Monday, June 12, 2017

Building the Wyoming Expressway

Good news: the Wyoming Department of Transportation is going to analyze the case for putting tolls on the I-80. This is a step in the right direction under one very important condition, namely that the tolls a) in the short term replace tax increases, and b) in the long term lead to lower taxes. 

It is not clear yet when we will see a formal proposal for tolls, but hopefully WYDOT will have something ready in 2019, when the legislature meets for a general session. 

This is the right move at the right point in time.
The Trump administration has just announced the first step toward drastically facilitating the permission process for new infrastructure projects, with a on-stop shop for the federal government's involvement. President Trump wants states and others who need federal permits to be able to go to one entity of the federal government, which will then help them navigate the entire process and provide complete transparency. 

The president also wants to create a punishment system for federal agencies that do not deliver their permits and other required documents on time. 

We should applaud this as a good, first step toward deregulating infrastructure construction. However, the president then needs to tackle the regulations themselves, something he has said he wants to do. If he does, Wyoming will be in a good position to rapidly and efficiently do all the necessary work on I-80 to both improve and fund our state's main thoroughfare.

As an example of what problems federal regulations cause, for almost 15 years North Carolina has been considering expansion and other improvement projects to its stretch of the I-95. Their responsibility for that interstate is about as long as the New Jersey Turnpike. When construction started on the Turnpike more than 65 years ago, it took four years from scratch to letting the first cars through its toll booths. When the state of North Carolina first considered its I-95 improvement projects, the construction time - which again is about improving an existing interstate, not building a new one - was estimated at fourteen years. For a similarly long stretch of highway.

Hopefully, our new president can help drastically shorten such ridiculous project times. This would make many projects worth considering, including, again, improving and tolling the I-80 here in Wyoming. 

The key issue, of course, is the toll part. If we are going to put tolls on I-80, we better make sure we do it as part of a simple, transparent and efficient funding model. More to the point, the toll must lift the I-80 out of the state's budget entirely. This relieves Wyoming taxpayers of the responsibility for a stretch of interstate where daily traffic volumes are expected to double in the next decade. It also means that we can invite private partners to operate the toll road, a model that has been tried elsewhere with good results.

Let us analyze the public-private partnership model in more detail at a later point in time. For now, the key part of this issue is the tolling and funding of an improved I-80. This is also an issue in North Carolina - explains the NCDOT study for expanding the I-95:
Based on funding strategies used in other states for transportation projects and input provided through stakeholder interviews, several new funding options will be explored. The new funding options were divided into three groups: 1. User fees; 2. Special taxes; and 3. Value capture
"Value capture" is an abstract microeconomic term for funding certain types of government operations, once awarded a Nobel Memorial Prize in economics. Let us leave it aside for now. The North Carolina study explores a funding model that includes about a dozen different funding sources. The study does not intend for all of them to be in place simultaneously, but the very fact that their approach is broad-based and open to all sorts of alternatives in funding is in itself a problem. It leads to a convoluted, bureaucratic process for funding infrastructure, where the cost is spread out over many sources and thereby makes it easier to maintain costly, inefficient government operations. 

One of the specific problems with the North Carolina study is that they are considering adding new funding options on top of existing ones. This includes tolling, which then would fail to deliver the improvement to the state budget that we here in Wyoming so desperately need: relief for taxpayers, not an increase in cost of living. 

In addition to tolling, one the ideas discussed is an alternative to the gasoline and diesel taxes, not as a genuine alternative but as an amendment to the existing taxation of motor fuels. Regardless of what term is used, this new tax is a mileage tax where a vehicle is burdened with a tax depending on how much it is driven every year. The gasoline tax used to be a reliable tax on how much people drive, but since our federal government began enforcing increasingly ridiculous fuel economy standards on car manufacturers, gasoline consumption has fallen quite a bit, measured per mile driven. (The fact that we also have roads filled with lethal tin boxes packing high-voltage batteries is an unrelated but noteworthy consequence.) As a consequence of rising miles-per-gallon numbers, governments around the country can no longer rely adequately on motor fuel taxes to pay for highway maintenance.

Instead of finding one other source of funding, we now risk a multi-pronged and therefore complicated, burdensome and non-transparent funding model. It is essential that any proposal for tolling the I-80 in Wyoming be based on the premise that it be funded by one source only, namely tolls. If that turns out to be entirely unrealistic, then we should amend the funding model based on the principle of enumeration - and transparency.

One last wish: if we are going to toll the I-80, can we please add lanes for free speed, weather permitting...?

My compliments to WYDOT for resuming the discussion about highway tolls. This is definitely an issue we will have reasons to come back to, especially to discuss the public-private partnership idea.

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