related costs
Interstate System Reconstruction and Rehabilitation Pilot Program
● An existing non-tolled Interstate highway, bridge, or tunnel may be reconstructed and converted to a toll facility
● Only three program slots are available and must be in different states
● State must demonstrate that the facility cannot be otherwise adequately maintained or improved without the use of tolls
● Once tolled, the highway no longer qualifies for use of federal Interstate Maintenance funds
● Restricts use of toll revenue to facility-related costs
I keep hearing about having to repay federal funds if we bring back tolls. What is that all about?
For a considerable time in the past, the answer to this question regarding repayment was unequivocally “Yes, federal funds must be repaid.” And there are historical precedents where this was required. However, over time, as the exceptions have been added to the federal law, the answer to this question probably has become “No, as long as what you are doing fits within one of the available exceptions.”
Federal law does not explicitly require the repayment of federal funds, but the general toll prohibition of 23 U.S.C. 301 and past Congressional action on two occasions when authorizing an Interstate highway built with federal funds to be turned into a toll road have worked together to establish the precedent for repayment as a condition for conversion. This requirement was imposed on Delaware and Maryland in 1960 in order for them to convert the Kennedy Memorial Highway (I-95); in 1981 on Maine to reestablish tolls on a section of the Maine Turnpike; and in 1991 on New Hampshire for repayment of federal funds received for the completed sections of the Nashua-Hudson Circumferential highway.
There have also been occasions when states signed Section 129 agreements regarding a toll facility, but changed their mind before the tolls were actually removed and were able to free themselves from the agreements by agreeing to repay the federal funds they received after signing the agreements. This happened with the Indiana Toll Road and the Richmond-Petersburg Turnpike in Virginia. There are also some incidents where the conditions attached to toll conversion legislation caused the state to abandon its plans for the conversion. Thus, while the number of instances of repayment is not excessively large, the repayment precedent certainly exists.
Connecticut received an explicit confirmation of this in 1984. Department of Transportation Commissioner J. William Burns had asked the FHWA division administrator several questions regarding (1) retaining some of the tolls on I-95 and (2) erecting a toll facility on I-95 at the Rhode Island border. The FHWA division administrator James Barakos, responded on February 6, 1984 that if Connecticut retained some of the tolls, it would have to enter a new Secretarial Section 105 agreement that would require repayment of all of the federal funds it had received after the first agreement was signed and would also forfeit its right to receive the emergency relief funding it received following the Mianus River Bridge collapse. With respect to putting up a toll at the Rhode Island border, Barakos stated that all of the federal funds used for projects on I-95 from its juncture with the Connecticut Turnpike to the Rhode Island border would have to be repaid.
Congress appears to have been more flexible in its treatment of situations involving toll removal agreements that a state sought to modify in order to retain tolls they had agreed to remove. The 1987 Federal Aid Highway Act contained a provision that, in effect, voided several states' toll removal agreements and instead, allowed them to enter new agreements that allowed tolls to continue as long as the revenue was used only on the facility for construction and reconstruction costs, operations, and debt service. The facilities involved were the West Virginia Turnpike, Kansas Turnpike, and Fort McHenry Tunnel in Baltimore. Another similar provision affected the agreement for the Newburgh-Beacon Bridge in New York, except that it permitted toll revenue to be used for any of the bridges under the jurisdiction of the New York Bridge Authority. In 1991, similar provisions were adopted in the reauthorization legislation for the toll bridge on I-78 over the Delaware River that connects New Jersey and Pennsylvania. It allowed the two states to replace their toll removal agreement, without having to repay federal funds, with one continuing toll collection and dedicating the revenue to debt service and facility-related costs with any excess revenue being available for any other bridge under the jurisdiction of the Delaware River Joint Toll Bridge Commission. Also in 1991, Congress approved authority overriding the toll removal agreements for the New York Thruway and the Fort McHenry Tunnel. It allowed tolls to continue on these facilities without repayment of federal funds and permitted toll revenue to be used for costs associated with the facilities or for any other transportation project eligible for assistance under Title 23.
As time has passed and new exceptions to the toll prohibition were enacted, some of these circumstances have changed. There seems little doubt that if a toll project falling within one of the exception programs was pursued and the appropriate requirements met, federal funds
repayment would not be an issue. However, if a state were to act unilaterally in a way that clearly fell outside of the available exceptions to the federal toll prohibition there is no basis to conclude that repayment of federal funding would not be a potential problem.
PART III—FUTURE PROSPECTS AND MAJOR ISSUES
Isn't federal law on tolling going to change in the next transportation reauthorization?
It is true that the federal law may be changed to further relax the toll restrictions at some point, but it is not certain to what extent or when this will happen. The current federal transportation authorization (SAFETEA-LU) expires on September 30, 2009. The Congress must enact a new multi-year authorization bill before that date or else the federally-authorized programs expire.
There certainly is some support for giving states more latitude in using tolling both in terms of the additional flexibility it would give them and the effect it would have on reducing the burden on the Federal Highway Trust Fund. However, there was also significant support for this during consideration of the last transportation reauthorization and no major changes were ultimately enacted. It is reasonable to assume that there could be even greater interest in relaxing the restrictions, but until Congress actually begins to consider the reauthorization legislation, it is uncertain what form the changes may take.
The other issue is when the reauthorization legislation may actually be adopted. Although theoretically it must be in place by October 1, 2009, the last two reauthorizations were not completed before the prior law expired and Congress had to keep the program functioning through continuing resolutions. That could happen again, given the difficulty of reaching consensus on such a complex piece of legislation and the other significant issues Congress must also address this year. When the authorization legislation expired in 1997, it took an additional eight months past the expiration date for the reauthorization to become law. When that law expired in September 2003, it took almost 23 months more for the current reauthorization to become law. Congress kept the programs alive through a series of 12 extensions until mid-August 2005. While that may not be the case this time, it remains to be seen if the new legislation will be in place by October.
Why just focus on the Interstate highways in Connecticut? What about tolling Connecticut's other expressways?
Yes, these non-Interstate expressways could be tolled, and under the federal law there are fewer restrictions on tolling non-Interstate highways. Connecticut has a number of non-Interstate expressways such as Route 2, Route 8, Route 9, and Route 25, to name but a few. But in reality, the vast majority of highway travel on Connecticut's expressways occurs on its Interstates, not on its other expressways.
Compared to many other states and the nation as a whole, Connecticut is relatively Interstate-dependent with regard to highway travel. According to annual data compiled by the FHWA, in 2007 almost 32.5% of all the vehicle miles traveled (VMT) in Connecticut occurred on its Interstate highways. Nationally, only 24.4% of all VMT occurs on Interstate System. Connecticut's Interstate VMT percentage is higher than many other states.
Yet the total lane miles of Connecticut's 346 Interstate highway route miles represents only 4.1% of all of the state's public road lane miles and 11.7% of all the non-local lane mileage. Even more to the point, 71.2% of all of the VMT traveled in Connecticut in 2007 on its expressway network occurred on the Interstate highways. So while it certainly is possible to consider tolls on the non-Interstate expressways, fewer than three in 10 expressway miles are driven on the non-Interstates. Tolling non-Interstate expressways is easier to accomplish than tolling Interstate expressways, but provides less revenue production and congestion management benefits.
Is anything going on at the present time with regard to tolls in Connecticut?
In 2008, the legislature provided funding for the Office of Policy and Management to hire a consultant to do a toll/congestion pricing study and provide analysis on a range of alternatives to the Transportation Strategy Board (TSB). In January 2009, the consultant, Cambridge Systematics, presented the TSB with its Phase 2 interim report, in which it identified and provided an overview of several candidate tolling concepts on which it would conduct a more detailed evaluation in a Final Report on February 19, 2009.
The consultant identified the following concepts for its Phase 3 evaluation:
Candidate Tolling Concepts Under Further Evaluation
Concept A—New Toll Express Lanes on Highway Expansions
I-95 expansion east of New Haven to Rhode Island
I-84 expansion from Danbury to Waterbury
Concept B—Border Tolling on Major Highways
(I-95, I-84, I-91, I-395, Route 15, Route 6)
Concept C—Truck-Only Tolling on All Limited Access Highways
Concept D—HOV to HOT Lane Conversion
Concept E—Convert Highway Shoulders on All Limited Access Highways to HOT
Concept F—Toll Individual Highways Needing New Capacity and/or Reconstruction
I-95 east of New Haven to Rhode Island
I-84 Danbury to Waterbury
Concept G-1—Toll All Limited Access Highways in Connecticut
Concept G-2—Statewide Tolling of All Vehicle Miles Traveled
Concept H—Congested Corridor Tolling
Sample corridor—I-95/Route 15 Fairfield County
The Phase 3 portion of the study intends to evaluate these concepts with respect to traffic, revenue, and cost estimates; regional equity; economics; environment; and safety factors. Some of these, like HOV lane conversion and constructing new toll express lanes on planned Interstate highway expansions fall within the current federal tolling exceptions. Others like border tolling all major highways, tolling all limited access highways, and congested corridor tolling, probably do not. Concept G-2, statewide tolling of all vehicle miles traveled has never been tried anywhere, but is similar to the concept that Oregon pilot-tested on a very limited basis in 2006 and 2007.
Don't modern methods of electronic toll collection eliminate most of the problems associated with tolling?
Modern tolling technology that permits toll collection through electronic transmission of information between overhead toll structures and vehicle-mounted transponders is gaining significantly wider use around the country. Under most of the current federal tolling exceptions, electronic toll collection must be an integral part of any acceptable proposal. However, true “open road tolling” where all tolls are collected electronically and no provisions at all are made for payment with cash by those without vehicle transponders is still a relatively rare occurrence in the United States, except for applications involving specifically constructed express lanes within a free road, such as the SR 91 express lanes in Orange County, California, or an entirely new road built to augment a free road network, such as the non-Interstate highway North Texas Tollway network. Older toll highways such as the Garden State Parkway are moving toward a greater use of highway-speed electronic toll collection, but continue to maintain capabilities for cash collection at the same time. At least at present, most of the electronic tolling applications are hybrid systems that incorporate both high- or medium-speed electronic lanes with separate cash lanes.
What are some of the other major issues Connecticut might have to address in order to consider tolls in Connecticut?
Assuming that the restrictions of federal law can be either worked within or overcome, there are significant issues Connecticut may have to address in implementing tolling concepts. Some of the larger ones are discussed briefly below.
Toll Project Selection
Although HOV to HOT lane conversion is perhaps the easiest type of toll application for Connecticut to achieve fairly quickly, it would have limited impact. Connecticut makes very little use of HOV lanes so there are not many candidates. The only HOV lanes that currently exist are on I-84 east of Hartford and I-91 north of Hartford. Many of the other possibilities, particularly those involving the Interstate highways, contemplate construction of additional lane capacity or major reconstruction. But Connecticut has done relatively little new highway construction over the last 20 years. Expanding some highways, such as I-95 west of New Haven, could prove challenging because of the difficulty in acquiring the necessary rights-of-ways. According to Connecticut DOT data, the growth of state highway route mileage over the period from 1990 through 2006 was only 2.2%.
Diversion to Avoid Tolls
Consideration of any toll proposals will probably have to include careful consideration of the potential for traffic diversion from the tolled roads to nearby free roads. Diversion is generally influenced by two factors: the ease with which a toll can be avoided and the economic incentive to avoid the toll. Depending on the roads involved in a tolling proposal, the diversion issue could prove difficult. For example, on I-95 the frequency of entrances and exits makes it easier to get on and off the highway if there is sufficient economic incentive to do so. The section of I-95 from Greenwich to the bridge crossing New Haven harbor is approximately 48 miles and within that distance there is an average of approximately one entrance/exit per mile. By comparison, I-80 through Pennsylvania is 311 miles long and has 60 interchanges for an average of one every 5.2 miles.
The issue of toll equity involves several considerations. One is whether a particular toll proposal disproportionately affects a particular geographic region or group of users. If tolling creates the perception of inequity, it may have more difficulty gaining public acceptance.
Another equity issue involves how tolling would be perceived with regard to the other ways Connecticut raises highway-related revenue through license and registration fees and fuel taxes and how it would use the additional revenue raised through tolling. Adding wide-effect tolling in addition to the existing fees and fuel taxes may create a perception of taxing more than once for essentially the same travel.
Specific types of tolling can raise other perceptions of inequity. For example, HOT lanes have been criticized by some as so-called “Lexus lanes” which provide travel convenience for those who can afford to pay. Congestion-based toll rates can sometimes be perceived as penalizing commuters.
Border-only tolling can raise another difficult equity question with respect to issues of interstate commerce. Some might challenge this as inequitable when considered in the context of an undue burden it might place on residents whose primary travel involves crossing state borders compared to residents who travel primarily in-state or as discriminatory if it creates an excessive tax burden on non-residents while most residents travel without paying tolls.
The wider use of electronic toll collection has raised certain privacy issues. The use of electronic vehicle tracking to collect toll payments and camera-based enforcement policies can be very important to those concerned with privacy and protection of personal information. If participation in such a system is essentially voluntary through an individual's decision to use a tolled express lane or HOT lane or a toll-captive highway when non-tolled alternatives are readily available, privacy can be less of an issue. But when a traveler has little or no alternative but to drive on an all-electronic toll facility, how personal information is collected, protected, and retained; with whom it is shared; and how cameras are used to monitor compliance can take on greater importance.