One of the most hated ideas in human history is the toll. This hatred is best exemplified by the 19th Century “Three Billy Goats Gruff” fairy tale, where a troll under the bridge (who tries to collect the ultimate toll) is defeated by a group of wily goats. This hatred is re-ignited each time tolls to use the various turnpikes, parkways, bridges, and tunnels, that make up a wide swath of America’s highway network, are increased.
The anger at tolls often masks their breadth and benefit. Let’s remember we pay a “toll” to use the “free” roads, when we fill up our gas tank, in the form of fuel taxes. We also pay some form of a “toll” when we ante up at the DMV to register our vehicles. Oh, and the fares we pay to fly, take the train, or travel by Uber and Lyft? Those are tolls, too.
While nobody likes to pay a toll, they are beneficial user fees. After all, millions of Americans and billions in assets are required to construct and maintain the various transportation services and arteries that make it possible for us to move about. The ability to direct our funds toward the mode or modes we choose is consistent with a belief in the free marketplace (though by no means is the system perfect, especially when you find yourself in Washington, DC-area traffic).
A critical variation on tolling is congestion pricing, also known by the wonky names like “yield management” or “differential pricing.” The best examples of this are strategies airlines employ that cause ticket prices to go up or down based on when, where, and how many other people are flying to your destination. This has enabled airlines to simultaneously improve their returns in a highly-competitive marketplace by auctioning off that last seat on a flight to the highest bidder, while also consistently offering prices far below what was charged during the era when the now-disbanded Civil Aeronautics Board set fares and determined routes. Many pro-consumer crusaders will be surprised to hear that market freedom has actually produced lower rates than supposedly benevolent government bureaucrats. They will be further surprised to know that air travel is not the only mode of transportation where this took place.
Congestion-based tolling has also benefitted us on the highways, where private investors such as Transurban have invested their own capital to add highway capacity in exchange for the ability to charge variable tolls. This has produced two benefits: first, it allows those willing to pay the ability to bypass traffic jams, rather than complain about them. Second, it also galvanizes those stuck in the traffic jams to be more aggressive in holding intransigent politicos to account for their continued misuse of the extensive gas tax funds being contributed for maintenance of public highway infrastructure.
Of course, all is not well on the nation’s highways because many of the same intransigent politicians are trying to use tolling and congestion pricing to disrupt, rather than facilitate the free movement of the Americans. The most egregious example comes from New York City, where the Biden Administration, New York Governor Kathy Hochul, and Janno Lieber, head of the Metropolitan Transportation Authority, recently implemented a tolling scheme that forces anyone driving into Midtown and Lower Manhattan to pay a variable toll.
While that might sound like a bad idea, it gets worse. The unelected Metropolitan Transportation Authority has mismanaged its transportation network so ineptly that 50% of bus riders and 14% of subway passengers pay no fare whatsoever. The MTA also has the power to extort up to 25% more on select “Gridlock Alert Days,” meaning an everyday American would pay up to $27.31 ($16.06 in peak hour tolls to cross the George Washington Bridge, Holland Tunnel, or Lincoln Tunnel, and up to $11.25 in newly-imposed “Congestion Pricing” tolls) simply to exist on parts of Manhattan Island with a car.
Yet, the story does not end there, as a quick perusal of the toll rates shows trucks will pay between $7.20 and $14.40 to enter the congestion zone, depending on their entry point, and up to $43.36 to cross into Manhattan from New Jersey. Trucks, of course, travel for business purposes: moving freight, or carrying people and equipment to perform work on commercial buildings and personal residences. Thus, costs go up for everyone thanks to the congestion pricing, and money which could otherwise flow into paychecks and new investments is being hoovered up by an unaccountable public agency too unwilling to collect fares from its own bus and subway riders.
New York City might be a group of deep blue islands in a blue state, but if it proves capable of maintaining this pricing scheme, the congestion pricing cancer will spread. First it will come to other large cities in blue states like Chicago and Los Angeles. Later, however, it will find its way to growing red state cities such as Nashville, Jacksonville, and Salt Lake City. What is the basis for this assumption? Many public officials routinely express the desire to “be competitive” as a justification for copying bad, big government policies. This is certainly the case when tax revenue is involved.
Tolling and congestion pricing can be key parts of a future where America’s transportation infrastructure thrives—but not when it is used by government as a way to modify our behavior. Therefore, it is up to the American people to restrain the worst instincts of our political class and preclude them from turning a positive user fee into a negative constraint on our way of life.
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