They’re not getting it

Earlier in November 2009, I was a guest on a talk-TV show, Goldhawk Live (Rogers). The host Dale Goldhawk, posed the question: “Road tolls: are you for or against?”

There were two live guests, myself, an advocate of pricing all road-use at the marginal rate needed to manage congestion, and Jim Kenzie, a respected and awarded automotive journalist and car racer. Mr Kenzie is not an advocate of road tolling.

Mr Goldhawk also pre-arranged two phone in-guests: Marty Collier a local transport consultant and long-time road pricing advocate who runs an annual conference here in Toronto, and Economics Professor Harry Kitchen, author of "Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives," (2008).

Clearly, the guest deck was stacked three to one against Mr Kenzie.

When asked to explain the new-generation tolling technology, I briefly explained that it metered all road use and parking use, compared that use to an internal database of charging information for the purpose of road tolling, parking payment and pay-as-you-go insurance. I explained that location information was not permitted to leave the vehicle and that the device I had brought to the show shielded privacy to conform with international data privacy standards, which demand that location data not leave the vehicle.

Mr Kenzie’s position was the usual “we already pay way too many taxes, this is just more government intrusion that is no different than ‘big brother’ ”. He also pointed out that automotive emissions were so little that they should not be considered further in the global warming issue. Then he said that gas tax should absolutely be raised, contradicting his comment re “way too many taxes” only a minute before.

My position was that all roads should be tolled at a few cents per kilometer to replace fuel tax and to manage congestion and emissions. That long trips should pay more than short trips, and that peak-hour trips would cost more than non-peak-hour trips. I also criticized tolling “just the Don Valley and the Gardiner” as that forced people commuting from East and North East to pay (for example) $8 subsidizing those using the 401 and 427 (for free) coming from the North West. (I did not have a chance to describe the mess this would make of traffic on parallel streets and arteries.)

Mr Collier’s position was that road tolling (as well as pay-as-you-go insurance) was important for people to become conscious of the costs of their travel choices, that pay-as-you-go transportation sent ‘pricing signals’ to commuters, some of whom would make better choices thereby benefiting everyone, including those who continued driving on now-less-congested roads. (While this is an accurate description of the use of tax structures to influence choice – another example is tobacco taxes – this seemed to go over the head of at least one caller who resorted to describing Mr Collier as a “ding-dong”.)

Prof. Kitchen pointed out that he has been a long-time advocate of road pricing and that road tolls are increasingly critical to transportation funding. He says this with some authority, since he is one of a handful of respected Canadian academics that have written extensively on the subject.

By my recollection, the callers were split about 50/50, and a concurrent web-poll was 64% pro road-tolling, a surprising result since prior to a road pricing deployment, a population is usually about 30-40% pro-pricing.

What did you say?

Several of the callers agreed with Kenzie by repeating the usual: “I don't like tolling – just raise the gas-tax”. About this, I make two observations. First, more and more drivers are recognizing that there is a funding problem. A minority blames it on political conspirators who misspend; others, aware that the gas tax has not been raised in years, can understand why the problem is real.

Second, few people are able to grasp two key issues: (a) the fuel tax does not address congestion (Collier’s “pricing signals”) and (b) that increasing engine efficiency robs the tax base – i.e., green driving hurts road funding. The perfect illustration was a caller about ¾ through the show, who was explaining why raising the gas tax was the answer. I interrupting and said: “yes, but I have an all-electric car. How long are you willing to subsidize me?” He paused and said: “Oh, well, that's a different matter. Maybe your system will be needed for that.”

I was taken off-guard by Kenzie’s response to that: “The problem is all these efficiency standards. The government should force all vehicles to get 10 miles to the gallon or less”. I hesitated to point out that such a step would multiply fuel costs per kilometer by about 250% whereas the road tolls that Collier, Kitchen, and I are describing would cause an effective per kilometer increase of 20-30%. I suspect that Kenzie did not mean what he said, knowing it was absurd. Rather I sensed that he realized that the diversification of power plants and the specter of low-cost, self-generated electricity mooted all his arguments, and that he probably spoke more in anger than in jest.

I do not think that most people have the time or patience for arguments about pricing signals and using taxes to flatten peak-hour travel. But I do think drivers of internal combustion engines will start to ask for a new, altered or complementary tax-structure for greener vehicles as soon as fleet electrification reaches, say, 5 or 6%. Crediting politicians with greater than average intelligence, I think they will see the problem at 3 or 4%.

Why? Because a 3% drop in vehicle miles travel bankrupted the Highway Trust Fund in the US during the recent recession, and has sent the US into a flurry of interest in road-tolling to close this funding gap.