Fears of Private Toll Roads Promote Government Control, Waste

We recently commented on how a bill in the Missouri Legislature, SB 540, would allow MoDOT to lease part of the state highway system to private companies who could rebuild highways in return for the ability to toll the improved roadways. The provision, known as the Public-Private Partnership Act, presents an opportunity for Missouri to access both private-sector capital and expertise to improve and manage parts of our infrastructure.

However, some groups that claim to be opposed to higher taxes and government control have attacked privately leased toll roads. I will address some common critiques these groups advance:

Claim #1: Tolls are a “double tax” because we already paid to build roads and now we are tolled for their use. Furthermore, toll road users may pay for state roads twice, once with fuel taxes and again with tolls.

Response: If toll revenue is used to rebuild I-70, users will be paying for a new, better highway; there is no proposal to toll unimproved routes. As to paying both the fuel tax and the toll, with new technology it would be simple for the toll management to rebate toll users (done in other states) for the amount of fuel tax they pay while using the highway. That means no double tax.

Claim #2: New toll roads create monitoring opportunities for the government.

Response: While it is perfectly reasonable to be concerned with privacy, the correct approach is to promote transparent government and rigorous privacy protection, not to block new technology. Many aspects of modern life, such as cell phones, credit cards, and the Internet, allow increased government monitoring. We should not stop using these advances, or block a superior way of managing highways, because the government may take advantage.

Claim #3: Foreign companies might lease publicly funded roads.

Response: There is nothing wrong with foreign companies investing in Missouri’s infrastructure. Highway leases are always accompanied with stringent lease terms that specify how the highway must be maintained and what tolls can be charged. If the foreign private company goes bankrupt or does not fulfill its lease, the highway is either sold to another company or, if there is no buyer, simply reverts to state control. For example, an international consortium bought the Indiana Toll Road for $4 billion in 2006. After making hundreds of millions in upgrades to the toll road, the project went bankrupt and the road is now being sold to another company. Indiana taxpayers are unaffected by the bankruptcy, but they continue to enjoy the transportation improvements paid for by foreign companies.

Privately leased toll roads offer an opportunity for improvements to the state’s highway system. The risks regarding the toll road’s success are borne by the private sector (not the taxpayers), and only those who directly benefit from the rebuilt highway will have to pay. If that’s not a win for taxpayers and limited government, what is?