Making Tolling Transparent: Analyzing Processes Used to Allocate & Distribute Toll Highway Revenue in Multiple States

Transportation finance has become increasingly unreliable in recent years, due to the declining revenue available from the motor fuel tax, increasing auto efficiency, and political reluctance to raise taxes. In many states, this has led to deferred maintenance, poor road quality, and failure to satisfy demand for better infrastructure. Some states have relied on toll revenue and other user fees to overcome these revenue challenges. Tolls have enabled states such as Texas, Florida, Georgia, and California, among others, to build significant road mileage in the past decade, and the Trump Administration has identified user fees as its primary avenue for future infrastructure construction (White House, 2018). Despite growing interest in toll finance, there is little understanding in the transportation literature of how independent local tolling agencies decide to raise and spend money. Nor is it well understood how this process connects with existing regional transportation decision making like Metropolitan Planning Organizations (MPOs). Indeed, there is concern from local elected officials about the level of spending toll road agencies have directed towards continual road construction, rather than essential maintenance. While the enabling laws often require toll road authorities to spend revenue on maintenance and debt retirement, state regulations vary in the discretion granted to toll agencies to raise and lower tolls. This study hypothesizes that different toll road governance models will provide varying incentives to raise tolls and spend them on existing users vs. continuous capital expansion (which could increase the revenue base for the agency, but, if planned independently from MPOs and local governments, could lead to unwanted sprawl, auto dependence, and social inequities). It is also unclear to what degree toll road agencies are following traditional Regional Transportation Plans, approved by MPOs to direct federal transportation dollars. This study catalogs toll roads from across the US, using state enabling legislation to classify toll roads by governance type (e.g. private, public-private-partnership, public corporation, independent regional/local special agency, independent state agency, state-managed, though there may be others). This study will select a representative sample of toll roads across several US states for further examination and comparison. Toll roads will be chosen based on their governance type, road size, and state. This study will examine the possibility that structural incentives are shaping tolling and spending decisions. This will be done through an examination of meeting minutes from the time when toll agencies were deciding whether/how much to raise tolls, looking for the factors that shaped board members’ decisions, and the extent to which the toll was designed to satisfy maintenance and operations needs vs. capital construction of expanded toll facilities. Researchers will also examine the extent to which the toll road's governance and funding model, as well as the MPO’s Regional Transportation Plan, were factors in board members’ decision. In cases where the decision process is still unclear, board members may be interviewed. This study will provide a comprehensive picture of the structural incentives that influence toll road agencies’ decisions, as well as their role in the regional transportation planning process. As we contemplate the possibility of moving towards greater toll financing, this research fills an essential gap in the literature, which has not fully understood the process of making decisions over how to spend billions of dollars in toll revenues. As we devolve more transportation decisions to local governments and independent special authorities, there is the potential we could create a parallel system for revenue collection and spending that lies outside the traditional RTP process. It is crucial that we know how toll road agencies operate, how they make decisions over spending, and how toll road governance models shape this process—since, ultimately, it is state laws that provide the best avenue for change.