Targeted tolling and pricing in the United States currently raises more than $17 billion annually,22 but it could raise more if additional tolled facilities were added to the system and/or existing toll rates were raised to retrieve the full costs of system use (where fixed tolls currently do not fully cover costs) and/or to manage congestion. Still, it must be recognized that tolling is often resisted by the public, except to fund new options, such as the construction of new capacity, or to encourage more effective use of underutilized HOV lanes.
At first glance, the new annual revenues that could be raised realistically through tolling are small relative to the enormous need at the state and local levels. One recent estimate of future tolling potential is that expanded use of tolling by state and local governments would only raise an additional $9 billion over 10 years.23 However, this figure was based on tolling and pricing opportunities in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users and on current political and administrative realities at the state level. If Congress lessened federal restrictions and increased federal incentives to encourage tolling, the contribution of tolling and pricing revenues to total national highway funding could be much higher. For example, tripling the current level of total annual toll road revenues over the next 20 years in constant dollar terms (the Commission recognizes this would be an ambitious achievement) could raise annual funding equivalent to almost half of current national highway capital expenditure levels.24 To the extent that states are able to use toll revenue to fund some new projects, it expands their funding base and their ability to meet maintenance and reconstruction needs, as well as to build new projects using traditional revenue sources.
The use of tolling has increased in recent years, with one-third of all new limited-access lane miles built in the United States tolled, as previously noted.25 For example, Florida has aggressively used tolling over the last two decades to help finance new capacity projects—to the point where toll revenues and other associated toll road receipts amount to over $1.2 billion annually and contribute nearly 14 percent of total highway capital and maintenance spending (including federal funding and bond receipts).26 As a point of reference, if the rest of the nation implemented state and local tolling to the same degree as Florida does, total toll revenues would be on the order of $22 billion per year, or more than double current toll road revenues.27 To put this figure in perspective, the added annual revenues would be equivalent to a 6¢ per gallon increase in motor fuel taxes. An even more optimistic estimate, from the Brookings Institution, estimates that applying tolls to all congested Interstates and freeways would raise $105 billion per year.28
These, of course, are scenarios involving aggressive and extensive use of tolling and should not be used by policy makers to defer increasing federal funding for surface transportation investment; if for no other reason, meeting the overall national need, as described in Chapter 2, requires much more significant revenue levels. Florida probably represents the high end of the possible range for tolling in the immediate to medium term. And the Brookings Institution estimate, while meaningful as a barometer of how much we as a nation underpay for transportation, is not likely achievable, at least in the short to moderate term. Given the difficulties, including political constraints, involved in moving to greatly expanded tolling, expectations that every state could or should replicate Florida's experience or that every congested freeway could be priced are not realistic.
Cordon and area pricing are applicable at the metropolitan or sub-state regional level. These strategies are typically not primarily designed to pay for the cost of transportation infrastructure, as tolling and road pricing are, but rather are designed to reduce vehicle traffic within an area to which entry is priced. However, cordon and area pricing can generate significant revenue for local transportation needs, including both highways and transit, but it also (currently) tends to be relatively expensive to implement and administer.29
Based on the most recent available information, cordon pricing systems generate annual gross revenue of $54 million in Singapore, $237 million in London, and $116 million in Stockholm.30 And the proposed New York City program was expected to gross $564 million annually. Limited information, however, is known about the full costs of implementing and administering cordon pricing schemes. The London system cost £200 million (about $275 million at current exchange rates) to implement, with annual operating costs of £155 million (about $158 million).31 The proposed New York City program was estimated to have $73 million in capital costs for collection system development and $62 million in annual collection, enforcement, and operating costs.32