Internalizing The Cost Of Roads

Recently, Virginia opened a single-passenger occupancy lane on a highway that, during rush hour, is carpool only (I-66). The catch? It’s tolled, and it’s expensive: up to $40 for a ten mile drive (the price is dynamically adjusted every six minutes to keep traffic moving).

But this new policy just might force drivers to internalize the externalities of driving (boldface mine):

The real reason there’s sticker shock is that the real cost of road transportation is hidden from most voters. Gas tax money goes to states and the US Department of Transportation which flows back as what seems like free federal money to build a lot of roads. Meanwhile, every transit project has to scrimp for funds and deal with constant sniping from critics calling it a “boondoggle.”

I-66 inside the Beltway is already built and not adding new capacity, but Virginia is adding lanes outside the Beltway under a public-private partnership, and Governor Larry Hogan has proposed the same for nearly every Maryland highway. That’s a really expensive proposition, and he’d prefer to make it sound cheap. But Ben Ross estimated that tolls would have to be at least $41 to pay off the costs of construction.

I haven’t seen a lot of people citing Ross’s numbers, but they should. After this experience in Virginia, that might be low!

Loudoun supervisor Matt LeTourneau pointed out on the Kojo Nnamdi Show that Virginia lawmakers might have made different decisions about the I-66 project had they known. For instance, the project cost $120 million, he said; maybe they wouldn’t have spent that kind of money. Perhaps this can be a cautionary tale for Maryland, to at least go into any widening and tolling with its eyes open (or eschew the idea).

The government could theoretically go back to the 20th century model of taxing more and building more free transportation, but voters haven’t shown much appetite for raising their taxes. This kind of transportation policy is the consequence.

Welcome to the budgetary world of mass transit, drivers…

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