Funding shortfall for US Interstate upgrades

Andrew Bardin Williams investigates tolling on the federal Interstate system as maintenance and upgrade requirements increasingly outpace funding

The I-95 corridor through North Carolina is one of the most heavy trafficked interstates in the US, seeing upwards of 46,000 vehicles per day in some stretches-and North Carolina’s Department of Transportation (NCDOT) estimates this number will to rise to 98,000 vehicles per day by 2040.

Along with the rest of the federal interstate system, the North Carolina stretch of I-95 was built in the 1950s and has rarely been upgraded since. According to NCDOT, the state has spent $110M on upgrading one 35 mile stretch, but the rest is largely untouched, leading to hazardous road conditions that impact traffic and safety.

In short, North Carolina’s 182 mile stretch of I-95 is a mess and poses major safety, security and economic problems, but the amount of money required to upgrade the entire roadway is beyond the means of the state – even with its allocated funding from the 831 Federal Highway Administration (FHWA).

The story is the same across the US. As the nation’s ageing interstate system continues to crumble and federal funding for maintenance and upgrades remains stagnant, states are increasingly looking to alternative sources for funds.
Long a non-starter for political reasons, tolling of interstates has become an increasingly viable and in some cases attractive option for funding maintenance. Three states – Virginia, Missouri and now North Carolina – have received a federal waiver to implement tolling on federal roadways through the Interstate System Reconstruction & Rehabilitation Pilot Program. Success in those states promises to extend the tolling conversation to other transportation agencies, radically changing the way the interstate system is funded, maintained and upgraded.

Building a case

Once a transportation marvel of the modern world, the US interstate system is in critical need of repair. The 5515 American Society of Civil Engineers (ASCE) recently gave the country’s road infrastructure a D grade – dangerously close to failing. Bridges and tunnels are crumbling, traffic is horrendous and motorists are paying the price. ASCE estimates that poor road conditions cost US motorists $67Bn a year in repairs and operating costs – almost $333 per year for the average motorist – and roadway condition is a factor in one-third of all traffic fatalities. ASCE estimates that $186Bn is required annually just to maintain the country’s roadways-more than double what is currently being spent by federal, state and private transportation agencies. A complete upgrade to meet existing traffic volume, road condition requirements and bridge standards would be in the trillions of dollars.

On the 182 mile I-95 corridor in North Carolina, roadway conditions are rated well below average by the state DOT, and 12 of the 192 bridges on or across the freeway are rated poor while only 18% are rated as good. A number of additional bridges are rated functionally deficient due to not meeting federal height requirements and a number of exit ramps and curves are also deemed deficient because of dangerous or outdated engineering.

In an effort to get its head around what needs to be done to improve conditions on the roadway, NCDOT compiled a comprehensive traffic planning, road conditions and environmental impact report. Dubbed the ‘I-95 Corridor Planning & Finance’ study (available at driving95.com), NCDOT determined that it would take $4.5Bn to fully upgrade the freeway from South Carolina to Virginia with projects ranging from adding lanes, rebuilding bridges and repaving roadways. Current federal funding would cover a small fraction of that cost, and due to a state law is required to be distributed evenly among the state’s counties.

“Given our funding situation it would take us 65 years to complete the upgrade to the entire I-95 corridor,” says NCDOT communications director Greer Beaty. “We simply couldn’t wait that long.”

Knowing full well that requirements would dwarf available funding, the state included alternative funding options in its assessment study, including tolling and raising the state gas tax. After calculating that a one cent increase in the gas tax equals $50M – essentially a drop in the bucket – raising the tax was deemed to be a non-starter. The state then started to look at tolling and its ability to raise enough funds to complete the upgrades.

NCDOT then sought to collect feedback about potential tolling deployments from the public through a public education campaign. According to Beaty, driving95.com was set up to share traffic, environmental and safety reports, improving transparency and educating the public about potential plans.

Project timelines were published and feedback was encouraged by listing schedules and locations of hearings.

According to a poll the DOT conducted throughout 2011, motorists cited traffic as their greatest concern with more than 50% of the vote. Potential tolling came in at less than 3%. Their priorities were clear.

In February, the FHWA accepted North Carolina into the Interstate System Reconstruction & Rehabilitation Pilot Program, allowing the state to move forward with its plans to implement tolling along the I-95 corridor. Created in 1998, the program was set up to allow states to consider tolling on the federal interstate system and use the funds to maintain and upgrade the roadways. Current federal law prohibits states from tolling federal roads unless they were grandfathered in.

At first, no states even applied for the waiver. The program was rewritten the following year with the stipulation that the offer was open-ended, and states could apply until the three spots were taken by Virginia, Missouri and North Carolina. It took six years for a state to be accepted into the program when Missouri gained permission to implement tolling on I-70. Virginia was accepted several years later in September 2011.

Luckily, unlike most states outside of the Northeast, North Carolina already has tolling experience after building new toll roads on state highways 540 and 147 near Durham. According to Beaty, the roads needed to be built but there was no state funding available. Tolling was the only available option. Expecting lukewarm acceptance, the transportation agency budgeted that it would sell 500 to 1,000 transponders to motorists. However, more than 11,000 transponders have been sold in six months. Phase two of the project will open in August this year and phase three will open in December. Beaty says that the success of tolling on the state highways – North Carolina’s first toll roads – will serve as a best practice demonstration for the I-95 tolling project.

“If you do the research and have the right volume of drivers, it can make financial sense to use tolling,” she says. “The initial research is essential, as is ensuring the public has bought into the idea.”

Tolling gives funding Flexibility

Currently, 3,100 miles of the 48,000 mile federal Interstate system are already tolled, mainly in the Northeast where existing toll roads were incorporated into the system. Upon construction of the interstates in the 1950s, toll roads were prohibited, legislatures intending for the federal gas tax to provide most of the necessary funding for maintenance and upgrades. According to Pat Goss, cofounder of the US Tolling Coalition, FHWA funds provided 90% of required maintenance funding 50 years ago. However, due to rising costs and a political unwillingness to boost revenue, that _ gure is now less than 50%.

Seeing a need for a national advocacy group, Goss co-founded the Tolling Coalition to encourage implementation of toll roads for filling the funding gap. Founded in 2011, the coalition now has representatives in 25 states. The group relies on grassroots advocacy, putting pressure on Congress and state legislatures to consider tolling as a viable funding source for road infrastructure construction and maintenance. According to Goss, he is currently working with Congress to address tolling in the next reauthorisation bill.

Getting politicians to embrace tolling is one thing. Public approval is another. According to the 63 IBTTA’s (International Bridge, Tunnel & Turnpike Association) director of government affairs Neil Gray, tolling has traditionally gotten a bad rap with motorists. Many tend to think that tolls should be lifted once the capital expenditure to build the roads is recouped. However, what they often fail to appreciate is the need for funding of ongoing maintenance and upgrades to prevent roads from falling into disrepair-which is what has happened with the Interstate system.

The key, according to Dave Gehr, a senior vice president and tolling expert at Parsons-Brinckerhoff, is to educate the public on the needs and benefits of tolling.

“With tolling there’s a correlation between using the roadway and paying for maintenance and upgrades,” Gehr says. “It’s a little bit easier for motorists to swallow this. Drivers who don’t want to pay don’t have to use the roads. The gas tax requires people to trust that the government is going to spend their money fairly and wisely.

That’s a tougher sell.”

Pat Goss sees tolling the Interstate system as a states’ rights issue. If federal funding is not available to adequately maintain the roads, then states should have the funding flexibility to come up with revenue on their own. “States should have a spectrum of options available to rebuild a decaying federal interstate system,” Goss says.

“Unfortunately, outside of a few exceptions, their hands are tied.” As tolling gains traction, there have been some rumblings between state DOTs and FHWA about where and how generated revenue should be spent. Some states feel it is important to keep income on the roads where it is collected, while others want the flexibility to be able to transfer toll revenue to other projects. Another debate is happening around whether federal funds originally intended for a now-tolled road can be shifted to other federal roads in the state.

There is another alternative to implementing tolling on the Interstate system: toll lanes. According to Gehr and his colleague Victoria Kelly at Parsons-Brinckerhoff, several states have successfully converted High Occupancy Vehicle (HOV) lanes to HOV tolling lanes. Gehr and Kelly cite ongoing projects in California, the Washington DC area, Minnesota, Connecticut and Georgia.

“Lane tolling allows a good toe in the door,” Kelly says. “Motorists can use the free lanes or pay for a faster, more reliable trip. It improves service for those who want to pay without diminishing service for those who don’t.”

Both Kelly and Gehr stress that technology is key to widespread implementation of tolling. Interoperability will allow motorists to drive the length of the east coast and eventually the whole country without paying more than one toll bill. Allowing drivers to pass through toll plazas and exit ramps without stopping would improve the perception of tolling. According to Kelly, people still visualise stop and go traffic around toll booths, making it a tough sell for the public. She says that a solid public education campaign is necessary to change attitudes.

 North Carolina’s public-facing website is one way the state is attempting to ensure transparency and gain public buy-in. The DOT plans to gather feedback through public hearings through February, and concerns will help shape specific tolling deployment plans along I-95. Already, public concern and lessons learned from previous tolling deployments has led NCDOT to focus on freeflow tolling using transponders for local customers and bill-by-mail for out-of-state motorists. Once implemented, the DOT will be able to reliably and accurately bill motorists passing toll points at highway speeds – an important factor in the public’s eye. By listening to motorists and involving them in the process, the state can help to ensure a successful tolling implementation for funding improvements along a notorious stretch of highway.

“North Carolina makes its decisions based on facts and data, not politics,” Beaty reiterated. “The fact of the matter is that we need to make these road improvements not in 60 years but now. Tolling gives the state the funding flexibility to get this work done in a reasonable amount of time.”

• Information on the Interstate System Reconstruction & Rehabilitation Pilot Program including the Missouri and Virginia projects can be found at http://%$Linker: External 0 0 0 oLinkExternal ops.fhwa.dot.gov/tolling_pricing/ interstate_rr.htm tolling pricing false http://ops.fhwa.dot.gov/tolling_pricing/%20interstate_rr.htm false false%>.

The experts’ predictions on the future of tolling

“I’d like to see the pilot program expanded to at least 10 states so that tolling could be used in conjunction with federal and state gas taxes. Otherwise, we could see parallel state routes being built alongside federal interstates.”

Neil Gray, IBTTA

“Chairman Mica’s transportation bill is a good start for tolling, but it doesn’t go as far as we’d like. There are several amendments that would further the conversation. It’s good that politicians are realizing that states need options to take care of their infrastructure.”

Pat Goss, 5514 US Tolling Coalition

“I think there’s definitely going to be a heightened debate in the next 12 to 18 months about the advantages and disadvantages of tolling as an alternative to funding infrastructure improvements. The fact that we had a pretty competitive last round of the pilot program is proof that states are seriously looking at tolling.”

Dave Gehr, Parsons-Brinckerhoff

“As states see their neighbors implement tolling successfully, there will be a big increase in interest. Interoperability between states will also be big in the next four to five years. Motorists are going to be able to drive up and down the east coast and pay a single tolling bill.”

Victoria Kelly, Parsons-Brinckerhoff