It’s blindingly obvious that Arizona has a transportation problem. East Valley drivers don’t need to be reminded that the average local commuter wastes 38 hours each year stuck in traffic.
Traffic congestion costs Arizonans an estimated $2 billion yearly in lost productivity and fuel costs.
How can this be? How can an economy that, even in our present circumstances, provides nearly all of us with abundant food, clothing and flat screen TVs be so inept with transportation infrastructure that we wait in long lines when we drive our cars?
The short answer is that we cling to our outmoded, top down, exclusively government-oriented ways of thinking about transportation funding. The proposal of the former Napolitano administration’s TIME coalition, which nearly made it on the ballot last year, (its backers vowed to bring it back) illustrates the problems with the traditional approach.
Typically, funding decisions for government projects are made based on politics rather than market demands. Of the $42 billion in revenues that would have been generated by the TIME proposal, only $24 billion would have gone to road construction, even though area residents overwhelmingly prefer the convenience and flexibility of automobile travel and every limited access road in the Valley is projected to be over capacity by 2020.
Seven billion dollars would have gone for trains, a darling of the planning elites, even though transit usage continues to plummet nationwide and rail is by far the most expensive way to move humans around. More billions would have gone to “enhancements” and to favored environmental groups.
The other flaw in TIME is that it was to be funded by a retail sales tax. This has even less logic than a fuel tax, because this scheme completely disconnects funding for infrastructure from utilization. Why should someone buying a computer to work at home pay a sales tax so road use can be “free” for frequent users? Taxation levels are already too high for our faltering economy. It’s no mystery why government road construction is always too little, too late and costs too much.
Here’s some good news. Twenty-one states have passed legislation permitting public-private partnerships, also known as P3, to access the $400 billion in private capital estimated to be available for transportation projects.
A good example of the new paradigm is the I-95/395 HOV/Bus/HOT project built in Virginia with over a billion dollars of private funds. This project supplies 56 miles of additional reversible lanes to a chronically congested roadway. Twelve bus stations and 3,000 park-and-ride spaces were added since buses and carpools use the lanes for free, while other drivers pay variable tolls. The private builder even included a $195 million transit subsidy for the privilege of operating the project.
Tolls are the sticking point for many drivers, who object to paying for services which were previously free. But tolling not only can enable projects to be built which otherwise would not be, they are the most rational way to manage traffic congestion.
Half the drivers of the roadway during rush hour aren’t going to work, a quarter are retired. In economic terms, they’re overutilizing an expensive commodity because it’s not priced correctly. It would be wasteful to attempt to accommodate all the drivers who drive during rush hour because it’s free.
Modern technology can allow tolls to be billed automatically based on the license plate of the user and to be adjusted in real time to assure that toll lanes are optimally utilized. Drivers not using the toll lanes benefit too from the reduced congestion.
Moreover, governments in P3 projects can simply write into the contracts maintenance requirements, the amount and duration of tolling and even minimum speeds in tolled lanes. Private operators are incentivized to provide those services that are most valued and to treat the driving public as customers.
P3 and toll roads aren’t the total answer and will never be more than a small part of our total transportation picture. But there’s no reason to delay harnessing private capital to build badly needed roadways and help Arizonans get around without raising taxes.