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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). 

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