This week, President Donald Trump announced his infrastructure plan, which repeals the federal ban on tolling existing interstates. The Minnesota Department of Transportation recently released a tolling study that only fuels interest in this very bad idea.
The study, as reported in the Star Tribune’s recent article “MnDOT study considers tolls as a possible fix for roads,” presents potential toll revenues without accounting for the harmful economic impacts of tolls and toll diversion.
Tolls are not just new government dollars; they are drivers and businesses paying new taxes and having their lives disrupted. The reality is that tolls would hurt Minnesota’s citizens and economy, which should be at the forefront of this discussion.
The study also fails to address a key fact: Minnesotans have already paid for these roads. Adding tolls to existing infrastructure, as modeled on Interstates 35 and 94, and Hwys. 169, 610 and 52, would force drivers to pay not only a second time, but for many years to come.
Too often, toll studies create optimistic expectations for projects that fail to deliver. As Robert Bain, an analyst for bond-rating agency Standard & Poor’s, wrote in the journal Project Finance International, the tolling “process in general — and bid evaluation criteria specifically — reward high traffic and revenue forecasts, not accurate ones.”
Tolled projects tend to suffer from substantial optimism bias in forecasts, “with predicted traffic volumes exceeding actual volumes by 30 percent or more about half of the time,” according to research from the University of Texas.
It is not until years later, when projected toll revenues fail to arrive, that the studies are revealed to be inaccurate, at which point there is no accountability for the consultants whose analysis helped get the tolls built. Tolling studies’ rose-colored conclusions mislead policymakers into thinking tolls are a viable, worthwhile funding solution when, in fact, they are not.
Tolls are wasteful and effectively an inefficient tax. The U.S. Congressional Research Service estimates that administrative costs use 7 to 13 percent of collections from tolls, whereas the fuel tax has an administration fee of less than 1 percent.
As a taxpayer, I want 100 percent of revenue, or as close to it as possible, to go toward road and bridge improvements instead of subsidizing a new bureaucracy. With tolls, the driving public would pay far more per mile to enrich tolling companies rather than through a more sensible measure such as raising the fuel tax.
As the president of the Minnesota Trucking Association, I understand the importance of sustainable and reliable funding that can help Minnesota businesses plan for the long-term. Adding tolls to Minnesota highways would inject an enormous amount of uncertainty into the local economy. Tolls cause traffic diversion and alter the flow of goods, hurting businesses’ ability to compete. Decadeslong toll operations contracts would continuously tax Minnesotans more and more and give the public and policymakers little control over inescapable rate increases. Ever-rising costs for shipping companies would inevitably be passed on to consumers, further hurting Minnesota’s economy and residents.
Under Trump’s very disappointing infrastructure plan, unregulated tolls may be put in play for states. We urge Minnesotans to reject tolls and push Congress to do its job: pass a fuel tax increase. The fuel tax remains an efficient and scalable method for funding our roads, now and long into the future.
Before the tolling debate gets any further, every decisionmaker and stakeholder must be honest about the consequences of tolls. Only then can we have a real, productive conversation about how to fix our infrastructure.
John Hausladen is the president and CEO of the Minnesota Trucking Association.