Professor and Transportation Finance Expert: Tolls “Inefficient, Regressive Tax”

The Yankee Institute for Public Policy ^ | January 28, 2019 | Marc E. Fitch

[Tolerance Sucks Rocks]

Professor of Finance for the College of Staten Island and Research Fellow at The University Transportation Research Center Johnathan Peters says if Connecticut lawmakers are looking to raise revenue for transportation, they might be better off looking somewhere else besides highway tolls.

“Tolls, generally, are expensive to collect,” Peters said in an interview. “It’s not free. There’s a lot of technology and a lot of equipment, and that equipment will have to be maintained and replaced over time.”

Peters -- whose area of expertise and study involves regional planning and road and mass transit financing -- says tolls are more expensive to collect than the gasoline tax and is a regressive form of taxation that affects lower income individuals.

“This is a regressive form of taxation. This can be very, very painful for a low-income household,” Peters said. “It could be the straw that breaks the camel’s back for the working poor.”

Although 2019’s tolls debate has just begun, it started out with a bang as the newly-elected Democratic senator from Greenwich, Alexandra Bergstein, filed the first bill authorizing the Connecticut Department of Transportation to install tolls on Connecticut’s highways. Bergstein is also chairwoman of Connecticut’s Transportation Committee.

The latest study from the CT DOT posited 82 tolls on nearly every Connecticut highway, combined with a pricing system offering discounts for in-state commuters.

The DOT study estimates the state could take in nearly $1 billion per year in toll revenue, after accounting for $100 million per year in operating costs, or about 10 percent of gross revenue.

Peters says this number “seems a bit low,” and that operating costs typically approach closer to 20 percent.

[nicollo]

So everyone pays their fair share and to a leftist, that is not fair

Exactly.

If the revenue is used 100% for the roads, then tolls are precisely the most appropriate tax. Sadly, and like many taxes, the revenue usually gets diverted to other uses.

NJ Turnpike has largely -- but not entirely -- avoided this trap, which is why it is the most successful, customer-oriented road system in the nation.