Highway Finance
States' Expanding Use of Tolling Illustrates Diverse Challenges and Strategies Gao ID: GAO-06-554 June 28, 2006Congestion is increasing rapidly across the nation and freight traffic is expected to almost double in 20 years. In many places, decision makers cannot simply build their way out of congestion, and traditional revenue sources may not be sustainable. As the baby boom generation retires and the costs of federal entitlement programs rise, sustained, large-scale increases in federal highway grants seem unlikely. To provide the robust growth that many transportation advocates believe is required to meet the nation's mobility needs, state and local decision makers in virtually all states are seeking alternative funding approaches. Tolling (charging a fee for the use of a highway facility) provides a set of approaches that are increasingly receiving closer attention and consideration. This report examines tolling from a number of perspectives, namely: (1) the promise of tolling to enhance mobility and finance highway transportation, (2) the extent to which tolling is being used and the reasons states are using or not using this approach, (3) the challenges states face in implementing tolling, and (4) strategies that can be used to help states address tolling challenges. GAO is not making any recommendations. GAO provided a draft of this report to U.S. Department of Transportation (DOT) officials for comment. DOT officials generally agreed with the information provided.
Tolling has promise as an approach to enhance mobility and finance transportation. Tolling can potentially enhance mobility by reducing congestion and the demand for roads when tolls vary according to congestion to maintain a predetermined level of service. Such tolls can create incentives for drivers to avoid driving alone in congested conditions when making driving decisions. In response, drivers may choose to share rides, use public transportation, travel at less congested times, or travel on less congested routes, if available. Tolling also has the potential to provide new revenues, promote more effective investment strategies, and better target spending for new and expanded capacity. Tolling can also potentially leverage existing revenue sources by increasing private-sector participation and investment. Over half of the states in the nation have or are planning toll roads to respond to what officials describe as shortfalls in transportation funding, to finance new highway capacity, and to manage road congestion. While the number of states that are tolling or plan to toll has grown since the completion of the Interstate Highway System, and many states currently have major new capacity projects under way, many states report no current plans to introduce tolling because the need for new capacity does not exist, the approach would not generate sufficient revenues, or they have made other choices. According to state transportation officials who were interviewed as part of GAO's nationwide review, substantive challenges exist to implementing tolling. For example, securing public and political support can prove difficult when the public and political leaders argue that tolling is a form of double taxation, is unreasonable because tolls do not usually cover the full costs of projects, and is unfair to certain groups. Other challenges include obtaining sufficient statutory authority to toll, adequately addressing the traffic diversion that might result when motorists seek to avoid toll facilities, and coordinating with other states or jurisdictions on tolling projects. GAO's review of how states implement tolling suggests three strategies that can help facilitate tolling. First, some states have developed policies and laws that facilitate tolling. For example, Texas enacted legislation that enables transportation officials to expand tolling in the state and leverage tax dollars by allowing state highway funds to be combined with other funds. Second, states that have successfully advanced tolling projects have provided strong leadership to advocate and build support for specific projects. In Minnesota, a task force was convened to explore tolling and ultimately supported and recommended a tolling project. Finally, tolling approaches that provided tangible benefits appear to be more likely to be accepted than projects that offer no new tangible benefits or choice to users. For example, in California, toll prices on the Interstate 15 toll facility are set to keep traffic flowing freely in the toll lanes.
GAO-06-554, Highway Finance: States' Expanding Use of Tolling Illustrates Diverse Challenges and Strategies
This is the accessible text file for GAO report number GAO-06-554
entitled 'Highway Finance: States' Expanding Use of Tolling Illustrates
Diverse Challenges and Strategies' which was released on July 28, 2006.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to Congressional Requesters:
June 2006:
Highway Finance:
States' Expanding Use of Tolling Illustrates Diverse Challenges and
Strategies:
GAO-06-554:
GAO Highlights:
Highlights of GAO-06-554, a report to congressional requesters
Why GAO Did This Study:
Congestion is increasing rapidly across the nation and freight traffic
is expected to almost double in 20 years. In many places, decision
makers cannot simply build their way out of congestion, and traditional
revenue sources may not be sustainable. As the baby boom generation
retires and the costs of federal entitlement programs rise, sustained,
large-scale increases in federal highway grants seem unlikely. To
provide the robust growth that many transportation advocates believe is
required to meet the nation‘s mobility needs, state and local decision
makers in virtually all states are seeking alternative funding
approaches. Tolling (charging a fee for the use of a highway facility)
provides a set of approaches that are increasingly receiving closer
attention and consideration. This report examines tolling from a number
of perspectives, namely: (1) the promise of tolling to enhance mobility
and finance highway transportation, (2) the extent to which tolling is
being used and the reasons states are using or not using this approach,
(3) the challenges states face in implementing tolling, and (4)
strategies that can be used to help states address tolling challenges.
GAO is not making any recommendations. GAO provided a draft of this
report to U.S. Department of Transportation (DOT) officials for
comment. DOT officials generally agreed with the information provided.
What GAO Found:
Tolling has promise as an approach to enhance mobility and finance
transportation. Tolling can potentially enhance mobility by reducing
congestion and the demand for roads when tolls vary according to
congestion to maintain a predetermined level of service. Such tolls can
create incentives for drivers to avoid driving alone in congested
conditions when making driving decisions. In response, drivers may
choose to share rides, use public transportation, travel at less
congested times, or travel on less congested routes, if available.
Tolling also has the potential to provide new revenues, promote more
effective investment strategies, and better target spending for new and
expanded capacity. Tolling can also potentially leverage existing
revenue sources by increasing private-sector participation and
investment.
Over half of the states in the nation have or are planning toll roads
to respond to what officials describe as shortfalls in transportation
funding, to finance new highway capacity, and to manage road
congestion. While the number of states that are tolling or plan to toll
has grown since the completion of the Interstate Highway System, and
many states currently have major new capacity projects under way, many
states report no current plans to introduce tolling because the need
for new capacity does not exist, the approach would not generate
sufficient revenues, or they have made other choices.
According to state transportation officials who were interviewed as
part of GAO‘s nationwide review, substantive challenges exist to
implementing tolling. For example, securing public and political
support can prove difficult when the public and political leaders argue
that tolling is a form of double taxation, is unreasonable because
tolls do not usually cover the full costs of projects, and is unfair to
certain groups. Other challenges include obtaining sufficient statutory
authority to toll, adequately addressing the traffic diversion that
might result when motorists seek to avoid toll facilities, and
coordinating with other states or jurisdictions on tolling projects.
GAO‘s review of how states implement tolling suggests three strategies
that can help facilitate tolling. First, some states have developed
policies and laws that facilitate tolling. For example, Texas enacted
legislation that enables transportation officials to expand tolling in
the state and leverage tax dollars by allowing state highway funds to
be combined with other funds. Second, states that have successfully
advanced tolling projects have provided strong leadership to advocate
and build support for specific projects. In Minnesota, a task force was
convened to explore tolling and ultimately supported and recommended a
tolling project. Finally, tolling approaches that provided tangible
benefits appear to be more likely to be accepted than projects that
offer no new tangible benefits or choice to users. For example, in
California, toll prices on the Interstate 15 toll facility are set to
keep traffic flowing freely in the toll lanes.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-554].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact JayEtta Z. Hecker at
(202)512-2834 or heckerj@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Tolling Has Promise as an Approach for Enhancing Mobility and for
Financing Transportation:
States' Use of Tolling to Address Funding Shortfalls, Finance New
Capacity, and Manage Congestion Is Expanding;
but for Some States, Tolling Is Not Viewed as Feasible:
States That Are Considering and Implementing a Tolling Approach Face
Two Broad Types of Challenges:
Three Broad Strategies Can Help State Transportation Officials Address
Challenges to Tolling:
Concluding Observations:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Correlation Analysis:
Appendix III: Survey Questions:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Tolling-Related Programs Authorized in Surface Transportation
Legislation:
Table 2: Questions That Can Be Considered When Planning and Designing
Toll Projects:
Table 3: Results of Correlation Analysis:
Figures:
Figure 1: State Highway Revenue Sources, Fiscal Year 2004:
Figure 2: Annual Delay per Traveler in Selected Urban Areas, 1982,
1993, and 2003:
Figure 3: Combined Federal and Average State Motor Fuel Tax Rates:
Figure 4: Existing Toll Road Facilities:
Figure 5: Planned Toll Road Facilities:
Figure 6: Conceptual Drawing of the Trans Texas Corridor:
Figure 7: California State Route 91 Express Lanes and Toll Rates:
Figure 8: Challenges to Tolling:
Figure 9: Challenges to Tolling:
Figure 10: Challenges to Tolling:
Figure 11: Strategies to Address Challenges to Tolling:
Figure 12: Strategies to Address Challenges to Tolling:
Figure 13: Strategies to Address Challenges to Tolling:
Figure 14: Strategies to Address Challenges to Tolling:
Abbreviations:
BEA: Bureau of Economic Analysis:
EIS: environmental impact statement:
FHWA: Federal Highway Administration:
GDP: gross domestic product:
HOT: high occupancy toll:
HOV: high occupancy vehicle:
ISTEA: Intermodal Surface Transportation Efficiency Act of 1991:
MPO: metropolitan planning organization:
PPP: public-private partnership:
PPTA: Public-Private Transportation Act of 1995:
ROD: Record of Decision:
SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users:
SEP-15: Special Experimental Projects 15:
State DOT: State Department of Transportation:
TEA-21: 1998 Transportation Equity Act for the 21ST Century:
TIFIA: Transportation Infrastructure Finance and Innovation Act of
1998:
TOT: truck-only toll:
TTC: Trans Texas Corridor:
U.S. DOT: U.S. Department of Transportation:
VMT: vehicle miles traveled:
June 28, 2006:
The Honorable James M. Inhofe:
Chairman:
Committee on Environment and Public Works:
United States Senate:
The Honorable Christopher S. "Kit" Bond:
Chairman:
Subcommittee on Transportation and Infrastructure:
Committee on Environment and Public Works:
United States Senate:
The nation's highways are critical to providing for and enhancing
mobility--the free flow of passengers and goods--and to sustaining
America's economic growth. Mobility gives people access to goods,
services, recreation, and jobs; gives businesses access to materials,
markets, and people; and promotes the movement of personnel and
materiel to meet national defense needs. During the twentieth century,
motor fuel taxes were the mainstay of highway financing, and during the
latter part of that century the construction of the 47,000 mile
Interstate Highway System dominated the agendas and activities of state
and federal highway decision makers. In the twenty-first century, state
and local transportation officials are on the front lines of
transportation decision making and face a new and daunting set of
challenges. Congestion is increasing rapidly across the nation,
particularly in urban areas, and freight traffic is expected to almost
double in 20 years. In many places, decision makers cannot simply build
their way out of congestion, and traditional revenue sources may not be
sustainable. As the baby boom generation retires and the costs of
federal entitlement programs rise, sustained, large-scale increases in
federal highway grants seem unlikely. To provide the robust growth that
many transportation advocates believe is required to meet the nation's
mobility needs, state and local decision makers in virtually all states
are seeking alternative funding approaches. Tolling (i.e., charging a
fee for the use of a highway) provides a set of approaches that are
increasingly receiving closer attention and consideration.
As requested, this report provides information on states' experiences
with tolling and provides some insights on issues that state
transportation officials have encountered when considering or
implementing a tolling approach. Specifically, this report examines (1)
the promise of tolling to enhance mobility and finance highway
transportation, (2) the extent to which tolling is being used in the
United States and the reasons states are using or not using this
approach, (3) the challenges states face in implementing tolling, and
(4) strategies that can be used to help states address the challenges
to tolling.
To fulfill our objectives, we reviewed and analyzed research reports
and analytical studies; interviewed a wide range of stakeholders,
including state and local transportation officials, project sponsors,
and private-sector representatives; conducted a nationwide survey of
state departments of transportation; and conducted semistructured
interviews with state department of transportation officials. We also
performed a correlation analysis to identify the extent to which state
financial and demographic characteristics are associated with states'
use of tolling. In addition, we interviewed transportation stakeholders
in six states that were either planning toll projects or constructing
toll projects. In addition to our survey and semistructured interviews,
states planning toll roads were identified through an analysis of
states' participation in Federal Highway Administration (FHWA) tolling
programs, including the Interstate System Reconstruction and
Rehabilitation Pilot Program and the Value Pricing Pilot, and states
constructing toll roads were identified through an analysis of relevant
reports and studies. During our review, we determined that a number of
states with toll bridges or tunnels do not have or are not considering
the tolling of roads. We, therefore, decided to exclude toll bridges
and tunnels from our definition of states tolling or planning to toll
to more accurately report on the challenges to tolling. Although we
discuss the federal role with regard to states' experience with
tolling, we did not assess the effectiveness of federal toll programs
or the potential effects of federal grant programs on states'
experience with the approach. (See app. I for our objectives, scope,
and methodology.) We performed our work from June 2005 through June
2006 in accordance with generally accepted government auditing
standards.
Results in Brief:
Tolling has promise as an approach to enhance mobility and finance
transportation. A tolling approach can potentially help enhance
mobility by managing congestion. Congestion impedes both passenger and
freight mobility and is increasing as a result of rapid population
growth and more vehicles traveling farther on our roads. Applying tolls
that vary with the level of congestion--congestion pricing--can
potentially reduce congestion and the demand for roads because tolls
that vary according to the level of congestion can be used to maintain
a predetermined level of service. Such tolls create additional
incentives for drivers to avoid driving alone in congested conditions
when making driving decisions. In response, drivers may choose to share
rides, use public transportation, travel at less congested (generally
off-peak) times, or travel on less congested routes, if available, to
reduce their toll payments. For example, a study of the State Route 91
Express Lanes in California found that when tolls increased 50 percent
during peak hours, traffic during those hours dropped by about one-
third. As concerns about the sustainability of traditional financing
sources continue to grow, tolling also has promise to improve
investments and raise revenue. The per-gallon fuel tax, the mainstay of
transportation finance for 80 years, is declining in purchasing power
because fuel tax rates are not increasing, and more fuel-efficient
vehicles and alternative-fueled vehicles undermine the long-term
viability of fuel taxes as the basis for financing transportation. In
this environment, tolling potentially has promise to promote more
effective infrastructure investment strategies by better targeting
spending for new and expanded capacity. For example, among other
factors, toll project construction is typically financed by bonds, and
projects must pass the test of market viability and meet goals demanded
by investors, although even with this test, there is no guarantee that
projects will always be viable. Tolling can also potentially enhance
private-sector participation and investment in major highway projects.
Tolling's promise is particularly important in light of long-term
pressures on the federal budget.
According to our survey of state transportation officials, 31 of the 50
states and the District of Columbia have or are planning toll roads,
including 24 states that are operating toll roads and 7 states that are
planning to toll. Tolling grew in the 1940s and 1950s and, after a
period of slower growth, states' tolling again began to expand in the
1990s. In total, 23 states are in some phase of planning new toll
roads. Officials in the 31 states that have toll roads or are planning
toll roads indicated that their primary reasons for using or
considering the use of a tolling approach was to address transportation
funding shortfalls, finance new capacity, and manage congestion. For
example, in Texas, tolling is being used to finance major new capacity
projects, such as the Trans Texas Corridor (TTC)--a proposed multiuse,
statewide network of transportation routes that will incorporate
existing and new highways--and to manage congestion in Houston and
other metropolitan areas. Transportation officials in some states,
however, have told us that tolling is not feasible because of limited
need for new capacity, insufficient tolling revenues, and public and
political opposition to tolling. For example, officials from nearly
every state that is not pursuing tolling mentioned some form of public
or political opposition to toll roads. In New Jersey, officials told us
that opposition to new toll roads is strong because many state border
crossings and major highways are already tolled.
State transportation officials face two types of challenges that are
broadly related to securing support for and implementing a tolling
approach to finance transportation. The first type of challenge,
according to transportation officials, is the difficulty of obtaining
public and political support in the face of opposition from the public
and political leaders in states where tolling is being considered and
applied. According to transportation officials with whom we spoke,
opposition is largely based on arguments that (1) fuel taxes and other
dedicated funding sources are used to pay for roads and tolling is,
therefore, a form of double taxation; (2) a tolling approach is
unreasonable because tolls often do not cover the costs of a project;
and (3) applying tolls can produce regional, income, and other
inequities. For example, a Wisconsin transportation official told us
that Wisconsin is not implementing a tolling approach because the
public generally believes that fuel taxes already pay for roads and
tolls would adversely affect the state's tourist economy, while
Kentucky and Arkansas officials said that it would be difficult to
undertake tolling unless toll roads could be largely financially self-
sufficient. In Florida, concerns about regional inequity led local
governments to pass a law that led to the state's taking action to
ensure that spending on facilities in three counties was commensurate
with toll collections in those three counties. The second type of
challenge is the practical difficulty of implementing tolling,
including obtaining the statutory authority to toll, addressing the
traffic diversion that might result when motorists seek to avoid toll
facilities, and coordinating with other states or jurisdictions. For
example, Minnesota had legislation authorizing tolling, but conditions
built into the legislation, most importantly, local government veto
authority that could be exercised without recourse, prevented
transportation officials from implementing a specific project. As a
result, when state decision makers identified a toll project that would
convert underused high occupancy vehicle (HOV) lanes to high occupancy
toll (HOT) lanes that would allow non-HOV's to use the lanes for a fee-
-the Interstate 394 optional toll lane project--state decision makers
pursued specific legislation that exempted HOV to HOT lane conversions
from local veto, thus providing an opportunity to advance the
Interstate 394 optional toll lane project several years later.
Through our review of the ways states use tolling, we have identified
three broad strategies that have both short-term and long-term
relevance for state transportation officials who are considering
tolling. The first strategy that transportation officials can consider
involves developing policies and laws that facilitate the use of
tolling to finance transportation. In developing such a framework,
transportation officials can, first, build support for the approach by
establishing a rationale for its use and then secure the legislative
authority to use the approach. For example, to expand the use of
tolling and to leverage tax dollars by allowing state highway funds to
be combined with other funds, Texas enacted legislation that enabled
transportation officials to realize these goals. The second strategy
that transportation officials can consider involves providing
leadership to build support for individual projects and addressing the
challenges to tolling in project design. For example, in Minnesota, a
task force of state and local officials, citizens, and business leaders
was convened in 2001 to explore a range of road pricing options,
including the conversion of HOV lanes to HOT lanes, and make
recommendations to elected officials. Since tolling had been fairly
controversial in the past, decision makers believed that a task force
would provide a more credible and independent voice to the general
public. Ultimately, the task force supported the HOV to HOT conversions
and, with the governor's support and the passage of legislation
authorizing the conversion, the project was implemented. The last
strategy that transportation officials can consider involves selecting
a tolling approach and a project that provides tangible benefits.
Promoting a project that provides tangible benefits can potentially
help transportation officials justify both the costs of the project and
the fees that users will be required to pay for the service. Although
tolling can take different forms and decisions about its use are state
specific, in concept, a tolling structure that varies with the level of
congestion--congestion pricing--offers increased predictability and, as
a result, provides tangible benefits to users. While actual experience
with congestion pricing is still fairly limited in the United States,
projects in operation illustrate how transportation officials have
advanced projects seeking to achieve the potential benefits that may
result from congestion pricing. For example, toll prices on Interstate
15 in San Diego are set dynamically, changing every 6 minutes, which
has succeeded in keeping traffic flowing freely.
The U.S. Department of Transportation reviewed a draft of this report.
Officials from the Department indicated that they generally agreed with
the information provided and provided technical clarifications, which
we incorporated as appropriate.
Background:
The responsibility for building and maintaining highways in the United
States rests with state departments of transportation in each of the 50
states, the District of Columbia, and Puerto Rico. In addition, local
governments finance road construction through sources such as property
and sales taxes. In 2004, state governments took in about $104 billion
from various sources to finance their highway capital and maintenance
programs--44 percent of these revenues came from state fuel taxes and
other state user fees, and 28 percent came from federal grants. Sources
of state highway revenues in 2004 are shown in figure 1.
Figure 1: State Highway Revenue Sources, Fiscal Year 2004:
[See PDF for image]
Source: FHWA.
[End of figure]
FHWA administers federal grant funds through the federal-aid highway
program and distributes highway funds to the states through annual
apportionments established by statutory formulas. Once FHWA apportions
these funds, they are available to be obligated for the construction,
reconstruction, and improvement of highways and bridges on eligible
federal-aid highway routes and for other purposes authorized in law.
Within these parameters, responsibility for planning and selecting
projects generally rests with state departments of transportation (DOT)
and with metropolitan planning organizations, and these states and
planning organizations have considerable discretion in selecting
specific highway projects that will receive federal funds. For example,
section 145 of title 23 of the United States Code describes the federal-
aid highway program as a federally assisted state program and provides
that the federal authorization of funds, as well as the availability of
federal funds for expenditure, shall not infringe on the states'
sovereign right to determine the projects to be federally financed.
About 5 percent of the highway revenues to the states in 2004 came from
tolls. In 2005, the United States had about 5,000 miles of toll
facilities in operation or under construction, including about 2,800
miles, or 6 percent, of the Interstate Highway System, according to
FHWA.[Footnote 1] Tolling of roads began in the late 1700s. From 1792
through 1845, an estimated 1,562 privately owned turnpike companies
managed and charged tolls on about 15,000 miles of turnpikes throughout
the country.[Footnote 2] Between 1916 and 1921, the number of
automobiles in the United States almost tripled, from 3.5 million to 9
million, and as automobile use increased, pressure grew for more
government involvement in financing the construction and maintenance of
public roads.[Footnote 3] In 1919, Oregon became the first state to
impose a motor fuel tax to finance roadway construction.[Footnote 4] In
1916, the Federal Aid Road Act provided states with federal funds to
finance up to 50 percent of the cost of roads and bridges constructed
to provide mail service. This act and its successor, the 1922 Federal
Highway Act, prohibited tolling on roads financed with federal funds.
In the 1930s and 1940s, President Roosevelt led the thinking for
developing a series of interconnected systems of toll roads that
crossed the United States, which was the beginning of the idea of an
interstate highway system. Then, between 1940 and 1952, 5 states opened
such highways, which they financed through tolls.[Footnote 5] The first
of these highways, the Pennsylvania Turnpike, was completed in 1940.
During this time, about 30 states considered building toll roads, given
the success of Pennsylvania. In 1943, Congress passed an amendment to
the Federal Highway Act, directing the Commissioner of Public Roads to
conduct a survey for an express highway system and report the results
to the President and Congress. However, there was no determination as
to how such a system would be funded. President Eisenhower supported a
toll system financed with bonds to be paid back with toll revenues
until the bonds were paid off, at which time the tolls would be
removed. A committee appointed by President Eisenhower also recommended
a highway program financed with bonds, but proposed that federal fuel
tax revenues, instead of tolls, be used to pay back the bonds.
Ultimately, the Federal-Aid Highway Act of 1956 authorized the creation
of a Highway Trust Fund to collect federal fuel tax revenues and
finance the construction of the Interstate Highway System on a pay-as-
you-go basis. The act prohibited tolling on interstate highways and all
federally assisted highways; as a consequence, states built few new
toll roads while the Interstate Highway System was under construction.
However, many of the toll roads built before 1956 were eventually
incorporated into the Interstate Highway System, and tolling on these
roads was allowed to continue. Tolling was also allowed, on a case-by-
case basis under very specific conditions and with a limited federal
funding share, for interstate bridges and tunnels.
During the 1990s, as interstate construction wound down, states again
began considering and implementing tolling. At the same time, some of
the federal restrictions on the use of federal funds for tolling began
to ease. The Intermodal Surface Transportation Efficiency Act of 1991
(ISTEA) liberalized some of the long-standing federal restrictions on
tolling by permitting tolling for the construction, reconstruction, or
rehabilitation of federally assisted non-Interstate roadways and by
raising the federal share on interstate bridges and tunnels to equal
the share provided for other federal-aid highway projects. The 1998
Transportation Equity Act for the 21st Century (TEA-21) established a
new pilot program to allow the conversion of a free interstate highway,
bridge, or tunnel to a toll facility if needed reconstruction or
rehabilitation was possible only with the collection of tolls.[Footnote
6] The Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU), enacted in 2005, continued all of
the previously established toll programs and added new programs. The
federal tolling-related programs that have been authorized in surface
transportation legislation are shown in table 1.
Table 1: Tolling-Related Programs Authorized in Surface Transportation
Legislation:
Program: Value Pricing Pilot Program;
Purpose: Authorized in ISTEA in 1991, this program is a pilot program
for local transportation programs to determine the potential of
different value pricing approaches to manage congestion, including
projects that would use tolls on highway facilities.
Program: Interstate System Reconstruction and Rehabilitation Toll Pilot
Program;
Purpose: Authorized in TEA-21 in 1998, this program allows tolls on
three pilot projects in different states to reconstruct an existing
interstate facility.
Program: Express Lanes Demonstration Program;
Purpose: Authorized in SAFETEA-LU in 2005, this program allows 15
demonstration projects to use tolling on interstate highways to manage
high congestion levels, reduce emissions to meet specific Clean Air Act
requirements, or finance additional Interstate lanes to reduce
congestion.
Program: High Occupancy Vehicle (HOV) Facilities;
Purpose: Authorized in SAFETEA-LU in 2005, this program permits states
to charge tolls to vehicles that do not meet occupancy requirements to
use an HOV lane even if the lane is on an interstate facility.
Program: Interstate System Construction Toll Pilot Program;
Purpose: Authorized in SAFETEA-LU in 2005, this program permits tolls
on three pilot projects by a state or compact of states to construct
new interstate system highways.
Program: Section 129 of title 23, United States Code;
Purpose: Section 129 authorizes federal participation in specific toll
activities that are otherwise generally prohibited under Section 301,
also from title 23.
Source: FHWA.
[End of table]
SAFETEA-LU also created a National Surface Transportation
Infrastructure Financing Commission to consider revenue sources
available to all levels of government, particularly Highway Trust Fund
revenues, and to consider new approaches to generating revenues for
financing highways. The commission's objective is to develop a report
recommending policies to achieve revenues for the Highway Trust Fund
that will meet future needs. The commission is required to produce a
final report within 2 years of its first meeting.
In addition to SAFETEA-LU's new tolling provisions and enhancements to
existing programs, FHWA offers an innovative credit assistance program,
which can be used to develop toll roads, and an experimental program,
which can be used to test innovative toll road development procedures.
The Transportation Infrastructure Finance and Innovation Act of 1998
(TIFIA) permits FHWA to offer three kinds of credit assistance for
nationally or regionally significant surface transportation projects:
direct loans, loan guarantees, and lines of credit. Because TIFIA
provides credit assistance rather than grants, states are likely to use
it for infrastructure projects that can generate their own revenues
through user charges, such as tolls or other dedicated funding sources.
TIFIA credit assistance is aimed at advancing the completion of large,
capital intensive projects--such as toll roads--that otherwise might be
delayed or not built at all because of their size and complexity and
the financial market's uncertainty over the timing of revenues from a
project. The main goal of TIFIA is to leverage federal funds by
attracting substantial private and other nonfederal investment in
projects. FHWA has also encouraged experimental projects through the
Special Experimental Projects 15 (SEP-15) program, which is intended to
encourage the formation of public-private partnerships for projects by
providing additional flexibility for states interested in experimenting
with innovative ways to develop projects, according to FHWA officials.
SEP-15 allows innovation and flexibility in contracting, compliance
with environmental requirements, right-of-way acquisition, and project
finance.
In addition, the Department of Transportation's Office of
Transportation Policy is proposing a pilot program--the Open Roads
Pilot Program--to explore alternatives to the motor fuel tax. Under
this pilot, the Office of Transportation Policy is proposing to make
funds available to up to five states to demonstrate on a large scale
the viability and effectiveness of financing alternatives to the motor
fuel tax. Goals of the program would be to: (1) demonstrate whether or
not there are viable alternatives to the motor fuel tax that will
provide necessary investment resources while simultaneously improving
system performance and reducing congestion, (2) identify successful
motor fuel tax substitutes that have widespread applicability to other
states, and (3) provide a possible framework for future federal
reauthorization proposals.
Tolling Has Promise as an Approach for Enhancing Mobility and for
Financing Transportation:
As congestion increases and concerns about the sustainability of
traditional roadway financing sources grow, tolling has promise as an
approach to enhance mobility and to finance transportation. Tolls that
are set to vary with the level of congestion can potentially lead to a
reduction in congestion and demand for roads. Such tolls can create
additional incentives for drivers to avoid driving alone in congested
conditions when making their driving decisions. In response, drivers
may choose to share rides, use public transportation, travel at less
congested (generally off-peak) times, or travel on less congested
routes, if available, to reduce their toll payments. Tolling is also
consistent with the important user pays principle, can potentially
better target spending for new and expanded capacity, and can
potentially enhance private-sector participation and investment in
major highway projects. Tolling's promise is particularly important in
light of long-term fiscal challenges and pressures on the federal
budget.
In the Face of Increasing Congestion, Tolling Holds Promise as an
Approach to Enhance Mobility:
Tolling can be used to potentially enhance mobility by managing
congestion, which is already substantial in many urban areas.
Congestion impedes both passenger and freight mobility and ultimately,
the nation's economic vitality, which depends in large part on an
efficient transportation system. Highway congestion for passenger and
commercial vehicles traveling during peak driving periods doubled from
1982 through 2000. According to the Texas Transportation Institute,
drivers in 85 urban areas experienced 3.7 billion hours of delay and
wasted 2.3 billion gallons of fuel in 2003 because of traffic
congestion.[Footnote 7] The Texas Transportation Institute estimated
that the cost of congestion was $63.1 billion (in 2003 dollars), a
fivefold increase over two decades after adjusting for inflation. On
average, drivers in urban areas lost 47 hours on the road in 2003,
nearly triple the delay travelers experienced on average in 1982.
During this same period, congestion grew in urban areas of every size;
however, very large metropolitan areas with populations of more than 3
million were most affected. (See fig. 2 for examples of congestion
growth in selected urban areas.) Freight traffic--which has doubled
since 1980 and in some locations constitutes 30 percent of interstate
system traffic--added to this congestion at a faster rate than
passenger traffic, and FHWA projects continued growth, estimating that
the volume of freight traffic on U.S. roads will increase 70 percent by
2020.
Figure 2: Annual Delay per Traveler in Selected Urban Areas, 1982,
1993, and 2003:
[See PDF for image]
Source: GAO analysis of Texas A&M University data.
[End of figure]
A number of factors, as follows, are converging to further exacerbate
highway congestion:
* Most population growth in the nation occurs in already congested
metropolitan areas. In 2000, the U.S. Census Bureau reported that 79
percent of 281 million U.S. residents lived in metropolitan areas.
Nationwide, the population is expected to increase by 54 million by
2020, and most of that growth is expected in metropolitan areas.
* Vehicle registrations are steadily increasing. In 2003, vehicle
registrations nationwide stood at 230 million, a 17 percent increase in
just 10 years.
* Road usage, as measured by vehicle miles traveled (VMT), grew at a
steady annual rate of 2.8 percent from 1980 through 2003. For the 10-
year period between 1994 and 2003, the total increase in VMT was 22
percent.
* Road construction has increased at a slower pace than population
growth, vehicle registrations, and road usage. For example, from 1980
to 2000, VMT increased by 80 percent while urban lane miles increased
37 percent.
In light of this increasing congestion, a tolling structure that
includes congestion pricing can potentially reduce congestion and the
demand for roads during peak hours. Through congestion pricing, tolls
can be set to vary during congested periods to maintain a predetermined
level of service. One potential effect of this pricing structure is
that the price that a driver pays for such a trip, including the toll,
may be equal to or close to the total cost of that trip, including the
external costs that drivers impose on others, such as increased travel
time, pollution, and noise.[Footnote 8] Such tolls create financial
incentives for drivers to consider these costs when making their
driving decisions. In response, drivers may choose to share rides, use
transit, travel at less congested (generally off-peak) times, or travel
on less congested routes to reduce their toll payments.[Footnote 9]
Such choices can potentially reduce congestion and the demand for road
space at peak periods, thus potentially allowing the capacity of
existing roadways to accommodate demand with fewer delays.
Actual experience with congestion pricing is still fairly limited in
the United States, with only five states operating such facilities and
six states planning facilities.[Footnote 10] Some results show that
where variable tolls are implemented, changes in toll prices affect
demand and, therefore, levels of congestion. For example, on State
Route 91 in California, the willingness of people to use the Express
Lanes has been shown to be directly related to the price of tolls. A
study by Cal Poly State University for the California DOT estimated
that a 10 percent increase in tolls would reduce traffic by 7 percent
to 7.5 percent, while a 100 percent increase in tolls would reduce
traffic by about 55 percent.[Footnote 11] By adjusting the price of
tolls, the flow of traffic can be maintained in the toll lanes so that
congestion remains at manageable levels. In the Minneapolis-St. Paul
area, a Minnesota DOT study of a proposed system of variable priced HOT
lanes called MnPASS estimated that, over time, average speeds and
vehicle mileage would increase, while vehicle hours traveled would
decrease.[Footnote 12] By 2010, with tolled express lanes and free HOV
lanes, the daily vehicle mileage on the entire system is projected to
be 3.6 million compared with 3.2 million if the highways are not
tolled. Average overall speed on the system is expected to be 47 mph
compared with 42.8 mph if the system is not implemented. Finally,
congestion pricing has been in use internationally as well. Canada,
Great Britain, Norway, Singapore, and South Korea all have roadways
that are tolled to manage demand and reduce congestion. For example, in
1996, South Korea implemented congestion tolls on two main tunnels.
Traffic volume decreased by 20 percent in the first 2 years of
operation, and average traffic speed increased by 10 kilometers per
hour.
Although congestion pricing was dismissed by some decision makers in
the past partly because motorists queuing at toll booths to pay tolls
created congestion and delays, advances in automated toll collection
have greatly reduced the cost and inconvenience of toll collection.
Today, nearly every major toll facility provides for electronic toll
collection, greatly reducing the cost and inconvenience of toll
collection. With electronic toll collection, toll fee collection for
using a facility can be done at near highway cruising speed because
cars do not have to stop at toll plazas. However, as we reported, there
are no widely accepted standards for electronic toll systems, which
could become a barrier to promoting the needed interoperability between
toll systems.[Footnote 13]
Tolling Holds Promise as an Approach to Finance Transportation
Projects:
Tolling holds promise to improve investment decisions and raise
revenues in the face of growing concerns about the sustainability of
traditional financing sources for surface transportation. For many
years, federal and state motor fuel taxes have been the mainstay of
state highway revenue. In the last few years, however, federal and
motor fuel tax rates have not kept up with inflation. Between 1995 and
2004, total highway revenues for states grew an average of 3.6 percent
per year, with average annual increases of 4.9 percent for federal
grants and 3 percent for revenues from state sources, according to FHWA
data. However, these increases were smaller than increases in the cost
of materials and labor for road construction and are not sufficient to
keep pace with the robust levels of growth in highway spending many
transportation advocates believe is needed.[Footnote 14] The federal
motor fuel tax rate of 18.4 cents per gallon has not been increased
since 1993, and thus the purchasing power of fuel tax revenues has been
steadily eroded by inflation. Although the Highway Trust Fund[Footnote
15] was reauthorized in 1998 and 2005, no serious consideration was
given to raising fuel tax rates. Most states faced a similar
degradation of the value of their state motor fuel tax revenues--
although 28 states raised their motor fuel tax rates between 1993 and
2003, only three states raised their rates enough to keep pace with
inflation. State gasoline tax rates range from 7.5 cents per gallon in
Georgia to 28.5 cents in Wisconsin. Seven states have motor fuel tax
rates that vary with the price of fuel or the inflation rate--including
one state that repealed the linkage of its fuel tax rate to the
inflation rate effective in 2007. Figure 3 shows the decline in the
purchasing power in real terms of revenues generated by federal and
state motor fuel tax rates since 1990.
Figure 3: Combined Federal and Average State Motor Fuel Tax Rates:
[See PDF for image]
Source: GAO analysis of DOT and FWHA data.
Note: Tax rates are in 2004 inflation-adjusted dollars. Totals for
1992, 1995, 1996, 2000, and 2003 are rounded. State average gas tax
rate is a "weighted average."
[End of figure]
Even if federal and state motor fuel tax rates were to keep pace with
inflation, the growing use of fuel-efficient vehicles and alternative-
fueled vehicles would, in the longer term, further diminish fuel tax
revenues. Although all highway motorists pay fuel taxes, those who
drive hybrid-powered or other alternative-fueled vehicles consume less
fuel per mile than those who drive gas-only vehicles. As a result,
these motorists pay less fuel tax per mile traveled. According to the
U.S. Energy Information Agency, hybrid vehicle sales grew twentyfold
between 2000 and 2005 and will grow to 1.5 million vehicles annually by
2025. In the past five years, hybrid vehicle sales grew in the United
States twentyfold, from 9,400 in 2000 to over 200,000 in 2005.
Moreover, the U.S. Energy Information Agency projects that hybrid
vehicle sales will grow to 1.5 million annually by 2025. Sales of
alternative-fueled vehicles, such as alcohol-flexible-fueled vehicles,
are projected to increase to 1.3 million in 2030, with electric and
fuel cell technologies projected to increase by 2030 as well.
As concerns about the sustainability of traditional roadway financing
sources grow, tolling can potentially target investment decisions by
adhering to the user pays-principle. National roadway policy has long
incorporated the user pays concept, under which the costs of building
and maintaining roadways are paid by roadway users, generally in the
form of excise taxes on motor fuels and other taxes on inputs into
driving, such as taxes on tires or fees for registering vehicles or
obtaining operator licenses. This method of financing is consistent
with one measure of equity that economists use in assessing the
financing of public goods and services, the benefit principle, which
measures equity according to the degree that readily identifiable
beneficiaries bear the cost. As a result, the user pays concept is
widely recognized as a critical anchor for transportation
policy.[Footnote 16]
Increasingly, however, decision makers have looked to other revenue
sources--such as income, property, and sales tax revenues--to finance
roads. Using these taxes results in some sacrifice of the benefit
principle because there is a much weaker link to the benefits of
roadway expenditures for those taxes than there is for fuel
taxes.[Footnote 17] Tolling, however, is more consistent with user pay
principles because tolling a particular road and using the toll
revenues collected to build and maintain that road more closely link
the costs with the distribution of the benefits that users derive from
it. Motor vehicle fuel taxes can provide a rough link between costs and
benefits but do not take into account the wide variation in costs
required to provide different types of facilities (i.e., roads,
bridges, tunnels, interchanges) some of which can be very costly.
Tolling can also potentially lead to more targeted, rational, and
efficient investment by state and local governments. Roadway investment
can be more efficient when it is financed by tolls because the users
who benefit will likely support additional investment to build new
capacity or enhance existing capacity only when they believe the
benefits exceed the costs. When costs are borne by nonusers, the
beneficiaries may demand that resources be invested beyond the
economically justifiable level. Tolling can also provide the potential
for more rational investment because, in contrast to most grant-
financed projects, toll project construction is typically financed by
bonds sold and backed by future toll revenues, and projects must pass
the test of market viability and meet goals demanded by investors.
However, even with this test there is no guarantee that projects will
always be viable.[Footnote 18]
A tolling structure that includes congestion pricing can also help
guide capital investment decisions for new facilities. As congestion
increases, tolls also increase and such increases (sometimes referred
to as "congestion surcharges") signal increased demand for physical
capacity, indicating where capital investments to increase capacity
would be most valuable. At the same time, congestion surcharges would
provide a ready source of revenue for local, state, and federal
governments, as well as for transportation facility operators in order
to help fund these investments in new capacity that, in turn, can
reduce delays. Over time, this form of pricing can potentially
influence land-use plans and the prevalence of telecommuting and
flexible workplaces, particularly in heavily congested corridors where
external costs are substantial and congestion surcharges would be
relatively high.
Tolling can also be used as a tool for leveraging increased private-
sector participation and investment. In March 2004, we reported that
three states--California, Virginia, and South Carolina--had pursued
private-sector investment and participation in major highway projects.
Since that time, Virginia has pursued additional projects, and Texas
has contracted with a private entity to participate and invest in a
major highway project.[Footnote 19] Tolling can be used to enhance
private participation because it provides a mechanism for the private
sector to earn the return on investment it requires to participate.
Involving the private sector allows state and local governments to
build projects sooner, conserve public funding from highway capital
improvement programs for other projects, and limit their exposure to
the risks associated with acquiring debt.[Footnote 20]
In the Long Term, Tolling Holds Promise for Addressing the
Transportation Challenges Ahead:
Federal and state policymakers have begun looking toward future options
for long-term highway financing. For example, SAFETEA-LU established
the National Surface Transportation Infrastructure Financing Commission
to study prospective Highway Trust Fund revenues and assess alternative
approaches to generating revenues for the Fund. SAFETEA-LU also
authorized a study, to be performed by the Public Policy Center of the
University of Iowa, to test an approach to assessing highway use fees
based on actual mileage driven. This approach would use an onboard
computer to measure the miles driven by a specific vehicle on specific
types of highways. A few states have also begun looking toward the long-
term financing options. Oregon, the first state to enact a motor fuel
tax, is sponsoring a study on the technical feasibility of replacing
the gas tax with a per-mile fee. During 2006, volunteers will have
onboard mileage-counting equipment added to their vehicles and will,
for one year, pay a road user fee equal to 1.2 cents a mile instead of
paying the state's motor fuel tax.
But beyond the questions of financing and financing sources, broader
issues and challenges exist. As the baby boom generation ages,
mandatory federal commitments to health and retirement programs will
consume an ever-increasing share of the nation's gross domestic product
(GDP) and federal budgetary resources, placing severe pressures on all
discretionary programs, including those that fund defense, education,
and transportation. Our simulations show that by 2040, revenues to the
federal government might barely cover interest on the debt--leaving no
money for either mandatory or discretionary programs--and that
balancing the budget could require cutting federal spending by as much
as 60 percent, raising taxes by up to 2 ½ times their current level, or
some combination of the two. As we have reported, this pending fiscal
crisis requires a fundamental reexamination of all federal programs,
including those for highways. This reexamination should raise questions
such as whether a federal role is still needed, whether program funding
can be better linked to performance, and whether program constructs are
ultimately sustainable. It is in this context that tolling has promise
for addressing the challenges ahead. In particular, we have suggested
that a reexamination of the federal role in highways should include
asking whether the federal government should even continue to provide
financing through grants or whether, instead, it should develop and
expand alternative mechanisms that would better promote efficient
investments in, and use of, infrastructure and better capture revenue
from users.
States' Use of Tolling to Address Funding Shortfalls, Finance New
Capacity, and Manage Congestion Is Expanding;
but for Some States, Tolling Is Not Viewed as Feasible:
According to our survey of state transportation officials, there are
toll road facilities in 24 states and plans to build toll road
facilities in 7 other states. Tolling grew in the 1940s and 1950s, but
after a period of slower growth, states' tolling began to expand again
in the 1990s. The 5 states that began tolling after 1990 are currently
planning additional toll roads. Officials in states that have toll
roads or are planning toll roads indicated that their primary reasons
for using or considering the use of a tolling approach were to address
transportation shortfalls, finance new capacity, and manage congestion.
Transportation officials in some states, however, told us that tolling
is not now seen as feasible because there is little need for new tolled
capacity, tolling revenues would be insufficient, and they would face
public and political opposition to tolling.
Nearly Half of the States Have Operating Toll Roads, and More States
Are Planning Toll Roads:
Currently, there are toll road facilities in 24 states throughout the
United States, and there are plans to build toll road facilities in 7
additional states. Figure 4 shows the states that have at least one
existing toll road, according to our survey of transportation officials
from all 50 states and the District of Columbia and our review of FHWA
toll-related programs. (See app. III for the survey questions.)
Figure 4: Existing Toll Road Facilities:
[See PDF for image]
Source: GAO.
[End of figure]
Tolling grew in the 1950s, slowed for several decades, and again began
to expand rapidly in the 1990s. Five states--California, Colorado,
Minnesota, South Carolina, and Utah--opened their first toll roads from
1990 to 2006 and, according to our survey of state transportation
officials, all five are currently planning, or in some stage of
building, at least one new toll road. Large states that have recently
built toll roads, such as California, Florida, and Texas, are also
moving ahead with plans to build and expand systems of tolls. In Texas,
for example, the DOT's Turnpike Authority Division is developing a
proposed multiuse, statewide network of transportation routes that will
incorporate existing and new highways called the TTC,[Footnote 21]
while three other regional toll authorities[Footnote 22] in Austin,
Dallas, and Houston are also planning toll roads. In California, a
state legislative initiative in 1989 led to the development of toll
roads in Orange County, including the State Route 91 Express Lanes and
State Route 125 in San Diego. And in Florida, the DOT-run Florida
Turnpike Enterprise operates nine tolled facilities that include almost
500 miles of toll roads and is studying the feasibility of implementing
tolling to manage congestion on other facilities, including Interstate
95 in Miami-Dade County.
According to our survey of state transportation officials and our
review of state applications to FHWA tolling pilot programs, a total of
23 states have plans to build toll road facilities.[Footnote 23] (Fig.
5 summarizes the status of states' plans for highway tolling.) Eleven
of these states have received the required environmental clearances and
have projects that are under design or in construction. The remaining
12 states do not have projects that have proceeded this far, but do
have plans to build toll road facilities, according to their respective
state transportation officials. Of these 23 states,
* 16 have existing toll roads and are planning additional toll
roads,[Footnote 24] and:
* 7 are planning their first toll roads.[Footnote 25]
Figure 5: Planned Toll Road Facilities:
[See PDF for image]
Source: GAO.
[End of figure]
Some States Use Tolling to Address Funding Shortfalls, Finance New
Capacity, and Manage Congestion; Other States Find Tolling Not Feasible
or Have Made Other Choices:
Officials in most states planning toll roads indicated that the primary
reasons for considering a tolling approach were to address what state
officials characterized as transportation funding shortfalls, to
finance and build new capacity, and to manage congestion. States that
are not planning to build toll roads have found that tolling is not
feasible or have made other choices.
States Use Tolling to Address Transportation Funding Shortfalls:
Transportation officials indicated that one of the primary reasons for
using or considering a tolling approach was to respond to what the
officials described as shortfalls in transportation funding. In
Georgia, for example, an official told us that tolling has become a
strategy because there is a significant gap in transportation funding,
and the motor fuel tax rate is the lowest in the country, 7.5 cents per
gallon. In North Carolina, where the North Carolina Turnpike Authority
was established in 2002, an official told us that traditional funding
is not adequate to address transportation needs. North Carolina has
estimated that, over the next 25 years, it will need $85 billion in new
transportation projects to accommodate the state's growth. With a
projected shortfall of $30 billion and what the official described as a
lack of political will to increase motor fuel tax rates, the state has
adopted tolling as one strategy to address transportation needs. In
Utah, state transportation officials have estimated a $16.5 billion
shortfall through 2030 in funding for highway projects and are
considering tolling, along with other funding alternatives. Finally, an
official told us that, in spite of a motor fuel tax rate increase in
2003 and a $200 million bonding program, Indiana has a 10-year, $2.8
billion shortfall in highway funding and is viewing tolling as one
financing tool to close the gap. The Indiana DOT has operated the
Interstate 80/Interstate 90 Indiana Toll Road for 50 years and would
like to apply that experience in operating toll roads to new roads.
In other states, transportation officials conducted financial
assessments on specific highway projects and determined that, to
complete the projects, tolling would be required as a source of
revenue. For example, in Missouri, a funding analysis performed by the
Missouri DOT found that the estimated construction costs for the
Interstate 70 reconstruction exceed the available federal, state, and
local funding sources, and the project cannot be advanced without
tolling or other revenue increases. Missouri DOT estimates that the
Interstate 70 reconstruction project will cost between $2.7 and $3.2
billion and that, with a current funding shortfall of $1 billion to $2
billion annually, tolling is being actively considered to close that
gap.[Footnote 26] Likewise, studies by the Texas DOT determined that
tolling would be required on particular highway projects. For example,
reconstructing a 23-mile portion of Interstate 10 near Houston was
estimated to cost $1.99 billion. Available federal, state, and local
funds amounted to $1.75 billion, a shortfall of $305.2 million. The
Harris County Toll Road Authority invested $238 million for the right
to operate tolled lanes within the facility. In addition, the Texas
Transportation Commission, which oversees the state DOT, ordered that
all new controlled-access highways should be considered as potential
toll projects that will undergo toll feasibility studies. The
commission views tolling as a tool that can help stretch limited state
highway dollars further so that transportation needs can be met.
Moreover, states are looking for whatever financial relief tolling can
provide. In some states, tolling is being considered, even though toll
revenues are expected to only partially cover the costs of particular
projects. In Mississippi, for example, the state DOT indicated that
tolling may be advanced if toll revenues cover 25 percent to 50 percent
of a facility's cost. In Arkansas, tolling is being considered if toll
revenues fund as little as 20 percent of the initial construction
costs, provided tolls pay for operations and maintenance.
To identify state characteristics that are linked with state decisions
to toll, we performed a correlation analysis to examine the
relationship between those decisions and various state demographic and
financial characteristics. Although certain characteristics in a
state's finances and tax policies might be related to financial need,
our correlation analysis found only limited relationships between
various state financial and demographic measures and states' decisions
to toll or not to toll. For example, although we found a slight inverse
relationship between a state's decision to toll and the level of its
motor fuel taxes, this relationship is not strong enough to conclude
that states planning toll roads are more likely to be the ones with
lower motor fuel tax rates than other states. However, we found that
both the size of the state, whether measured by population or by VMT,
and whether it is growing rapidly, again measured by population or VMT
growth, are directly related to states' decisions to toll. (For more
information on the results of our correlation analysis, see app. II.)
States Use Tolling to Finance New Capacity:
According to transportation officials, states are using or considering
a tolling approach to finance new capacity that cannot otherwise be
funded under current and projected transportation funding scenarios.
Such new capacity may be in the form of new highways or new lanes on
existing highways. For example, in Colorado, the state DOT is studying
the investment of $3 billion in increased highway capacity, with 10
percent, or $300 million of the investment, coming from federal, state,
and local governments and the remainder coming from tolls. With a $48
billion shortfall projected through 2030 and the percentage of
congested lane-miles projected to increase by 161 percent, tolling is
being considered. Projections by the state DOT in Colorado suggest that
revenues are sufficient to allow for only spot improvements on a few
transportation corridors over the next 25 years and, without tolling,
none can undergo a major upgrade, and new capacity cannot be added.
Some states are using tolling to supplement their traditional motor
fuel tax transportation funding through private-sector involvement and
investment. Tolling is being used as a means to gain access to private
equity and to shift the investment risk, in part, to the private
sector. Currently, 18 states have some form of public-private
partnership (PPP) legislation, allowing for innovative contracting with
the private sector. Many of the 18 states have PPP programs that were
established to allow for toll concession agreements to finance highway
projects. For example, Oregon and Texas are specifically looking to
attract private investment as a new source of financing. The TTC, as
shown in figure 6,[Footnote 27] is being financed, in part, through a
series of PPPs. The Texas DOT has contracted with Cintra-Zachry to
develop a long-term development plan for the corridor, which includes
the potential to construct and operate the first 316-mile portion of
TTC 35, from Dallas to San Antonio. Cintra-Zachry has pledged an
investment of $6 billion and a payment of $1.2 billion for the right to
build, operate, and collect tolls for up to 50 years on the initial
segment of TTC 35. In Oregon, the Office of Innovative Partnerships and
Alternative Funding--an Oregon DOT office empowered to pursue
alternative funding, including private investment through tolling--has
received proposals from the Oregon Transportation Improvement Group, a
consortium led by the Macquarie Infrastructure Group, to complete two
tolled facilities in the Portland area. In both Texas and Oregon, the
projects were approved under SEP-15, which enabled the two states to
waive certain federal requirements and to negotiate with the project
developers before awarding contracts. Acceptance of the projects under
SEP-15 does not commit federal-aid funding for the projects, and FHWA
retains the right to declare the project ineligible for federal-aid
funds at any time during the SEP-15 process until there is formal FHWA
project approval.
Figure 6: Conceptual Drawing of the Trans Texas Corridor:
[See PDF for image]
Source: Texas Department of Transportation.
[End of figure]
Growing freight traffic is also prompting some states to consider using
tolls to pay for capacity enhancement. Examples include Interstate 81
in Virginia and Interstate 70 in Missouri. According to the original
design of Interstate 81, built beginning in 1957, truck traffic would
account for 15 percent of traffic on the highway;
truck traffic now accounts for up to 35 percent, and traffic levels are
expected to double by 2035. Interstate 70, originally designed to carry
up to 14,000 vehicles per day in rural areas, now carries up to 58,000
per day, and truck traffic, which was intended to be 10 percent of
total traffic, is now 25 percent. Both interstates are major freight
routes where truck traffic is expected to continue to increase. In
2003, the Virginia DOT received FHWA conditional provisional approval
under the Interstate System Reconstruction and Rehabilitation Pilot
Program to toll vehicles other than cars and pickup trucks (freight
trucks and buses) on Interstate 81. Likewise, for Interstate 70, the
Missouri DOT received conditional provisional approval in July 2005 to
participate in the same pilot program. In certain cases, proposals for
truck-only toll (TOT) lanes seek to manage congestion while increasing
capacity by diverting trucks from passenger routes to dedicated lanes.
TOT lanes are being considered on heavy freight routes, including
Interstate 81 in Virginia, TTC in Texas (see fig. 7), and routes
throughout the Atlanta Metropolitan Region in Georgia.
States Use Tolling to Manage Congestion:
While growing congestion and traffic volumes have increased the demand
for additional highway capacity, transportation officials told us that
tolling is being considered as a tool to manage congestion. Applying
tolls that vary with the level of congestion--congestion pricing--can
reduce congestion and the demand for roads because tolls that vary
according to the level of congestion can be used to maintain a
predetermined level of service. Such tolls create additional incentives
for drivers to avoid driving alone in congested conditions when making
driving decisions. In response, drivers may choose to share rides, use
public transportation, travel at less congested (generally off-peak)
times, or travel on less congested routes, if available, to reduce
their toll payments.
Tolling for congestion management can take the form of HOT lanes, which
are adjacent to nontolled lanes. HOT lanes are used to manage
congestion by creating a tolling structure that varies toll prices
according to the level of congestion. Such a tolling structure can
reflect the external costs that users of the facility impose on others.
In some cases, HOV lanes that had been underused have been converted to
HOT lanes, allowing HOVs to continue to use the lane as an HOV lane but
allowing single-occupancy vehicles to use the lane provided they are
willing to pay a toll. In 5 of the 23 states planning toll roads,
efforts to manage congestion on existing capacity is prompting tolling.
California, Colorado, Texas, Virginia, and Washington all have HOT lane
projects planned that will use variably priced tolls to alleviate
congestion by managing the level of traffic. All of these states have
received grants under FHWA's Value Pricing Pilot to either develop or
implement the projects. In California, the State Route 91 Express
Lanes, as shown in figure 7, opened in 1995, and the Interstate 15
Express Lanes, opened in 1998, have dedicated, tolled lanes where the
flow of traffic is managed through toll prices that vary daily and
hourly. Tolls on State Route 91 range from as little as $1.10 to as
much as $8.50. During periods of heavier demand and congestion, toll
prices are higher so that fewer people will use the lanes, and a
consistent flow of traffic can be maintained. In Texas, the Katy
Freeway in Houston was originally designed to carry 80,000 vehicles per
day. With traffic now exceeding 200,000 vehicles per day, the Texas
DOT, in cooperation with FHWA, opened HOV-3 lanes (lanes that could
only be used by carpools of 3 or more passengers) to vehicles with two
passengers who pay a toll as express toll lanes in 1998. Texas DOT is
also building managed lanes, scheduled to open in 2009, that will have
peak toll pricing between 6:00 a.m. and 11:00 a.m. and between 2:00
p.m. and 8:00 p.m. The result, in both cases, is a system in which
commuters pay a toll for access to less congested lanes. More recently,
in Minnesota, where Minneapolis and St. Paul have been experiencing
rapid growth in congestion and, according to the Minnesota DOT, HOV
lanes were underused, the state legislature authorized the conversion
of the Interstate 394 HOV lanes to HOT lanes. The Interstate 394 MnPASS
optional toll lanes project opened in May 2005 with "dynamic pricing"
to adjust tolls from anywhere from 25 cents to $8.00, according to
traffic levels.
Figure 7: California State Route 91 Express Lanes and Toll Rates:
[See PDF for image]
Source: Orange County Transportation Authority.
Note: Shading represents varying toll prices.
In some states, tolling or variable pricing--in which toll rates differ
depending on conditions such as the time of day or location--is used
specifically to manage freight congestion. In October 2005, for
example, the Delaware DOT launched an initiative designed to address
problems with freight congestion on the Delaware Turnpike (Interstate
95) by encouraging trucks to travel at night. Tolls on trucks between
10:00 p.m. and 6:00 a.m. are 75 percent less than tolls during more
congested daytime hours. Another effort that incorporates variable
pricing, but is not a traditional form of facility-based tolling, is a
road user fee system that is being developed with an FHWA Value Pricing
Pilot grant by the Oregon Office of Innovative Partnerships and
Alternative Funding in cooperation with Oregon State University. The
system assesses mileage-based fees in place of motor fuels taxes, and
the fees vary for miles traveled during rush hour and within cordoned
downtown areas.
Many States Find That Tolling Is Not Feasible or Have Made Other
Choices:
The reason most frequently cited by state transportation officials for
not tolling is that tolling is not feasible. More specifically, there
is little need for new tolled capacity, tolling revenues would be
insufficient, or there is public and political opposition to tolling as
follows:
* Little need for new tolled capacity. Transportation officials in many
states indicated that low traffic volumes, a lack of congestion, and
low demands for additional capacity make tolling impractical. In states
such as Montana, North Dakota, South Dakota, and Wyoming, the
population density and percentages of urban vehicle miles traveled are
too low to support tolling.
* Insufficient revenues. In some states, tolling is not considered
because toll revenues would not cover the costs of projects. In some
cases, the issue involves traffic volumes that are so low that a
tolling approach would be impractical. In those states, transportation
officials explained that even if a tolling approach were to be
considered, tolls would have to be prohibitively high to fund capacity
enhancements and would likely result in traffic diversion to nontolled,
alternative routes. For example, a transportation official in Kansas
told us that there are few routes in Kansas that have a high enough
level of traffic to make them viable for tolling. Therefore,
opportunities for tolling are limited under the classic definition of
feasibility, for which toll revenue must be adequate to fund
construction, maintenance, and operations of a facility. Under this
definition, most roads would not generate sufficient revenues from
tolls to fund new highway capacity. In other cases, where traffic
volumes are higher, transportation officials told us that a tolling
approach is not even considered unless it can be demonstrated that the
project will be self-sustaining. In Massachusetts, for example, an
evaluation of HOT lanes determined that the toll rates people would be
willing to pay would not raise enough revenue to fund the capital
expenses to construct the facility.
* Public and political opposition. Officials from many states that are
not pursuing tolling mentioned some form of public or political
opposition to toll roads that has dissuaded transportation
professionals from pursuing tolling. The public or political opposition
is so strong, according to officials in some states, that tolling is
studied only with great caution and sensitivity, if at all. While some
states mentioned the lack of a tolling culture as a reason for not
tolling, other states that have tolled roads for years cited the long-
standing presence of toll roads as a reason for not planning to expand
tolling. In New Jersey, New Hampshire, and Ohio--states with long-
established toll roads--state officials said the presence of tolls has
instilled public opposition to them. For example, New Jersey officials
told us that opposition to new toll roads is strong because many state
border crossings and major highways are already tolled. In other cases,
DOTs face political opposition to tolling. In Mississippi, where other
toll projects are still being considered, the state DOT withdrew its
application to toll Interstate 10 under the Interstate System
Reconstruction and Rehabilitation Pilot Program in response to
political opposition.
States that do not toll and are not planning to construct toll roads
have also chosen options other than tolling to finance highway
construction and maintenance. For example, 13 states that are not
planning toll roads have used "GARVEE bonds" as grant anticipation
financing to borrow funds and pledge future federal-aid highway
revenues for repayment. South Carolina used state infrastructure bank
loans and federal credit assistance, along with state and local funds,
for its "27 in 7 Accelerated Program" through which it is completing $5
billion worth of highway infrastructure capacity and improvements in 7
years, compared with the 27 years it estimated would be needed under
conventional financing means. A smaller number of states, such as Iowa
and Tennessee, have remained committed to a primarily pay-as-you-go
approach, building new capacity only when money becomes available
through motor fuel tax revenues or other state revenues.
States That Are Considering and Implementing a Tolling Approach Face
Two Broad Types of Challenges:
Drawing on our analyses of states' experience with tolling and on a
review of selected published research on tolling, we have identified
two broad types of challenges that transportation officials have
encountered when attempting to implement tolling: (1) the difficulty of
obtaining political and public support in the face of opposition from
the public and political leaders and (2) the difficulty of implementing
tolling given a lack of, or overly restrictive, enabling toll
legislation; concerns about potential traffic diversion resulting from
toll projects; and a need to coordinate with other states and regions
when toll projects cross jurisdictional boundaries. (See fig. 8.) While
these two broad types of challenges may make a tolling approach
difficult to adopt or implement, states have nevertheless identified
specific ways to resolve or mitigate the challenges. We discuss the
strategies that states have used to address tolling challenges in the
following section of this report.
Figure 8: Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state transportation
officials.
[End of figure]
Garnering Political and Public Support Is the Most Often Cited
Challenge to Tolling:
State transportation officials who are implementing or are considering
implementing tolling say that garnering political and public support is
perhaps the greatest challenge to tolling. Some studies have also
reported this challenge. For example, in a recently issued report, the
Transportation Research Board cited studies that identified the
unpopularity of toll roads and public skepticism as fundamental
obstacles to employing a tolling approach.[Footnote 28] The report
identified the inconvenience of paying tolls, being forced to pay
twice, and inequities that a tolling approach would produce as the most
commonly expressed objections.[Footnote 29] The Congressional Budget
Office noted in its report that opponents of toll roads often charge
that such roads are unfair to motorists with low incomes who may not be
able to afford them. This concern is intensified if it involves trips
to work and the motorist has few alternatives.[Footnote 30] In a policy
brief issued by the Brookings Institution, the author notes that a
drawback of tolls is that people think these tolls would be just
another tax, forcing them to pay for something they have already paid
for through gasoline taxes.[Footnote 31] We have also noted in prior
work that political opposition to tolling has been substantial because
of concerns about equity and fairness.[Footnote 32] According to our
analysis, a number of factors influence public and political
perceptions about tolling. (See fig. 9.)
Figure 9: Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state transportation
officials.
[End of figure]
Double taxation arguments. The most frequent objection to tolls is the
argument that motorists traveling on toll roads are being asked to pay
twice; that is, a new roadway toll is being levied in addition to
existing taxes. States have a number of dedicated sources of revenues
that are used to finance highway capital programs. According to
transportation experts, the public generally believes that
transportation costs are already being paid for through motor fuel,
property, and sales taxes, as well as license and registration fees,
and in the case of trucks, special tire taxes and weight-distance fees.
Therefore, new road user fees, such as tolls, are often viewed as new
taxes.
Transportation officials in a number of states reported that concerns
about double taxation limited their consideration of a tolling approach
to varying degrees. In Wisconsin, where tolling is not being
implemented, a transportation official told us that the public
understands that the fuel excise tax and other user fees are used to
fund highway construction. Therefore, the public would view tolling as
another tax being imposed on them. This type of concern can be
compounded when tolls are being proposed for an existing facility. For
example, in Missouri, consideration of tolling to pay for Interstate
70's reconstruction faced opposition, in part, because the public
believes that the interstate highway has already been paid for,
according to state DOT officials. Missouri citizens generally regard
tolls as government's way of making users pay again, according to state
transportation officials. This view is supported by Missouri's history
of commitment to free roads. Citizens in Texas have voiced similar
arguments against tolls. In Houston, for example, plans to convert
State Highway 249 to a tolled road have met with some resistance on the
grounds of double taxation. At the public hearing organized to hear
views on the conversion, officials estimated that an overwhelming
majority of those in attendance were against the conversion because
they felt that the road had already been paid for. Strong opposition
can arise even before a roadway has been completed. A proposal to toll
a nearly completed portion of U.S. Route 183 north of Austin was
retracted after citizens expressed strong opposition. Transportation
officials told us that these citizens believed that since the road was
nearly complete, introducing tolls would amount to double taxation.
Projects are not self-sustaining. Transportation officials told us that
they often find it difficult to demonstrate that tolling is reasonable
and necessary because revenues collected from toll projects usually do
not fully cover project costs. In Oregon, for example, a financial
analysis of toll proposals indicated that the proposals under
consideration would not be economically feasible through the collection
of tolls alone, according to transportation officials. A private
consortium was selected to negotiate with the state DOT for the purpose
of advancing the projects. However, in the view of this consortium, the
new toll road can be financially viable only if existing parallel roads
are tolled. In some states, transportation officials stated toll
projects are not even considered unless it can be demonstrated that the
project will be self-sustaining. In Kentucky, for example, a
transportation official told us that traffic volumes alone can rarely
financially sustain rural roads through tolling and emphasized that it
would be difficult to garner public support for a toll project that
required partial subsidization. A transportation official in Arkansas
told us that while tolling is considered if revenues fund at least 20
percent of initial construction costs, a toll project would only be
considered if it can be shown that toll revenues would cover all
operations and maintenance costs. In Florida, toll proposals must pass
a financial feasibility test and prove that the proposed projects will
be self-sustaining before the projects are further considered for
advancement. According to Florida Turnpike Enterprise officials, the
standard for feasibility is that by the twelfth year of operation,
projected revenues must cover at least 50 percent of operating costs
and debt service and by the twenty-second year of operation, projected
revenues must cover all costs and debt service.
Concerns about inequities. Another objection to the use of tolling
involves concerns about the inequities that the approach would produce.
According to our review, groups that could be adversely affected by
tolling often object, as follows, on the basis of geographic inequity,
income inequity, and user inequity:
* Geographic inequity. Concerns about geographic inequity reflect the
belief that certain regions will benefit disproportionately from a
tolling approach while other regions will be unfairly disadvantaged.
Using a tolling approach to address a transportation need in one part
of a state might free up federal and state funding that might have
otherwise been used to address that need. This available federal and
state funding could then be used to support roads in another part of
the state, creating an unfair burden on those motorists that are being
tolled. In Florida, for example, there have been concerns about the
distribution and use of funds collected for projects in one region
(southern Florida) being distributed to and used for projects in
another region of the state (northern Florida). In the 1990s, three
southern counties--Palm Beach, Broward, and Dade--secured legislation
that would require the Florida Turnpike Enterprise to calculate the
dollar amount collected in those counties and determine how much of
that amount was returned to the counties to be used on their
facilities. As a result, the Florida Turnpike Enterprise created a
formula to implement that law, reflecting the need to balance
collections in those counties with what is being spent on facilities in
those counties.
* Income inequity. Concerns about the unequal ability of lower-income
and higher-income groups to pay tolls are often cited by transportation
experts as an important political barrier to the acceptance of a
tolling approach.[Footnote 33] Those opposing tolls on the basis of
income inequity argue that since tolls would represent a higher portion
of the earnings of lower-income households using the tolled road,
tolling imposes a greater financial burden on them and, therefore, is
unfair. In Maryland, this concern resulted in removing HOT lanes from
consideration in state transportation plans, according to FHWA. In June
2001, the governor decided to remove HOT lanes from the state
transportation plan because of the perceived inequity of linking an
easier commute with a person's ability to pay. However, in the
following year, the governor's office initiated a revised feasibility
study of value pricing that included investigating and addressing the
equity issues that were raised earlier, while encouraging the air
quality and congestion relief benefits of HOV lanes.
* User inequity. User inequity involves the belief that some classes of
system users are being unfairly disadvantaged. The trucking industry,
freight industry, and businesses may view tolling in this light. For
example, a transportation official in Virginia told us that a proposal
to toll only trucks on Interstate 81 is generally viewed by truckers as
an unfair burden being imposed on them. This transportation official
also noted that if the proposal is implemented, truckers will seek
alternative routes to avoid the tolls. In Missouri, officials
representing fuel marketers, fuel retailers, gas stations, and
convenience stores told us that they consider a tolling proposal
unfair. According to the industry officials, these businesses have
spent millions of dollars on their exit locations along the interstate
and believe they have paid their fair share of taxes. Consideration of
a tolling approach to enhance mobility on the interstate could
potentially have an adverse impact on these businesses because some
customers may choose alternative routes.
General views on government. According to transportation officials with
whom we spoke, public opposition to tolling can be exacerbated by a
mistrust of government generally. They said that when government
proposes tolls as a way to finance transportation, the public generally
considers the tolls as a new tax.
This mistrust can also be directed specifically at state transportation
departments. For example, in 1992, the Missouri DOT proposed a 15-year
plan that included a number of promised projects that would be
undertaken with an increase in the state's gas tax. However, according
to state transportation officials, after gaining support for the
increase, the state DOT did not deliver the promised projects as
scheduled. These officials said this failure to deliver contributed to
the public's mistrust of the DOT and its resistance to attempts by the
DOT to secure toll authority over the years. In some states, concerns
about the cost and management of major highway and bridge programs have
reflected dissatisfaction with the performance of state transportation
departments. For instance, as we reported in 2002, a legislative
commission in Virginia reported on cost overruns and schedule delays in
the state's highway program in 2000 and found that cost estimates
prepared for projects were substantially below the final costs. This
commission identified a potential funding gap of around $3.5 billion in
the state's $9 billion, 6-year transportation plan. Such concerns about
past performance can present challenges for transportation officials
who are attempting to advance a tolling approach.
Mistrust can also extend to private entities involved in toll road
development. As we reported in 2004, states engaging private-sector
sponsorship and investment can relinquish political control over their
ability to set toll rates and to carry out infrastructure improvements
on competing publicly owned roadways. For example, California could not
make any improvements along State Route 91--a project privately
financed with a combination of equity, bank, and institutional debt--
until the year 2030 because a noncompete clause created a 1.5 mile
protection zone along each side of the corridor. According to officials
from the Orange County Transportation Authority, public pressure on the
state DOT to improve the nontolled portion of the road motivated the
county to purchase the road back from the private consortium.
State and Local Transportation Officials Face Formidable Challenges in
Implementing Tolling Approaches:
In some states, transportation officials told us that they face
challenges in implementing toll projects. (See fig. 10.) We identified
the following three implementation-related challenges:
* Secure legislative authority to toll.
* Address the impact of traffic diversion caused by tolling.
* Coordinate with other states or regions.
Figure 10: Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state officials.
[End of figure]
Secure the authority to toll. Not having, or having restrictions built
into, enabling toll legislation poses a challenge for some
transportation officials as they develop tolling options. They told us
that limited legislative authority for tolling hampered their ability
to consider a full range of options to address the transportation needs
in their states. Ultimately, these transportation officials sought
methods other than tolling to address transportation needs or delayed
the development of an identified toll project as they pursued tolling
legislation.
Missouri's experience illustrates the challenges transportation
officials face when the state DOT does not have the statutory authority
to use a tolling approach to advance a project. State transportation
officials are considering turning Interstate 70 into a toll road to
finance capacity improvements. However, voters would first have to
approve an amendment to the state constitution to put toll roads under
the state DOT's jurisdiction--a measure that voters rejected in 1970
and 1992. To avoid another rejection, state DOT officials are exploring
alternative financing methods under existing authority, including the
use of a nonprofit corporation to build, operate, and maintain the toll
project. Transportation officials emphasize, however, that under this
option, the entity would not be able to spend state highway revenues
for the project--the same restriction that would prevent the state DOT
from advancing a toll project--because state funds can be used only for
the purposes enumerated in the state constitution, and toll roads were
not one of those purposes.
Restrictions in enabling legislation can also hamper attempts to
implement toll projects. For example, in the mid-1990s, the Minnesota
legislature authorized a study of public-private partnerships and
tolling as one approach to address congestion and leverage state
transportation investments. In conjunction with that study, the state
DOT requested public-private partnership tolling proposals and received
five proposals in response from private firms. Ultimately, the state
DOT recommended a proposal to build Trunk Highway 212 as a toll
facility and proceeded to complete a development agreement with a
private partner. However, the proposal was vetoed under the provision
of the enabling legislation that gives veto authority to local units of
government affected by a project. As a result, the Trunk Highway 212
project is now being completed under traditional methods and, according
to transportation officials, is taking longer to complete due to
funding limitations. New legislation, passed in 2003, eliminated the
local veto authority for converting HOV lanes to HOT lanes on existing
facilities, giving transportation officials more flexibility to
implement a tolling approach. This legislation, which followed a DOT
study of HOV lane usage on Interstate 394, authorizes the conversion of
the HOV lanes on Interstate 394 to HOT lanes to improve their
efficiency. Subsequently, through a design-build-operate agreement, a
private partner was secured to bring resources to the table and run the
operation.
Address concerns about traffic diversion. Traffic diversion resulting
from tolling may adversely affect people, municipalities, and
businesses. Concerns about such diversion have surfaced in comments by
municipalities, businesses, and the trucking industry on a proposal to
toll trucks on Interstate 81 in Virginia, according to state
transportation officials. Affected Virginia municipalities have
suggested, for example, that trucks will leave the interstate to avoid
tolls and wind up on local roads. Such diversion has the potential to
create congestion, increase accident and fatality rates, and increase
the municipalities' costs of maintaining these roads. The affected
municipalities have also expressed concerns about the potential
negative effects on economic development that may result from the loss
of business along toll routes. According to a recently completed study
that considered a number of different proposals, traffic diversion is
likely to occur if Interstate 81 is tolled.[Footnote 34] The study
estimated that up to one in four trucks would divert to nearby parallel
routes if a high toll rate[Footnote 35] was applied to commercial
vehicles.
Concerns about traffic diversion are not limited to new toll roads. The
Ohio Turnpike opened in the 1950s and, in the 1990s, traffic studies
revealed that commercial vehicles were increasingly diverting onto
parallel untolled roads, creating safety and other concerns. In
response, the governor released the Northern Ohio Freight Strategy in
October 2004, which included a policy to reduce tolls on commercial
vehicles in order to redirect traffic back to the Ohio Turnpike.
Subsequent traffic studies revealed this strategy was mostly
successful.
Coordinate on projects that involve multiple states or jurisdictions.
Coordination among states and regional jurisdictions is likely to
become a growing issue because increasing traffic congestion in
metropolitan areas is likely to require regional solutions. Without
good coordination with neighboring jurisdictions, individual
jurisdictions may find it difficult to solve traffic congestion. Even
if one jurisdiction manages to reduce congestion within its system, it
may simply shift that congestion to an adjacent jurisdiction. Yet
numerous factors could make coordination difficult. For example, the
need for coordination is especially critical if states adopt separate
tolling legislation with varying, perhaps incompatible, provisions and
begin tolling. Other potential challenges include ensuring the
interoperability of toll collection facilities when toll proposals
involve more than one state, addressing differences in state toll
legislation, and mitigating geographic inequities by fairly
apportioning the anticipated benefits and disadvantages of toll
projects among all stakeholders.
Oregon's experience illustrates how some of these issues might present
challenges for transportation officials who are attempting to advance
interstate toll projects. Oregon officials cited differing statutory
authorities between Oregon and neighboring Washington as a potential
coordination issue. In Oregon, transportation officials have the
authority to enter into PPPs when advancing a tolling approach, while
their counterparts in Washington do not yet have the authority to do so
if proposals for partnerships are unsolicited. As a result,
stakeholders involved with the Columbia River Crossing Project on
Interstate 5, which Oregon officials are attempting to pursue as a toll
project with a private partner, are seeking to promote legislation in
both states that will provide explicit authorization to advance the
project. The Oregon officials also noted that coordination would be
necessary to address geographic inequities that might arise from the
project, explaining that more of the toll revenues could come from
Washington, since motorists there commute into Portland. Transportation
officials in both states will need to take this into account as they
work towards an equitable apportioning of the project's costs and
benefits.
Three Broad Strategies Can Help State Transportation Officials Address
Challenges to Tolling:
As shown in figure 11, our review of state practices in implementing
tolling suggests three broad strategies that can help transportation
officials address challenges to its adoption and implementation. These
strategies have both short-term and long-term relevance for states as
they consider new transportation finance options to supplement
traditional approaches. Transportation officials in states that are
currently implementing or considering tolling as a means to raise
revenue or mitigate congestion can consider these strategies in the
short term to build support and smooth implementation of the tolling
approaches under consideration. In the longer term, transportation
officials in states that are not currently tolling, but choose to begin
to do so, can consider these strategies to build support for tolling.
Figure 11: Strategies to Address Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state transportation
officials.
[End of figure]
Develop an Institutional Framework That Supports Tolling:
The first strategy that transportation officials can consider involves
developing an institutional framework that facilitates tolling. In
developing such a framework, transportation officials can consider
building support for a tolling approach with the public and decision
makers in the state and securing enabling tolling legislation. (See
fig. 12.) Developing such a framework through these two means involves
identifying and articulating the goals to be achieved by the tolling
approach in the context of larger state policy goals.
Figure 12: Strategies to Address Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state transportation
officials.
[End of figure]
Building support. Building support for a tolling approach includes two
interim steps--establishing a rationale for tolling and defining the
underlying motivations for its use. Together, these steps provide a
basis for gaining political and public support before seeking and
securing adequate tolling legislation.
Establishing a solid rationale for tolling involves linking the
specific reasons, or goals, for tolling with state policy goals for
transportation.[Footnote 36] For example, linking a tolling goal, such
as managing congestion, to a broader state goal, such as using existing
infrastructure more efficiently, can provide a basis for its use.
Similarly, a tolling goal of supplementing transportation funding with
new revenues could contribute to a broad state policy goal of funding
investment in transportation systems with revenues generated directly
from users.
Articulating the underlying motivations for using a tolling approach
can also help transportation officials build support for and accomplish
broader transportation goals and tailor tolling goals to accomplish
those ends. For example, consideration of a tolling approach might be
motivated by a desire to accomplish other goals, such as finding a
replacement for the gas tax or attracting private investment for
transportation. Irrespective of the motivations that guide the
development of the goals, advocates of tolling have to make a
compelling case for its use to build public acceptance for it and make
it politically viable. Goal setting can help transportation officials
articulate the motivations for using the approach, identify the goals
to be achieved by its use, and demonstrate how the tolling goals will
tie into broader state goals. Such a process can help decision makers
formulate a transparent and comprehensive rationale for the use of
tolling and gain public and political support for it.
Secure legislative authority. Securing tolling legislation is the next
step in developing an institutional framework for tolling. Although
there are common reasons for tolling, the form legislation takes in
each state often depends on the motivations for using the approach and
ultimately the goals to be achieved through it. Our review of
legislative efforts in Texas, Virginia, Oregon, and Florida illustrates
how legislation evolved in response to different motivations and
tolling goals. Following are some of these legislative efforts:
* Leveraging transportation dollars. Texas enacted legislation that
provided for a broader application of tolling than currently existed
and established a funding mechanism that supported a broader use of
tolls in the state's transportation system.[Footnote 37] This
legislation facilitates tolling by realizing two goals--to expand the
use of tolling and to leverage tax dollars by allowing state highway
funds to be combined with other funds to build toll roads. This
combination of funds makes toll roads more feasible, since the entire
cost of the project does not have to be repaid with tolls. Virginia's
Public-Private Transportation Act of 1995 (PPTA) allows qualifying
local governments and certain other political entities to enter into
agreements authorizing private entities to acquire, construct, improve,
maintain, and operate qualifying transportation facilities. The public
entities may either solicit or accept unsolicited proposals from
private sources. Private-sector sponsorship and investment in
transportation projects could help states realize both an established
tolling goal to accelerate project delivery and a goal to leverage tax
dollars by securing private investment in transportation projects.
* Operating like a business. In some cases, there is a motivation to
"reinvent government" by operating in a more businesslike manner.
Public agencies of all types have pursued innovation and best practices
found in the private sector to improve the cost-effectiveness and
timeliness of product delivery. A goal that embodies these motivations
can take many forms in legislation. In Florida, for example,
legislation was passed in 2002 that turned the Florida Turnpike,
operated by the Florida DOT, into a business organization as a way to
preserve, improve, and expand the turnpike system. State decision
makers were interested in operating the turnpike as a business for the
state and employing private-sector methods in the areas of management,
finance, organization, and operation. The goals for the enterprise are
to increase revenues, expand capital program capabilities, and improve
customer service.
* Transitioning to a new system of transportation finance. The
sustainability of the current financing system has been called into
question, and as we have reported, a fundamental reexamination of the
present system will be necessary to increase the cost-effectiveness of
spending and to mitigate congestion.[Footnote 38] Some transportation
experts believe that shifting to a fee structure that more directly
charges vehicle operators for their actual use of roads would improve
the operation of the road system and better target investment. For
example, Oregon's efforts to explore mileage charges provide some
insights into how legislation can be developed to carry out such an
ambitious goal. A road user fee proposal, passed by the state
legislature in 2001, created a user fee task force to design a method
of charging drivers for their use of the state's roads as an
alternative to the current system of gas taxes. The task force proposed
the eventual imposition of a mileage fee in place of existing gas taxes
and pilot testing for the mileage fee as the first step toward
implementation. An institutional framework, such as the framework under
development in Oregon, can help states that are seeking to test or
implement new methods of highway financing to realize such goals.
Provide Leadership to Build Support for Individual Projects and Address
Tolling Challenges in Project Design:
The second strategy that can facilitate the use of tolling involves
implementing two interrelated and critical components: (1) providing
leadership to build support for and advance individual projects and (2)
addressing challenges to tolling in project design. (See fig. 13.) We
have found that having a strong advocate or advocates--committed both
to building support for projects and to ensuring that the projects move
forward--is crucial to the success of a project. A corollary to
providing committed leadership is ensuring that leaders endorse those
projects that most effectively address challenges to tolling in project
design.
Figure 13: Strategies to Address Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state transportation
officials.
[End of figure]
Providing leadership. Although leadership can take different forms, our
review revealed that a strong advocate can help build support for a
toll project. Transportation agency representatives or political
leaders are likely candidates to move a project to public acceptance.
For example, in Texas, the Governor and key legislators took the lead
in developing and supporting initiatives that would facilitate the use
of tolling to finance highway construction. Their efforts led to the
enactment of legislation that enabled the state DOT to invest in toll
projects. In Indiana, the Governor and the DOT Commissioner have
supported tolling as an approach to finance transportation projects by
promoting it in the media and in the legislature. However, in some
instances, public distrust of political and governmental agencies may
require a leader to emerge from another arena. For example, in
Minnesota, a task force of state and local officials, citizens, and
business leaders was convened in 2001 to explore a range of road
pricing options, including the conversion of HOV lanes to HOT lanes,
and make recommendations to elected officials. Since tolling had been
fairly controversial in the past, decision makers believed that a task
force would provide a more credible and independent voice to the
general public. Ultimately, the task force supported HOV to HOT
conversions, and with the Governor's support and the passage of
legislation authorizing the conversion, the Interstate 394 HOT lanes
project was implemented.
As a spokesperson for a project, a leader can explain to the public how
tolling will address a state's particular transportation situation.
Through the communication of essential ideas and values that a toll
proposal encompasses, support for the project can be solidified.
Communicating the benefits that tolling can provide for motorists, such
as increased efficiency, travel time savings, and choices about when
and where to drive, could increase the likelihood of buy-in from the
public and political leaders. For example, after examining congestion
pricing options in Minnesota, a task force of state legislators,
mayors, as well as business, environmental, and transportation leaders
recommended that the state should proceed with a demonstration project.
This led to the passage of legislation in 2003 supporting the
conversion of HOV lanes on Interstate 394 into optional toll lanes,
which would allow solo drivers to access the HOV lanes for a fee. With
the help of a communications consultant, a project team led by the
University of Minnesota's Hubert H. Humphrey Institute worked to
address the concerns of the public and communicate the benefits of the
project to the general public. The primary benefits of the project that
were conveyed included free access and priority for carpools and bus
users, premium speeds in express lanes that are maintained by tolls
that vary with demand, and access to the express lanes to single-
occupancy vehicles willing to pay a toll. Surveys conducted prior to
project implementation revealed that 69 percent of those surveyed were
aware of and understood the purpose of the project, and 64 percent
believed that allowing single-occupancy vehicles to use the carpool
lanes by paying a toll was a good idea. A leader can also stress that
tolls can help make up for shortfalls in public funds, allowing needed
highway improvements to be completed sooner. According to some
transportation officials, this point is particularly relevant when the
public does not share a state transportation leader's view of the
state's needs, or of the challenges associated with addressing those
needs within the current fiscal environment, or both.
One effective way to communicate the benefits of tolling is through
organized public education, outreach, and marketing efforts. Through
such efforts, the public can be informed about the transportation
situation in the state and the various options that are available to
address transportation needs. For example, in California, strong
political figures, as well as state and local officials, acted as
champions for individual toll projects. Seeking to maximize the
efficiency of the transportation system through congestion pricing,
these leaders and officials promoted two congestion pricing projects--
the Interstate 15 project and the State Route 91 project--using public
education and outreach to inform the public about the objectives of the
projects and to demonstrate how the objectives would be achieved.
Addressing challenges. In identifying toll projects to promote,
responsible leaders will likely be interested in projects that mitigate
the challenges to tolling. Therefore, addressing concerns about double
taxation, inequity, diversion, and coordination in project design can
help transportation officials build support for toll projects and
secure committed advocates for the projects.
When considering a tolling approach, transportation officials can
identify ways to effectively address identified challenges and gain a
better understanding of the potential impact of the approach through
data collection and analysis. Understanding the potential effects of a
toll project on traffic flows, specific groups, business activity, and
commercial transportation can be particularly useful to transportation
officials as they build measures into the project's design to address
identified challenges. Table 2 includes examples of questions and data
needs that transportation officials might consider as part of their
data collection and analysis.
Table 2: Questions That Can Be Considered When Planning and Designing
Toll Projects:
Question: How will traffic be diverted and who will suffer?;
Purpose: Analyzing how tolls would affect personal, business, and
commuting trips could help decision makers estimate the extent to which
traffic would be diverted. From these estimates, transportation
officials can develop strategies to address the impact of this
diversion on affected groups.
Question: To what extent will tolls meet the project's goals?;
Purpose: Determining the extent to which tolls will meet the project's
financial and other goals could help project sponsors make decisions
about setting the proper toll. If tolls are too low, they will not
generate enough revenue to pay for the project or, in the case of
congestion pricing, they will not divert sufficient traffic to relieve
congestion.
Question: Who loses and how do we compensate them?;
Purpose: Analyzing the effects that a toll project might have on
specific groups enables transportation officials to address many
questions about the equity consequences of the project. The data that
could be collected include important household and lifestyle
characteristics, including (but not limited to) income, residential
location, commuting patterns, number of vehicles, number of workers,
family size, annual travel, and employment type and location. Without
these data, it would be difficult to estimate the consequences for the
groups that could be most affected. Analysis would provide better
estimates of the extent to which a tolling approach would shift drivers
to carpools and transit and would provide more insight into how transit
operators might be able to expand service and how transit service might
benefit lower-income users.
Question: How will the project affect business activity and commercial
transportation?;
Purpose: Given the importance of transportation to the economy of
metropolitan areas and the widespread perception that congestion
increases business costs, transportation officials could consider
examining the impact of tolling on business activity and commercial
transportation when considering the use of a tolling approach. However,
this can be difficult for transportation officials because little is
known about the magnitude of congestion costs.[A] Factors affecting
this include the logistics patterns of firms;
the frequency, origin, and destination of trips;
and the ability of firms to adapt to congestion without affecting
costs. Research on how a tolling approach would affect commercial
carriers operating on those facilities could also provide some
insights.
Source: GAO analysis of relevant literature.
[A] Transportation Research Board, Curbing Gridlock: Peak-Period Fees
to Relieve Traffic Congestion (Washington, D.C.: January 1994).
[End of table]
To address general objections to tolling, transportation officials can
also consider potential arguments that might be raised on the grounds
of double taxation and inequity and think about ways to address these
arguments. Addressing these types of concerns is complex because the
fairness of shifting to tolling depends on the fairness of the existing
system of finance and on how it would be changed by a shift. It can be
argued, particularly in states where sales and property taxes are
important sources of financing for the transportation system, that the
existing system is not very equitable. In contrast, a tolling approach
raises revenues directly from those users willing to pay for the
service. Furthermore, the economics literature suggests that concerns
about inequity can be mitigated to some degree if revenues are
distributed in a way that addresses those concerns.
Transportation officials can address concerns about double taxation and
inequity during project design as a way to counter potential opposition
on these grounds. Setting goals for a project that reflect its intended
purpose and addressing any key challenge that could affect the
achievement of the goals can help transportation officials directly
respond to the concerns. For example, if the project goal is to use a
tolling approach to relieve congestion, transportation officials could
set the toll to reflect the external costs associated with peak period
use of the road, and the toll revenues could be dedicated to
maintaining, operating, and adding capacity to the facility. This
approach might convince users that the toll is not just another tax
that would be used for other purposes. In contrast, if the project goal
is to address inequities, revenues could be distributed quite
differently. Revenues could be distributed to disadvantaged groups in
the form of tax rebates or improvements in roads and transit in certain
areas. If businesses in specific areas are adversely affected by a
project, toll revenues might be used to improve transportation services
in those regions. For the Interstate 394 HOT lanes project, state
decision makers established the project goals of improving efficiency
and maintaining free-flow speeds for transit and carpools using the
converted HOV lanes. These goals led to decisions on how the toll
revenues would be distributed. The law requires that half of the excess
revenues generated from HOT lane facilities be used to improve and
maintain transit service.
Addressing the coordination issues involved in designing regional and
multistate projects is perhaps more daunting. No ideal institutional
mechanism appears to be available for managing a regional program;
nevertheless, some states have created new institutions to address
interstate coordination issues. For example, Oregon and Washington
formed a bistate task force to coordinate planning for improvements
that cross state borders. The task force includes officials from both
state governments, representatives from the affected metropolitan
planning organizations (MPO), members of the business community, and
residents of each state. The task force is charged with considering all
modes of transportation that could potentially ease congestion and
improve capacity on Columbia River crossings. The two states are
jointly conducting environmental impact studies on highway expansion
and transit improvements. The Oregon and Washington DOTs, the Portland
and Vancouver MPOs, and the transit authorities from both states are
jointly leading this study on the impact of capacity enhancement.
Involving officials from both states in evaluating the project can help
ensure that projects are equitable and effective in addressing the
needs of both states.
Select a Tolling Approach That Provides Tangible Benefits to Users:
When proposing a tolling approach, transportation officials should
consider promoting one that will produce tangible benefits to users
while justifying both the costs of the project and the fees that users
will be required to pay for the service. (See fig. 14.) The prospect of
such benefits increases the likelihood of the project's acceptance and
can help allay general objections to tolling.
Figure 14: Strategies to Address Challenges to Tolling:
[See PDF for image]
Source: GAO analysis of information provided by state transportation
officials.
[End of figure]
Although tolling can take different forms and decisions about its use
are state specific, transportation experts have noted that projects
that use congestion pricing offer predictability and choice to the user
and may be less likely to arouse fierce opposition than projects that
offer no new benefits or choice.[Footnote 39] For example, HOT lane
projects, which include both priced and free lanes, offer the benefit
of faster trip times for a price in HOT lanes and the choice of a
"free," but probably slower, trip in general purpose lanes. Pricing the
entire facility might result in more efficient rationing of limited
space on congested roads,[Footnote 40] but congestion tolls on entire
facilities or networks tend to meet with resistance despite their
economic efficiency. HOT lanes, on the other hand, may be less likely
to encounter resistance because they offer premium service for those
willing to pay the fee. While actual experience with road pricing in
the United States is still fairly limited, proponents of HOT lanes cite
several benefits as follows:[Footnote 41]
* First, according to reports and studies issued by FHWA, the
Transportation Research Board, the Reason Foundation, and the Brookings
Institution, they provide a premium service for a fee to those
travelers who have a special need and are willing to pay the fee.
Through variable pricing, traffic flows freely even during the height
of rush hours. The use of price and occupancy restrictions to manage
the number of vehicles traveling on them enables HOT lanes to maintain
volumes consistent with uncongested levels of service.
* Second, studies and reports issued by FHWA and the Reason Foundation
note that HOT lanes reduce traffic congestion in the general-purpose
lanes by diverting some solo drivers to the HOT lanes, thereby
benefiting those drivers who use conventional lanes.[Footnote 42]
* Third, according to FHWA and others, HOT lanes can make better use of
underutilized carpool (HOV) lanes, thereby alleviating political
pressure to decommission them. HOT lanes may provide an opportunity to
improve the efficiency of existing or newly built HOV lanes by filling
excess capacity that would not otherwise be used. At the same time, HOT
lanes continue to serve as HOV lanes for carpools and buses.
* Finally, reports and studies issued by FHWA and the Reason Foundation
note that HOT lanes generate revenue for transportation improvements.
Tolls can generate revenue for highway and transit improvements, such
as Bus Rapid Transit.[Footnote 43]
HOT lanes have been implemented on Interstate 15 in San Diego, State
Route 91 in Southern California, the Katy Freeway and U.S. Route 290 in
Houston, and Interstate 394 in Minneapolis. These cases illustrate how
transportation officials have advanced projects seeking to achieve the
potential benefits that may result from the approach. For example, to
guarantee free-flowing traffic, toll prices on the Interstate 15 HOT
lanes project are set dynamically, changing every 6 minutes to keep
traffic flowing freely in the HOT lanes. In providing motorists with
choice and providing premium services, the State Route 91 Express Lanes
provide a level of emergency and safety surveillance that, according to
surveys conducted by the private firm operating the toll facility, some
drivers choose to pay to use the toll lanes even when there is no
congestion on the adjacent free lanes. To optimize the use of existing
infrastructure, more productivity was sought on the Katy Freeway. HOVs
are defined as cars with three or more people during certain peak
hours. The Katy Freeway QuickRide program allows cars with two persons
to use the HOV lanes if they pay a toll. Daily use by paying users has
been between 150 and 200 vehicles for peak periods, and peak hour
travelers using the facility save an average of 18 minutes compared
with travelers on the nonpriced lanes.[Footnote 44] Finally, linking
the conversion of the HOV lanes to transit to increase mobility and
equity was taken into account on the Interstate 394 and Interstate 15
projects. Toll revenues generated on the Interstate 394 HOT lanes are
designated for facility and transit improvement and a large portion of
surplus revenues on Interstate 15 are used for new bus service.
Concluding Observations:
As congestion threatens the nation's mobility at a time when motor fuel
taxes--the principal source of funding for highway improvements--have
not kept up with rising costs, federal and state policy has generally
been not to increase motor fuel taxes, and state and local decision
makers are increasingly looking to a range of alternative mechanisms,
including tolling, to advance their surface transportation programs.
Over half the states have either adopted tolling or are seriously
considering tolling--and this number may increase. A tolling approach
can, under the right circumstances, be an attractive choice to state or
local governments because of the range of potential benefits--
generating new revenues, managing congestion, financing new capacity--
that it may provide. But these potential benefits come only by honestly
and forthrightly addressing the challenges that a tolling approach
presents. State and local governments may be able to address these
challenges by pursuing strategies that focus on developing an
institutional framework that facilitates tolling, by demonstrating
leadership, and by pursuing toll projects that provide tangible
benefits to users. While perhaps not applicable to every state to the
same degree or in the same way, these strategies form a basis for
overcoming potential impediments to tolling and developing a meaningful
and effective tolling approach that best suits the environment in each
state.
In the twenty-first century, demographic trends will drive mandatory
federal spending commitments and potentially overwhelm the ability of
the federal government to deliver and grow its discretionary programs.
This looming crisis requires a fundamental reexamination of existing
government programs and commitments, and state and local governments
will be challenged to consider new ways of delivering their programs.
Regardless of the demand for highway improvements, sustained, long-
term, large-scale increases in federal highway grants and state and
local spending seem unlikely. In this context, a tolling approach is
more than just finding new sources of money. Should states choose to
undertake it, a tolling approach has the potential to promote
efficiency in the use of infrastructure, allocate costs to users and
capture revenue from beneficiaries, stimulate private financing and
investment, and provide cost-effective solutions to mobility challenges
if viewed as fair and equitable by the public.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Transportation
for review and comment. Officials from the Department indicated that
they generally agreed with the report and provided technical
clarifications, which we incorporated as appropriate.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to congressional committees with responsibilities for transportation
issues; the Secretary of Transportation; and the Administrator, Federal
Highway Administration. We will also make copies available to others
upon request. In addition, this report will be available at no charge
on the GAO Web site at [Hyperlink, http://www.gao.gov.]
If you or your staff have any questions about this report, please
contact me at heckerj@gao.gov or (202)512-2834. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix IV.
Signed by:
JayEtta Z. Hecker:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of this report were to examine (1) the promise of
tolling to enhance mobility and finance highway transportation, (2) the
extent to which tolling is being used in the United States and the
reasons states are using or not using this approach, (3) the challenges
states face in implementing tolling, and (4) strategies that can be
used to help states address the challenges to tolling. We noted where
federal programs have played a role in state tolling decisions and
projects, but we did not evaluate the effectiveness of those programs.
To examine the promise of tolling to enhance mobility and finance
highway transportation, we reviewed reports and studies issued by
federal agencies and academia, as well as articles from relevant trade
journals; relied on perspectives gained from our past work on
transportation finance; and analyzed relevant studies and reports
issued by transportation experts. To identify the issues related to the
transportation system in terms of funding and mobility, we analyzed
data on population patterns and growth from U.S. Census reports and
vehicle miles traveled and motor fuel tax trends from the Federal
Highway Administration's (FHWA) Highway Statistics reports for 1982 to
2004. We also analyzed data from the 2005 Urban Mobility
Report[Footnote 45] to determine congestion levels and congestion costs
for selected cities in the United States. To supplement the information
obtained through our literature review, we interviewed officials of the
American Automobile Association; International Bridge, Tunnel and
Turnpike Association; the American Association of State Highway and
Transportation Officials; and the Environmental Defense Fund.
To determine the extent to which tolling is being used in the United
States, we designed and administered an Internet survey of state
department of transportation (DOT) officials and performed a
correlation analysis to examine the extent to which state financial and
demographic characteristics are associated with their status on using
tolling. (For more information about the correlation analysis, refer to
app. II.) Our review focused on toll roads and therefore, did not
include toll bridges and tunnels.
Survey. The questionnaire asked about each state's current and planned
toll road facilities. We sent the questionnaire to the directors of
state DOTs in 49 states and Washington, D.C. We did not send a
questionnaire to the Louisiana DOT because we administered our survey
only a few weeks after Hurricane Katrina struck New Orleans and the
Gulf Coast.
To minimize nonsampling error, such as measurement errors that can be
introduced when respondents do not understand questions or when they do
not have information to answer a particular question, we undertook
several quality assurance steps. Our social science survey specialists
designed draft questionnaires and conducted pretests with state DOT
officials in four states. During these pretests, we assessed the extent
to which respondents interpreted questions and response categories
consistently, the time respondents needed to complete the survey, and
the extent to which respondents had the information needed to answer
the survey questions. Using the results of these pretests, we revised
the questionnaire.
We administered the survey to the directors of state DOTs via the
Internet during September and October 2005, e-mailing the directors a
Web link to our questionnaire and requesting that they or their
designees complete it. We received responses from 49 states and
Washington, D.C.--a 100 percent response rate. We analyzed the data
using statistical software.
We compared the responses to key survey questions with information
obtained from our interviews with state DOT officials and from state
applications to the FHWA's tolling pilot program. In four instances,
data from these sources were inconsistent. We contacted DOT officials
in these states to resolve these inconsistencies and adjusted the
survey results accordingly.
Semistructured interviews. To determine the reasons states use or do
not use tolling, the challenges to tolling, and the strategies that
have been used to address the challenges, we conducted semistructured
interviews with state transportation officials from all states except
Louisiana, and interviewed stakeholders in six states that we visited
to determine the reasons states use or do not use the approach, the
challenges to using the approach, and the strategies that have been
used to address the challenges. We did not gather information directly
from the public.
We developed a set of questions to ask in semistructured interviews of
state transportation officials to gain more detailed information on
states' reasons for tolling or not tolling and the challenges states
face in tolling. Having visited 6 states and interviewing
transportation officials there, and excluding Louisiana, we conducted
semistructured interviews from the remaining states. We did not
interview transportation officials in Louisiana because our
semistructured interviews were conducted shortly after Hurricane
Katrina struck New Orleans and the Gulf Coast. To determine the
appropriate state official to interview in each state, we relied on
information from FHWA Division Administrators for the respective
states. After gathering the information from FHWA, we contacted and
interviewed the state officials and conducted our interviews. We
analyzed the data from the semistructured to identify major themes.
Site visits. To supplement information from our survey and
semistructured interviews, we visited six states that were in various
stages of planning or constructing diverse types of toll projects. We
selected the states for their diversity in terms of geography,
transportation needs, and tolling plans. The states were Minnesota,
Mississippi, Missouri, Oregon, Texas, and Virginia. We visited those
six states to obtain more detailed information on the challenges states
are encountering and the strategies states employ or are considering
employing to toll. We judgmentally selected four states where tolling
was either planned or under way and two states where tolling had been
proposed and rejected by a vote of either the citizens or the
legislature. During our site visits, we interviewed state, local, and
FHWA officials.
To identify strategies that can be used to address the challenges to
tolling, we analyzed the results of our review on tolling efforts and
built on the perspectives gained from our past work on federal
investment strategies. We also analyzed reports and studies issued by
transportation experts and academia on finance reform to identify broad
strategies that can be used to help transportation officials adopt and
implement a tolling approach.
We performed our work from June 2005 through June 2006 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Correlation Analysis:
To identify state characteristics that are linked with states'
decisions to toll roads, we performed a correlation analysis that
examined the relationship between those decisions and various state
demographic and financial characteristics. These characteristics
included, but were not limited to, population; per-capita income; gross
state product; vehicle miles traveled; capital expenditures on
highways; and local, state, and federal highway trust fund
appropriations. To perform this analysis, we updated the data that we
had collected from the Federal Highway Administration (FHWA) and Bureau
of Economic Analysis (BEA) for our previous reports,[Footnote 46] and
converted them to inflation-adjusted 2004 dollars using BEA's chain-
type price index for gross domestic product (GDP), as well as its state
highway and streets chain-type price index. For those characteristics
that represented measures of change, we used the changes in these
factors from 1990 to 2000 to be consistent with the years when the U.S.
Census of Population and Housing was conducted and, for those
characteristics that represented measures of levels, we used data from
2002. We chose 2002 because data for some characteristics were not
available for more recent years. We divided states into two groups,
tolling and nontolling, based on information gathered from our state
survey and FHWA documentation. We considered the associations between
tolling and nontolling with each demographic or financial
characteristic singly and did not control for the effects of other
characteristics on these tolling decisions (as we would do in a
multivariate analysis). For this reason, the results of our correlation
analysis indicate a simple statistical relationship between tolling
status and a study characteristic and do not imply causality.
Interactions may be more complex when multiple characteristics are
simultaneously associated with tolling status. In addition, our results
may be sensitive to how we defined tolling status.
Although certain characteristics in a state's finances and tax policies
might be related to financial need, our correlation analysis found only
limited relationships between various state demographic and financial
measures and whether states are and are not planning toll roads. (See
table 3.) For example, we found the following:
* There is wide variation in state motor fuel tax rates among the
states, ranging, as discussed earlier, from 7.5 cents to 28.1 cents per
gallon in 2002, and we investigated whether state motor fuel tax rates
are correlated with decisions to toll. While a slight inverse
relationship exists between a state's decision to toll and the level of
its motor fuel taxes, the slightness of this relationship suggests that
states planning toll roads are not much more likely to be the ones with
lower motor fuel tax rates than other states.
* While state incomes vary greatly, a state with higher motor fuel tax
rates is also more likely to have higher fuel tax revenues as a
percentage of its gross state product than states with lower motor fuel
tax rates. As with fuel tax rates, a slight inverse relationship exists
between a state's decision to toll and the level of its fuel tax
revenues as a percentage of its gross state product. However, the
slightness of this relationship suggests that states planning toll
roads are not much more likely to be the ones with lower fuel tax
revenues as a percentage of their gross state product than other
states.
* The extent to which motor fuel taxes are disbursed to
nontransportation uses could contribute to what state officials
characterized as general shortfalls in highway funding. The
relationship between states planning toll roads and the use of motor-
fuel tax revenue is only slight, suggesting that states planning toll
roads are not much more likely to have more of their fuel tax revenues
used for nontransportation programs than other states.
Although there appears to be little relationship between state finance
and tax policy characteristics and tolling, our analysis indicates that
there are some other factors that are related to states' decisions on
tolling. For example, both the size of the state, whether measured by
population or by vehicle miles traveled (VMT), and whether it is
growing rapidly, again measured by population or VMT growth, are
directly related to states' decisions to toll. These relationships are
consistent with statements made by state transportation officials on
the use of tolling to fund highways due to increasing demand for
highway travel. In addition, our analysis revealed a relationship
between federal funding and a state's decision to toll. Each state
collects federal motor fuel taxes that are deposited into the Highway
Trust Fund and receives grants through the federal-aid highway program
according to formulas specified in law. The states that are planning
toll roads are moderately associated with the federal-aid "donor
states"--those states that contribute more to the Highway Trust Fund
than they receive in federal highway grants. Thus, donor states are
statistically more likely to be planning toll roads than donee states-
-those states that receive more in grants than they collect.
Table 3: Results of Correlation Analysis:
Factors: Motor fuel tax rate (in cents per gallon);
Decision to toll[A]: correlation coefficient: (number of
observations): -0.052 (51).
Factors: Fuel tax revenue as percent of gross state product;
Decision to toll[A]: correlation coefficient: (number of
observations): -0.005 (51).
Factors: Percent of fuel tax revenues used for nonhighway purposes;
Decision to toll[A]: correlation coefficient: (number of observations):
-0.095 (50)[B].
Factors: Population;
Decision to toll[A]: correlation coefficient: (number of observations):
0.309 (51).
Factors: Percentage change in population;
Decision to toll[A]: correlation coefficient: (number of observations):
0.140 (51).
Factors: Vehicle miles traveled (in millions);
Decision to toll[A]: correlation coefficient: (number of observations):
0.368 (51).
Factors: Percentage change in vehicle miles traveled;
Decision to toll[A]: correlation coefficient: (number of observations):
0.295 (51).
Factors: Highway Trust Fund apportionment/payment ratio;
Decision to toll[A]: correlation coefficient: (number of
observations): -0.319 (51).
Source: GAO.
Note: Data from 2002 were used in the correlation analysis, except for
the percentage change in population and the percentage change in
vehicle miles traveled, both of which measure values in 2000 against
values in 1990. Motor fuel tax rates were expressed in 2004 dollars. It
is worth noting that the correlation coefficient indicates a
statistical association between the study variable and tolling/
nontolling status of a state without controlling for the effects of
other characteristics on these tolling decisions as in a multivariate
analysis.
[A] 1=yes, 0=no.
[B] We did not include data for the District of Columbia.
[End of table]
[End of section]
Appendix III: Survey Questions:
Current Toll Road Facilities:
Question 1: Are there any toll road facilities in your state? Please do
not count any tolled bridges or tunnels as toll roads.
1. Yes
2. No (Skip to question 10.)
Question 2: Are any of these facilities new roads that were built on
new alignments?
1. Yes
2. No:
Question 3: Were any of these facilities previously untolled?
1. Yes
2. No:
Question 4: Are any of these facilities new lanes added to roadways
that were previously untolled?
1. Yes
2. No:
Question 5: Are any of these facilities HOT lanes (in which single
occupancy vehicles can gain access to HOV lanes by paying a toll)?
1. Yes
2. No:
Question 6: Do any of these facilities charge tolls that vary by time
of day?
1. Yes
2. No:
Question 7: In what year did the first toll road facility in your state
open to traffic? (Please do not consider facilities that opened before
1938.)
Question 8: In what year did the most recent toll road facility in your
state open to traffic? (Please do not consider facilities that opened
before 1938.)
Question 9: Which of the following agencies participate in managing the
toll road facilities in your state?
1. State Department of Transportation
2. Public toll authority
3. Other state agency
4. Local or regional government agency
5. Private entity:
Planned Toll Road Facilities:
Question 10: Are there plans in your state to build any toll road
facilities for which an Environmental Review and a Record of Decision
have been completed?
1. Yes
2. No (Skip to question 19.)
Question 11: Are any of these facilities in the design or right-of-way
stage?
1. Yes
2. No:
Question 12: Are any of these facilities in the construction phase?
1. Yes
2. No:
Question 13: Are there plans for any of these facilities to be new
roads built on new alignments?
1. Yes
2. No:
Question 14: Are there plans to toll a roadway that is currently
untolled?
1. Yes
2. No:
Question 15: Are there plans for any of these facilities to be new
lanes added to roadways that are currently untolled?
1. Yes
2. No:
Question 16: Are there plans for any of these facilities to be HOT
lanes (in which single occupancy vehicles can gain access to HOV lanes
by paying a toll)?
1. Yes
2. No:
Question 17: Are there plans for any of these facilities to charge
tolls that vary by time of day?
1. Yes
2. No:
Question 18: Which of the following agencies would participate in
managing these planned toll road facilities?
1. State Department of Transportation
2. Public toll authority
3. Other state agency
4. Local or regional government agency
5. Private entity:
Final Questions:
Question 19: Are there plans in your state to build any toll road
facilities for which an Environmental Review or a Record of Decision
have NOT been completed?
1. Yes
2. No:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
JayEtta Z. Hecker (202)512-2834:
Staff Acknowledgments:
In addition to the individual named above, Steve Cohen, Assistant
Director; Mark Braza; Jay Cherlow; Bess Eisenstadt; Simon Galed; Moses
Garcia; Bert Japikse; Terence Lam; Liz McNally; and Don Watson made key
contributions to this report.
(544101):
FOOTNOTES
[1] Federal Highway Administration, Toll Facilities in the United
States Interstate System Toll Roads in the United States, Table T-1,
Part 3 (Washington, D.C.: Jan. 1, 2005) and Federal Highway
Administration, Toll Facilities in the United States Facts (Washington,
D.C.: Jan. 1, 2005).
[2] Turnpike is a term used interchangeably with toll road, which is a
highway that requires toll collections from all drivers (usually with
the exception of emergency vehicles). Typically, the tolls are used to
support operations and maintenance, as well as to pay debt service on
the bonds issued to finance the toll facility.
[3] Tom Lewis, Divided Highways: Building the Interstate Highways,
Transforming American Life (New York: Penguin, 1997).
[4] National Bureau of Economic Research, Political Processes and the
Common Pool Problem: The Federal Highway Trust Fund (Cambridge, MA.:
June 2000).
[5] Lewis, Divided Highways.
[6] Federal Highway Administration, Federal-Aid Highway Toll Facilities
(Washington, D.C.: June 16, 2005).
[7] Texas Transportation Institute, 2005 Urban Mobility Report (College
Station, TX: May 2005).
[8] As we reported in 2003, economists generally believe that charging
surcharges or tolls during congested periods can enhance economic
efficiency by making them take into account the external costs they
impose on others in deciding when, where, and how to travel. In
congested situations, external costs are substantial and include
increased travel time, pollution, and noise. The goal of efficient
pricing on public roads, for example, would be to set tolls for travel
during congested periods that would make the price (including the toll)
that a driver pays for such a trip equal or close to the total cost of
that trip, including external costs. GAO, Reducing Congestion:
Congestion Pricing Has Promise for Improving Use of Transportation
Infrastructure, GAO-03-735T (Washington, D.C.: May 6, 2003). For
further discussion of the research on congestion pricing, see
Transportation Research Board, Curbing Gridlock: Peak-Period Fees to
Relieve Traffic Congestion (Washington, D.C.: January 1994).
[9] GAO-03-735T.
[10] According to our survey of state DOTs, the five states currently
operating facilities are California, Minnesota, New York, Texas, and
Virginia. States that are planning facilities include California,
Colorado, Maryland, Virginia, Texas, and Washington.
[11] Cal Poly State University, Continuation Study to Evaluate the
Impacts of the SR 91 Value-Priced Express Lanes Final Report (San Luis
Obispo, CA: December 2000).
[12] Cambridge Systematics for Minnesota Department of Transportation,
MnPASS System Study, Final Report (Cambridge, MA: Apr. 7, 2005).
[13] GAO, Highway Congestion: Intelligent Transportation Systems'
Promise for Managing Congestion Falls Short, and DOT Could Better
Facilitate Their Strategic Use, GAO-05-943 (Washington, D.C.: Sept. 14,
2005).
[14] Brookings Institution, Improving Efficiency and Equity in
Transportation Finance (Washington, D.C.: April 2003);
Eric Kelderman, Road Funding Takes a Toll on States (Washington, D.C.:
Feb. 17, 2006);
and Transportation Research Board, "Special Report 285: The Fuel Tax
and Alternatives for Transportation Funding" (Washington, D.C.: 2005).
[15] Highway user tax receipts, such as motor fuel taxes, are deposited
into the Highway Trust Fund and distributed to the states according to
formulas based on vehicle miles traveled, motor fuel used on highways,
and other factors, which are specified in law. GAO, Surface and
Maritime Transportation: Developing Strategies for Enhancing Mobility:
A National Challenge, GAO-02-775 (Washington, D.C.: Aug. 30, 2002).
[16] Texas Transportation Institute, 2005 Urban Mobility Report
(College Station, TX: May 2005).
[17] Brookings Institution, Improving Efficiency and Equity in
Transportation Finance (Washington, D.C.: April 2003).
[18] As we reported in 2004, three of the four toll road projects that
were built with private participation and investment and were open to
traffic at that time were not financially successful. See GAO, Highway
and Transit: Private Sector Sponsorship of and Investment in Major
Projects Has Been Limited, GAO-04-419 (Washington, D.C.: Mar. 25,
2004).
[19] In addition, the City of Chicago and the State of Indiana have
contracted with private entities to operate existing facilities.
[20] GAO-04-419.
[21] Plans for TTC include TTC 35, which is projected to parallel
Interstate 35 and Interstate 69.
[22] The Central Texas Regional Mobility Authority in the Austin area,
the Harris County Toll Road Authority in the Houston area, and the
North Texas Tollway Authority in the Dallas area.
[23] In our count, we included affirmative responses to our survey
questions regarding (1) planned toll road facilities that were in
design/right-of-way or construction and (2) plans for toll road
facilities that were not yet in design or construction but for which an
environmental review and Record of Decision had been completed. We
compared the responses to these questions with information obtained
from our interviews with state DOT officials and from state
applications to FHWA's tolling programs, including the Interstate
System Reconstruction and Rehabilitation Pilot Program and the Value
Pricing Pilot. In four instances, data from these sources were
inconsistent. We contacted DOT officials in these states to resolve
these inconsistencies and adjusted the survey results accordingly.
[24] The 16 states include California, Colorado, Delaware, Florida,
Georgia, Illinois, Indiana, Maine, Maryland, Minnesota, Pennsylvania,
South Carolina, Texas, Utah, Virginia, and West Virginia.
[25] The 7 states include Alabama, Arkansas, Mississippi, Missouri,
North Carolina, Oregon, and Washington.
[26] The Interstate 70 reconstruction project has been approved as one
of the slots in the Interstate System Reconstruction and Rehabilitation
Pilot Program. Federal approval is necessary for states to toll
interstate highways.
[27] This is a conceptual illustration that shows a complete build out.
TTC will be phased in as transportation demand warrants and private
sector funding makes it feasible. Since it will be developed based on
transportation demand, it is conceivable that not all elements will be
developed concurrently and may not be located adjacent to each other as
shown in the illustration. Depending on environmental and engineering
factors, transportation modes may diverge. Input from the ongoing
public meetings will help determine plans for the TTC. Two projects are
being pursued by Texas DOT, TTC 35 and TTC 69. Both are under
environmental review, and neither right-of-way acquisition nor
construction has been federally approved.
[28] Transportation Research Board, "Special Report 285: The Fuel Tax
and Alternatives for Transportation Funding" (Washington, D.C.: 2005).
[29] At the same time, the study acknowledged that the evidence on
public opinion is mixed and that some toll roads find public
acceptance.
[30] Congressional Budget Office, CBO Memorandum: Toll Roads: A Review
of Recent Experience (Washington, D.C.: February 1997).
[31] The Brookings Institution, Policy Brief: Traffic: Why It's Getting
Worse, What Government Can Do (Washington, D.C.: January 2004).
[32] GAO-03-735T.
[33] Transportation Research Board, "Special Report 285: The Fuel Tax
and Alternatives for Transportation Funding" (Washington, D.C.: 2005)
and Road Value Pricing: Traveler Response to Transportation System
Changes (Washington, D.C.: October 2003);
Brookings Institution, Traffic: Why It's Getting Worse, What Government
Can Do (Washington, D.C.: January 2004);
Congressional Budget Office, CBO Testimony: Congestion Pricing for
Highways (Washington, D.C.: May 6, 2003) and CBO Memorandum: Toll
Roads: A Review of Recent Experience (Washington, D.C.: February 1997);
and GAO-03-735T.
[34] U.S. DOT, Federal Highway Administration, and the Virginia
Department of Transportation, I-81 Corridor Improvement Study: Tier 1
Draft Environmental Impact Statement, November 28, 2005.
[35] The study estimated that 12 percent would divert to nearby
parallel routes if a low toll rate was applied to commercial vehicles.
The study used a high toll rate of $0.07 per mile per axle and a low
toll rate of $0.04 per mile per axle.
[36] This discussion of tolling goals assumes that the approach makes
economic sense and is a viable and reasonable option for making
transportation improvements in the state. It also assumes that all
options under consideration for transportation improvements have been
assessed in an adequate context. When it is determined that a tolling
approach is a viable and reasonable option for making transportation
improvements and should, therefore, be made available as another tool
to finance transportation, the development of tolling goals can help
transportation officials strengthen their case for tolling.
[37] 2003 Tex. Sess. Law Service, Ch. 1325. The bill provided for the
establishment of the TTC, establishment of guidelines for the creation
of Regional Mobility Authorities, use of PPPs, provision of toll equity
money for new toll projects, and application of tolls on nontolled
roads.
[38] GAO, 21ST Century Challenges: Reexamining the Base of the Federal
Government, GAO-05-325SP (Washington, D.C.: February 2005).
[39] GAO-03-735T;
Transportation Research Board, "Special Report 285: The Fuel Tax and
Alternatives for Transportation Funding" (Washington, D.C.: 2005);
Reason Foundation, Building a Case for HOT Lanes: A New Approach to
Reducing Urban Highway Congestion (Los Angeles, CA: April 1999);
and FHWA, A Guide for HOT Lane Development (Washington, D.C.: March
2003).
[40] Economists say that in deciding to drive on a congested highway,
each road user is inherently imposing external costs on other road
users by causing delay. A congestion toll requires motorists to take
account of those costs.
[41] Federal Highway Administration, A Guide for HOT Lane Development
(Washington, D.C.: March 2003);
Transportation Research Board, Road Value Pricing: Traveler Response to
Transportation System Changes (Washington, D.C.: October 2003);
Reason Foundation, HOT Networks: A New Plan for Congestion Relief and
Better Transit (Los Angeles, CA: February 2003) and Building a Case for
HOT Lanes: A New Approach to Reducing Urban Highway Congestion (Los
Angeles, CA: April 1999);
and Senate Committee on Environment and Public Works, Testimony on
Peak- Hour Traffic Congestion, March 19, 2002.
[42] If diversion of traffic to HOT lanes reduces peak-period
congestion in the general purpose lanes, the lower congestion may
attract additional peak-period drivers in those lanes. These drivers
might be people who previously used alternative routes, traveled at
other times of day, or used mass transit to avoid the congestion, but
who would prefer to use the general purpose lanes at peak periods if
congestion in those lanes at those hours were reduced. The result may
be as much congestion as before the HOT lanes were open because only
when congestion returns to that level will other potential users of the
general purpose lanes at peak periods no longer have this new incentive
to switch to those lanes. For additional information, see Anthony
Downs, Brookings Institution Policy Brief #128: Traffic: Why It's
Getting Worse, What Government Can Do (Washington, D.C.: January 2004).
[43] Bus Rapid Transit refers to frequent bus service operating in
special lanes.
[44] North Central Texas Council of Governments, Regional Value Pricing
Corridor Evaluation and Feasibility Study (Arlington, TX: June 2005).
[45] Texas Transportation Institute, 2005 Urban Mobility Report
(College Station, TX: May 2005).
[46] GAO, Trends in Federal and State Highway Investment, GAO-03-744R
(Washington, D.C.: June 18, 2003) and GAO, Federal-Aid Highways:
Trends, Effect on State Spending, and Options for Future Program
Design, GAO-04-802 (Washington, D.C.: Aug. 31, 2004).
GAO's Mission:
The Government Accountability Office, the investigative arm of
Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds;
evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains
abstracts and full-text files of current reports and testimony and an
expanding archive of older products. The Web site features a search
engine to help you locate documents using key words and phrases. You
can print these documents in their entirety, including charts and other
graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as "Today's Reports," on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order
GAO Products" heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office
441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director,
NelliganJ@gao.gov
(202) 512-4800
U.S. Government Accountability Office,
441 G Street NW, Room 7149
Washington, D.C. 20548:
