w
But hold on a minute—Wisconsin has a budget problem. While the current budget shortfall is largely the recession's fault, long-term funding for highway reconstruction looks bleak. Gas taxes were used to fund infrastructure, but then cars became more fuel-efficient. Now, gas taxes wouldn't come close to funding serious highway reconstruction.
Of course, there is another way to fund reconstruction projects: road tolls. A new study from the Wisconsin Policy Research Institute shows that tolling could fund a significant portion of necessary construction and other projects in the future. According to the study's estimates, tolls on new rural lanes would bring in $5.1 billion over ten years, $300 million more than the $4.8 billion it would cost to reconstruct those rural lanes. New lane tolls would only bring in 17 percent of the $8.7 billion needed to reconstruct the urban interstates over ten years, but a comprehensive congestion-based pricing scheme could cover 71 percent of the needed improvements. This nearly fully-funded plan to rebuild Wisconsin's infrastructure with long-term jobs to stop the slow death of public-sector employment makes the liberal in me very happy.
But hold on another minute—taxes slow economic growth, and nobody should want that during a recession. Wouldn't this just be an expensive way to make people stop driving?
It is true that taxes—a toll is just another tax after all—can have adverse effects on economic growth. However, not all taxes are equally bad—for instance, a tax on income can make people less likely to invest, while a tax on consumption won't. Plus, not all taxes are meant to raise money. By taxing something, the goal may be to end up with less of the substance, such as tobacco or pollutants.
Tolls are actually used to do something besides raising revenue, namely to reduce congestion. Since drivers don't usually have to pay to use a road, more people use it. In many places, it's too many people. With too many cars on the road, traffic slows to a crawl, costing everyone time and money. However, if it costs money to use a road for each use, fewer people will use it, making the number of drivers on the road reach a more manageable level. The economic takeaway is familiar: We don't wan't congestion. If we tax it, we can have less of it.
Of course, the story doesn't end here. Transportation can be a commercial activity—wouldn't a tax on congestion, after causing fewer people to drive in an area, hurt that area's economy? It's easy to think this could happen. However, businesses in London, in an area with congestion pricing tolls, were more profitable, more productive and employed more people than those outside it. Similarly, in Trondheim, Norway, economic activity increased over the national trend after the addition of a toll. If the price of using the road can either be too low or too high, then there must be a point where the price is just right.
Clearly, a road toll makes good economic sense. Making transportation more expensive is bad for business, but so is congestion. If a tax gets rid of one bad thing (congestion) more than it creates another (expensive transportation), it just might be a good idea. Furthermore, the idea also makes good political sense. By coming up with new funding for construction projects, it separates the need for rebuilt highways from the politics of the state government keeping other spending down to pay for it.
With other reasonable policies such as carbon taxes not up for debate, congestion pricing for our roads is one of the best low-hanging fruit we have. We should grab it.
Zach Thomae is a freshman majoring in computer science. Please send all feedback to opinion@dailycardinal.com.
