February 2020 The Roemer Report

For Whom the Road Tolls: ATRI Study reveals tolling least effective method for funding US highways

It’s true, commercial trucking is not paying it’s fair share for using the nation’s toll roads—we apparently are paying way more than our fair share, and for whole lot more than roads.

Overreaching on the agenda

Demonstrating governing America’s agenda of overreach with real data, American Transportation Research Institute (ATRI) released new research documenting the collection and distribution of $14.7 billion in US toll revenues, representing 82 percent of total US tollway collections.

According to ATRI the research shines a bright light on the tolling’s misrepresented unfair “taxation” of the industry, including the institute says is “how much toll revenue is generated versus reinvested in toll facilities, and contrasts truck-generated toll revenue versus truck utilization of toll roads.”

Let’s take a look at the numbers

Identified as the top research priority for the industry by ATRI’s Research Advisory Committee in 2019, researchers collected public financial data from Comprehensive Annual Financial Reports (CAFR) published by toll systems then standardized financial comparisons across systems.

ATRI’s key metrics covered toll facility charges by user type, toll facility expenditures and toll revenue diversion to non-toll entities.

Shocked, I tell you, shocked

If you are shocked by what ATRI’s research found your name just might be Rip Van Winkle. ATRI’s analysis found that the 21 major toll systems analyzed collected more than $14.7 billion in revenue with nearly 50 percent of toll revenue diverted to other uses. In addition, toll revenue increased more than 72 percent over the last decade compared to inflation growth of just 16.9 percent.

Based on available information, it was found that commercial vehicles generated more than one-third of a billion transactions (377,547,037) in 2018 at 19 out of the 21 locations. The data reveals that the average paid per transaction was $10.22.

According to the analysts, for light-duty vehicles, more than 5.1 billion transactions occurred (based on the review of 2018 CAFRs) with an average paid per transaction of $1.84.

ATRI concluded commercial vehicles pay approximately 550 percent more per transaction than light-duty vehicles!

The excess revenue ATRI points out, is diverted in a number of ways based upon the individual agency or state that supervises the toll entity. “The magnitude of diversion and the lack of standard practice with regard to revenue diversion speaks to the disjointed control under which toll entities operate,” said the report and stating the obvious.

Through traditional taxes and fees, the industry is estimated to pay 14.6 cents per mile in exchange for the use of public roadways. To drive 100 miles at this rate would cost $14.60. A truck that logs 100,000 miles annually might pay nearly $15,000 in taxes for the use of highways – a significant contribution. Toll facilities are, on average, three times more costly than traditional funding, and typically the toll fee is collected on top of the traditional taxes contributed by the trucking industry.

Commercial intercourse, Pennsylvania?

Pointing out how one toll authority is bending truckers over … something , ATRI offered a brief case study for why the trucking industry has growing concern over tolls.

In 2019, and according to the record, the Pennsylvania Turnpike Commission approved a 6 percent toll rate increase to keep pace with rising debt- service costs. This increased the cost to travel the east-west length of the Turnpike to $422 per trip ($293 for E-Z Pass) for a truck.

The Commission, explains ATRI, “self-approved” the hike because Pennsylvania legislators first passed Act 44 in 2007 which “required the [Turnpike] to provide PennDOT with $450 million annually for highways, bridges, and public transit” and later passed Act 89 in 2013 which redirected that full $450 million to mass transit.

The Pennsylvania Turnpike Commission states that due to these Acts, it “has been forced to raise toll rates for 11 straight years and has driven the agency’s debt levels to more than $11 billion,” and even suggests that the Turnpike “needs to provide relief to its customers.”

As a result, ATRI found truckers (many of whom are engaged in interstate commerce in primarily rural areas, noted analysts) are burdened with “significantly higher” toll expenses and a major source of funds urban mass transit projects.

Well, well beyond

Without equivocation ATRI explains “the costs of using the Turnpike clearly go well beyond the services provided by the very fact that $450 million (or 37.6 percent of revenue) is diverted to mass transit.”

Though the Pennsylvania Turnpike situation is arguably unfair to trucking, such examples have not deterred states from pursuing toll revenue from the trucking industry.

    Ultimately here are the conclusions

    Not only telling of ATRI’s recent activism, the report reveals the very deep and very real concerns the industry has regarding its rights and responsibilities in the sector and it essential role in the US economy. Ultimately, ATRI’s report offers these five conclusions:

    1. Equity issues related to current tolling practices will continue to exist If toll facilities are to be operated as a profit center for the given governmental or private entity.

    2. The use of tolling requires additional governance and oversight to ensure reasonable cost standards: Users of toll systems should have a reasonable expectation of proper oversight.

    3. There is a lack of standards for financial and accounting reporting and major questions remain as to how well standards are applied by toll entities.

    4. Tolls remain an ineffective means of funding highways. Additional revenues, in general, are not going toward costs.

    5. Tolling has a significant impact on trucking industry financials and a direct effect on the industry’s commercial and competitive health.

    ATRI’s report digs deep and what it found was much of the usual swamp, occupied by the usual creeps and bottom dwellers, seeking a utopia of civic justice and utility that’s just not going to be sustainable if all they are going to do is scheme of new ways to pick American Truckers pockets. Visit the link below to get the full report, but before you read it, take an antacid – it’s going to make your guts churn.