A recently released study concludes that Pennsylvania’s plan to toll Interstate 80 would burden taxpayers and potentially cost thousands of jobs. Grove City College economics Professor Tracy C. Miller’s analysis extended beyond the simple issue of how much money such tolling would raise for government coffers and, instead, attempted to quantify the effect of increased transportation costs on local businesses and residents. I-80 runs 311 miles across the state, serving as a vital commercial link between New York and Chicago. Pennsylvania Governor Edward G. Rendell (D) has been promoting the tolling effort in the hopes of generating $405 million in new revenue. Rendell and others refer to the toll as a “user fee,” but Miller disagreed with this characterization. “It is better understood as a tax or tariff, since much of the revenue will be used for purposes other than maintaining and improving Interstate 80 and since vehicles that use Interstate 80 already pay for using it via fuel taxes and other taxes,” Miller wrote.
Owners of commercial trucks that operate on I-80 already pay a $1600 registration fee, a $550 highway use tax, a twelve-percent tax on the purchase of a new truck and a 38.1 cent tax on diesel fuel. These existing taxes add up to $90 million a year, based on the number of trips taken by truckers on I-80. Taxes paid by automobile drivers bring the grand total in taxes raised by I-80 to $130 million, yet the Pennsylvania Department of Transportation only spends $80 million on I-80 maintenance.
Toll supporters also assert that their plan primarily affects out-of-state motorists and truckers who are merely passing through, but Miller’s report shows that industries central to the health of Pennsylvania’s economy would be harmed. The report predicts loss of tax revenue, job losses, depressed property values and higher costs of goods would follow the increased cost of shipping goods across the state. Trucking, for example, is one of the state’s most important industries.
“A toll of 31 cents per mile would increase the non‐labor variable costs of operating a truck by just under fifty percent relative to its current level,” Miller explained. “If the additional cost of shipping on alternate routes averages half the cost of tolls, then in addition to the $292‐$310 million that truckers will pay in tolls, shippers, consumers, and truckers combined will suffer deadweight losses of between $8 and $15 million per year.”
Businesses that face increased costs in a competitive market that does not allow increased prices would either be forced to cut wages, fire workers or relocate. For example, depending on the proximity to processing centers, milk farmers in various counties would see shipping costs increase between 3 and 12 percent. Truck stop and restaurants near the highway would see a ten-percent cut in business as motorists divert to alternate routes. Miller also cited the example of Weis Markets, a local grocery store chain with 126 Pennsylvania locations, which estimated the tolls would cost the company $1 million a year.
“In such a highly competitive industry, even a relatively small cost increase resulting from tolls may be enough to cause firms to move their warehouses and distribution centers to a different location,” Miller wrote. “Other firms that may have considered building warehouses near 80 may build elsewhere because of tolls.”
Residents will also feel the effects as the value of land drops near the toll road.
“Basic economics teaches that property values and thus property tax revenue will decline in counties near Interstate 80, unless counties and school districts raise tax rates by an offsetting amount,” Miller wrote. “The size of the decline in property values should reflect the lower expected earnings of firms and workers in counties along Interstate 80 combined with the higher cost of living to commuters and others who travel along it regularly.”
Miller concluded that a much better alternative to an inefficient tolling system would be to raise the gas tax by 10 cents to raise $600 million. The net effect would be to raise the cost of driving by 0.5 cents per mile for an average automobile and 1.5 cents for truckers. By spreading the tax statewide, there would be no negative effects from traffic diversion.
A copy of the study is available in a 500k PDF file at the source link below.
Source: 
I‐80 Tolling Impact Study (Professor Tracy C. Miller, 10/12/2009)
[courtesy thenewspaper.com]
You know what really grinds my gears?
Bureaucracy is awfully short-sighted. Every time a new governor takes office in New York (I’d say elected, but our current one wasn’t; worst governor ever), the native Americans get in a tizzy because every new governor wants to force them to charge and pay taxes to the state, neglecting the fact that their businesses (fuel, tobacco, and casinos) would die nearly instantly as a result. The state projects the tax revenues assuming that everyone would stop at reservations for gas and smokes just as much as they normally would regardless of price — we buy their wares because they are significantly cheaper, New York Government.
…that reminds me, I need to get some propane tanks filled — it’s actually cost effective (even with a gallon of gas, I’m still saving $17 or so) for me to drive 15 miles each way for that errand, rather than get them filled in town.
“Basic economics teaches that property values and thus property tax revenue will decline in counties near Interstate 80, unless counties and school districts raise tax rates by an offsetting amount,” Miller wrote.
When was the last time a politician understood basic economics? I’d say it’s been a while.
To the residents closest to I-80 this is a double whammy — they get “taxed” to use the main thoroughfare closest to them, and would be hit with higher property taxes. Nice.
I had the idea that anyone with Pennsylvania plates and registration uses the road for free but out of state people must pay a toll. But that idea is stupid.
If they do institute a toll on I-80 in PA, anyone want to predict how long it will be before another pol gets the bright idea of leasing the toll collection to a private firm?
2 weeks?
This is interesting. I-80/90 in Ohio is a toll road. However it is run by a private company, and it is one of the nicest roads I have had the pleasure of driving on. The problem with the Pennsylvania example is that the state government wants to take a road that is currently public, and charge a tool. One would reason however, that the maintenance on this road would stay the same even with this new toll be added.
I80/I90/I76 in Ohio, forming the Ohio Turnpike, was funded originally in the 1950s via bonds, which were to be repaid over time via tolls by the 1970s, after which time it would be free.
The state has decided to take that promised temporary toll and keep it a toll road forever, thus proving the notion that once they get their hands on a revenue stream they will never ever give it up, no matter what they had previously promised.
This is a big issue in PA.
The original plan called for millions of dollars going to the Philly public transport agency even though they have a surplus in the bank. Tolls would pay for bus service in Philly basically.
The toll booths would snap your plate and mail you a bill. Huge issue with privacy and the toll takers union was outraged when they discovered few new union jobs for them.
This is a gateway to toll roads all over the state. It’s no secret Rendell wants a New Jersey style system of toll roads milking commuters with no other options to get to work.
Casinos didn’t cover property taxes for homeowners as promised so this is the new panacea.
In the end the Feds built the road and have final say. Virginia has tried to toll 64 for years and no dice. Hillary Clinton promised Ed she would turn on the Toll ATM for him and he supported her. Barry isn’t interested as much.
They tried to sell this as free to the locals but not to out of state. That is going to get them in trouble because of interstate commerce rules. You really can’t exempt locals from a toll on a federal highway that we all paid for, so the rest of the US gets to pay for it twice.
I live in Oklahoma, the toll road capital of America. For many years I have thought our toll roads were an obstacle to progress in this state. The first turnpike from Oklahoma City to Tulsa was built in the 1950s and supposed to be free once it was paid for. The toll for that 100 mile road is currently $4.00. The revenue from this road has been used to finance numerous other toll roads in Oklahoma that aren’t profitable. We rarely go to Tulsa, but often drive to Dallas as there is no toll on I-35. In my opinion, Tulsa, Oklahoma City and all the cities between have suffered economically because of the ever-increasing turnpike tolls. In contrast, the original Dallas-Fort Worth turnpike has been a free road for many years and the DFW metro economy seems to be much more vibrant.
ronin: “I80/I90/I76 in Ohio, forming the Ohio Turnpike, was funded originally in the 1950s via bonds, which were to be repaid over time via tolls by the 1970s, after which time it would be free.
The state has decided to take that promised temporary toll and keep it a toll road forever, thus proving the notion that once they get their hands on a revenue stream they will never ever give it up, no matter what they had previously promised.”
My point was that it is a better road. I’m still principally against this.
If you want to raise X amount of $, it is far cheaper and better to just add a few cents to the price of gas.
Tolls are really idiotic in cities like NY where almost 100% of the congestion at the G W Bridge is due to the stupid tolls and thousands waiting to pay them. Even with modern E-pass systems, not everybody uses them.
I frequently have to use the PA Turnpike to go to and from Wash DC. As long as i remember, the tolls were more than the gas I used with any of my cars! But they were always business reimbursed trips and I could care less, somebody else was paying them.
segar925: I’m in the same boat as you, but don’t kid yourself: We go to Dallas instead of Tulsa not because of the tolls, but because once we’re in Tulsa…we’re in Tulsa.
I have to agree with the article, however. Tolls on any road can cost jobs. But I can also argue that raising fuel taxes or registration fees or any tariff will cost jobs. The real problem here is that everyone want the government to spend money, but no one wants to contribute.
The price of wine in Paris, when the French provinces and town between vineyards and consumer were allowed to impose tolls, was 8 or 10 times the price at the vineyard, and the differential was all tolls.
Never mind jobs, tolls hammer the consumer.
[Comment trolling — Edited by Staff. Strike I]
Toll mania is a direct result of the problem people seem to have with raising gas taxes. If gas taxes where increased simply at the rate of inflation there would probably be plenty of money to take care of the roads with. The federal gas tax hasn’t been increased since 1983.
Guess which President supported the 1983 increase? Ronald Reagan. He signed onto it as necessary to keep up with building and maintaining roads and bridges. Contrary to his mythical being, the real Ronald Reagan sometimes supported tax reductions and sometimes supported tax increases; depending upon the particulars of the situation.
Delaware Turnpike (I-95). From New Jersey to the Maryland border. $3 bridge toll and a $4 road toll. It’s $7 frickin dollars for 8 frickim miles of road! And while those who frequent it know the local roads around the toll, most I-95 travelers won’t. As bad as NJ, or NY or the proposed PA tolls are, nothing even comes close in bang for you buck government assrape than the Delaware toll system.
As a former Pennsylvanian and Grove City graduate (class of ’79) I’m pleased to see Professor Miller’s analysis. However, no one seems to be asking a larger question:
What right has the state of Pennsylvania to build toll booths on I-80?
The road was built and paid for in large part by the tax dollars of United States citizens from all fifty states. I see no justification for Pennsylvania to collect tolls when it’s not exclusively their road in the first place.
new caledonia
Interesting point, but you already have the tolled NYS Thruway system to the north. How was that justified? Although, your $7-8 gets you from one side of the state to the other – Albany to Buffalo, just like Delaware for the same approximate dollars, except you’ve gone 300 miles +/- rather than 8……
If we are to avoid tolled Interstates, then we need to collect more Federal gas tax, and use it exclusively for road projects – no bikeways, no light rail, etc.
I have to agree with new caledonia, the state has no right to take a road paid for with federal highway dollars and turn it into a new revenue source. This would be a real abuse of power, but not surprising considering every other abuse of power governments get away with nowadays.
Delaware Turnpike (I-95). From New Jersey to the Maryland border. $3 bridge toll and a $4 road toll. It’s $7 frickin dollars for 8 frickim miles of road! And while those who frequent it know the local roads around the toll, most I-95 travelers won’t. As bad as NJ, or NY or the proposed PA tolls are, nothing even comes close in bang for you buck government assrape than the Delaware toll system.
Delaware doesn’t get the bridge, talk to the bridge authority. As to the 95 toll, just go around it like us natives do. Takes about 4 minutes.
But we do appreciate your paying for the congested roads we put up with all year long and traffic by having the poor fortune to be located at the crossroads like this.
Delaware doesn’t divert the money to pension plans for transit workers or other pet social projects like PA plans to do. It goes for that big 8 lane road you drive the 8 miles on and the huge lane expansion project between 95 and the Delaware memorial.
And oh, BTW they doubled our vehicle registration fees to pay for this too, even if we never drive on it. So quit whining.
@chuckR —
The New York State Thruway was built as a toll road in the first place, rather than as a toll-free road that was later “tolled.” It’s the “taking” of a non-tolled road to which I object.
John Horner :
October 17th, 2009 at 10:41 am
Toll mania is a direct result of the problem people seem to have with raising gas taxes. If gas taxes where increased simply at the rate of inflation there would probably be plenty of money to take care of the roads with. The federal gas tax hasn’t been increased since 1983.
Guess which President supported the 1983 increase? Ronald Reagan. He signed onto it as necessary to keep up with building and maintaining roads and bridges. Contrary to his mythical being, the real Ronald Reagan sometimes supported tax reductions and sometimes supported tax increases; depending upon the particulars of the situation
Believe it or not there was a time when rational decisions were made in America regarding how we move around this country, Eisenhower showed us the interstate highway system and we made the move due to low cost fuel (gas-diesel) to ride for free on our new interstates with a low fuel tax and rail suffered because it was cheaper to load semi’s with 40,000 pounds of goods and deliver them to the doorstep of their final destinations.
You left your house and got on the interstate and traveled with no tolls and our roads were repaved and maintained with taxes on the fuel our vehicles required.
When we were presented with the fact that it was not all about the quality of the road surface and the bridges and culverts required replacement over time and our government (Washington) was made up of people who were more concerned about getting reelected (power) and raising taxes was something they, be it gas or other, knew would assist them in getting reelected and they took the easy way out. Rather then justify and explain the reasons for raising taxes for maintaining our highway system, they slid in under the radar a toll road here and a toll road there. Those states that that refused toll roads were left in a position of letting our roads get so bad that when the publics requests for this or that they saw as worthy to make travel better were done.
In politics it is better to be behind the curve than ahead of it.
So here we are, everything associated with roads needs more money. The people responsible are still looking to get reelected so rather than justify increased fuel taxes, they build some toll booths and collect the money as you drive through rather than man up and tell us that we need to pay more per gallon to maintain the highways and infrastructure we use every day.
We as a country, need to grow up and make mature decisions and realize that there is no free lunch.
Tollway authorities inevitablely become their own “reichs” with little or no oversite. The expense of toll collection, administration, benefits and pensions is money NOT spent on concrete and steel.
Increased fuel taxes gets the most bang for the buck and helps to insure ALL roads and bridges get needed improvements. As I drive around the country, the disparity between states and esp. those with large cities is amazing.
75% of the money collected from the tolls on bridges between Philly and NJ is spent on salary. The DRPA runs the bridges and collects millions from motorists with little choice but to pay. They also fund social programs on both sides of the river that have nothing to do with maintaining the bridge. They now cry for a rate hike every year to fix the broken bridge, having let maintenance slip for years everybody fears a collapse and like magic a rate increase.
Never mind the 35 million dollars in their kitty, they need an increase now.
I had some government lawyer try to bullshit me on how noble all the road taxes are, how justified and honestly the money is spent. Considering he gets a good paycheck from that trough I guess I can understand his position.
In the end tolls affect behavior. People avoid them, including not taking a job where a toll must be paid daily when a non-toll job exists. One really bad thing about tolls is once enacted they are raised with little resistance. A trip to JFK airport and back will cost you 18 dollars round trip for two bridges.
And to think someone bitched above about 7 dollars for 8 miles
paul_y :
October 16th, 2009 at 7:21 pm
Every time a new governor takes office in New York (I’d say elected, but our current one wasn’t; worst governor ever), the native Americans get in a tizzy because every new governor wants to force them to charge and pay taxes to the state, neglecting the fact that their businesses (fuel, tobacco, and casinos) would die nearly instantly as a result.
That sounds like a basic fairness issue to me. Why should Indians get to skip paying taxes? If I were a non-Indian trying to compete with them, the tax break would grind the hell out of my gears.
GS650G :
October 17th, 2009 at 6:30 am
This is a big issue in PA.
The original plan called for millions of dollars going to the Philly public transport agency even though they have a surplus in the bank. Tolls would pay for bus service in Philly basically.
The toll booths would snap your plate and mail you a bill.
Whoa…stop right there. If that’s the plan for collecting tolls on a heavily traveled highway like I-80, it needs to be fought tooth and nail.
Here in Denver, our loop highway (E-470) has video-enforced unmanned toll booths. I once paid the $.75 toll, and then a few weeks later, got a bill from the toll authority (not the state or county, mind you) for $90 for supposedly skipping the toll, when I hadn’t.
I called their customer service number, and tried to plead my case to the $7.50-an-hour Wal Mart reject who answered the phone, but she shut me down. So I asked her who I could appeal this to. She answered: no one. And then she threatened to have my license suspended over this.
I contacted the sheriff and courts in the county the supposed infraction happened in, and they told me they have no authority over the road (funny, since the sheriff and state patrol hand out plenty of tickets on that road, but I digress). It was all up to the tolling authority.
So I got fleeced for $90, under threat of having my license suspended, with no way of appealing the decision.
How many times does this happen? No way of knowing…the toll authority is under no obligation to reveal statistics to the public, since it’s a private company.
And this is on a lightly-traveled toll road, not a major Interstate highway with hundreds of thousands of cars traveling it, as is the case with I-80.
If your locality tries to sell you on a system like this, fight it tooth and nail. It’s a license to steal.
“Why should Indians get to skip paying taxes?”
Since you asked ….
Treaties and other niceties which go back to the time when the European invaders occupied North America, killed off the majority of the natives and then herded the remainders onto the worst land on the continent. All this was done in the name of God by claiming manifest destiny and/or the duty to save the souls of the “savages”. It is a disgraceful mess which has never been, and perhaps cannot be, adequately dealt with. The various remnants of those old tribes generally enjoy sovereign nation status on their little patches of land and enjoy a handful of “privileges” as a result.
BTW, to the best of my knowledge I don’t have any Native American blood in me and I wouldn’t want to trade places with them.
Too simplistic, John. There were not “Europeans” and “Indians.”
Indians themselves invaded in successive waves over the course of thousands of years. They wiped out the indigenous tribes that were already in place. Go to old mounds and cliff dwellings and earth features now and try to figure out where the builders were. They were wiped out
The area where I live is near Lake Erie, named for the Cat Indian tribe. Where are the Eries today? Well, they were ethnically cleansed, genocided out of existence by the Iroquois, as were other small tribes.
The US government was disgraceful in its treatment to Indians and its violation of treaties, but consider that even with Crook and Custer the Sioux/Dakota/Lakota were invaders. The Crow around the Little Big Horn found common cause with the US Army, since the Sioux came over as invaders from their historic homeland in the upper great lakes, all within a decade or two prior to Custer’s last stand.
The reason a few hundred Europeans took over Central and South America was because millions of Indians joined forces with them to overthrow the tyrants. They may not have liked the Europeans, but they hated their native masters even more.
Repeatedly brave men and women missionaries not only taught reading and writing skills to stone age Indians, but defended them against their own people, the colonizers. These missionaries risked, and often experienced torture and other deprivations by the natives and by their bosses. They were arrested by Spanish overlords for speaking out against maltreatment of their charges. These people were much braver than you or I could even imagine.
History is more complex than political slogans and cartoons.
So if we are to give special treatment, and if special treatment based on the color of your skin or your DNA is appropriate in 21st century America, let’s at least make the distinction with our eyes open.
Repeatedly brave men and women missionaries not only taught reading and writing skills to stone age Indians, but defended them against their own people, the colonizers.
Yes, I’m sure the Mayans and Aztecs are forever grateful that they came to know Jesus Christ.
The Missionaries scattered throughout time in South and Central America, Africa, Australia and many other disasters where functionaries of genocidal Christians.
We have versions of them now, but we call them Fundamentalists.
Whoa…stop right there. If that’s the plan for collecting tolls on a heavily traveled highway like I-80, it needs to be fought tooth and nail.
The local newspapers published it after a leak, I believe around a third of the revenue was destined for SEPTA. There were other piggies at the trough too, in fact tolls from I-80 were supposed to fix other roads and bridges. That’s really noble but the fair way to fix other bridges is with gas taxes that the population pays since they drive over them. The public transportation component was the outrage since SEPTA already gets HUGE subsidies and charges quite a bit to ride their crappy lines. Empty buses in parts of the city belie the lack of planning and oversight needed.
If I-80 was going to be, or needed to be, upgraded in some way tolls might be somehow justified. But hanging an ATM sign out there is wrong. And snapping plates to pay is silly, someone could obscure the plate before getting on in Ohio and reapply the cover (or a fake license tag belonging to the PA governor) on the other end and ride for free.
Whoa…stop right there. If that’s the plan for collecting tolls on a heavily traveled highway like I-80, it needs to be fought tooth and nail.
And snapping plates to pay is silly, someone could obscure the plate before getting on in Ohio and reapply the cover (or a fake license tag belonging to the PA governor) on the other end and ride for free.
What? Taxes costing jobs?! Never! Can’t the government just create all the jobs we need?!
(wink wink)
Can we agree that it’s a gorgeous bridge?
PeteMoran: “The Missionaries scattered throughout time in South and Central America, Africa, Australia and many other disasters where functionaries of genocidal Christians.
We have versions of them now, but we call them Fundamentalists.”
Today’s fundamentalist Christians are working on behalf of genocide? Where and how?
@ John Horner:
Point taken, but that was a long time ago. And, frankly, if we’re into letting ethnic groups skip on their taxes because the government treated them poorly, there are going to be a LOT of people exempt.
And, frankly, the old time “Indians are second class citizens” thing is fading away. I do mortgages for a living, and one of my applicants was a member of the Pechenga tribe, which owns a casino in California. The casino makes so much money that it’s able to distrbute $300,000 annually to each adult member of the tribe. That’s disadvantaged? My ass!
GS650G :
October 18th, 2009 at 9:18 am
The local newspapers published it after a leak, I believe around a third of the revenue was destined for SEPTA. There were other piggies at the trough too, in fact tolls from I-80 were supposed to fix other roads and bridges. That’s really noble but the fair way to fix other bridges is with gas taxes that the population pays since they drive over them. The public transportation component was the outrage since SEPTA already gets HUGE subsidies and charges quite a bit to ride their crappy lines. Empty buses in parts of the city belie the lack of planning and oversight needed.
I don’t have a problem with raising money for mass transit per se, particularly SEPTA. If there ever were a city that needed all the mass transit it can get, it’d be Philly. Their freeway system is an absolute joke – the main east-west freeway (the Schyulkill) has four lanes for much of its length – and I can’t even imagine how much it would cost to upgrade it.
Having said that, though, there are better ways to finance such projects than retroactively tolling interstate highways. A sales tax increase or fuel surcharge in SEPTA’s service area would be better ideas. The problem is, of course, that when you start raising taxes, the population will have a hissy fit, which is why state governments have to resort to “back door” revenue enhancers like toll roads to begin with.
I’m all for as much mass transit as we can do. The more mass transit we have, the less congestion we’ll have to deal with, making driving far less stressful.
@ 50merc
Today’s fundamentalist Christians are working on behalf of genocide? Where and how?
Sorry, I mean Fundamentalists of “any” sort, Christians not so much anymore. The Taliban comes to mind.
As a former Pennsylvanian and Grove City graduate (class of ‘79) I’m pleased to see Professor Miller’s analysis. However, no one seems to be asking a larger question:
What right has the state of Pennsylvania to build toll booths on I-80?
The road was built and paid for in large part by the tax dollars of United States citizens from all fifty states. I see no justification for Pennsylvania to collect tolls when it’s not exclusively their road in the first place.
Several years ago there was talk of the Ohio Turnpike Commission taking over US 23 because it needs improvement. The tolls would pay for improvements. But it was decided it was illegal to turn a road built with taxes into a toll road. What happened to this?
John
So it’s not enough that Pennsylvania has their scenic but infamous Turnpike (“Nearly 400 miles of bumps, proudly brought to you by the Tony Soprano Construction Company”) but now they have to privatize the Interstate also? They just want to make sure that nothing and no-one passes through the Keystone state without getting tolled to death.
And if they do toll I-80, you can count on it being pricey. The PA Turnpike tolls are about 50% more per mile than the NY Thruway.
This will really give PA a vice-grip on the nuts of truckers and travelers, since there really aren’t any viable geographic alternatives. Interstates 86 (through the southern tier of NY) and 68 (through Maryland) both require sizeable detours.
So gov’t is broken like Detroit? Looks that way…
Is it possible for any organization public or private to remain effective and efficient once it gets some age and size?
If they do institute a toll on I-80 in PA, anyone want to predict how long it will be before another pol gets the bright idea of leasing the toll collection to a private firm?
I see you’re not familiar with the situation. The entire reason why I-80 is being tolled is because the PTC was able to fight off an attempt to privatize the Turnpike.
The PTC, efficient government institution that it is, couldn’t make a profit with the Turnpike. So to preserve its government monopoly, it’s tolling I-80. (A plan that the Bush Administration rejected twice.)
You might think that government just uses the private companies as a way to shift blame for toll increases, while still pocketing the money. However, the PTC didn’t have to have any such figleaf, thanks to last year’s Act 44.
I-80 being tolled is the fault of the anti-privatization fetishists who would rather have the PTC raise rates and toll I-80 than let a private company pay to toll the Turnpike, and being willing to sign a contract to keep the rates the same. Gotta have those patronage jobs.