• Over $440 million in road, bridge, and parking garage investments. That’s right, asphalt to drive and park your car on. (Most curious are improvements to Interstates 64 and 70.)
• $3.4 billion in renovations and expansions of established institutions like Barnes Jewish Hospital, Washington University, Saint Louis University, and the University of Missouri–St. Louis—investments that likely would have occurred with MetroLink or without.
• Another $785 million from government agencies and publicly funded sources—not the privately funded, mixed-use development rail advocates promise.
• CMT even associates another transit project—the $51 million Loop Trolley—with MetroLink.

Who, besides those ideologically wedded to rail, would think MetroLink is primarily responsible for these projects?

The chart below shows other developments that CMT associates with MetroLink. Even charitably assuming a causal link between rail investments and development, much of the economic activity CMT cites is tangentially related—at best—to MetroLink. So, be wary of claims about the economic payoff from rail investments. If MetroLink was so good at driving development, its advocates wouldn’t have to cast such a wide net for evidence of its success.

The post Has MetroLink Spurred Development? appeared first on Show-Me Institute.

The post Show-Me Now! I-70: For Whom MoDOT Tolls? appeared first on Show-Me Institute.

As we have argued in the past, using tolls to pay for the improvements of highways is both fair and economically sound. Tolling allows all users of I-70, whether Missourian or non-Missourian, commuter or trucker, to jointly invest in a modern highway.

The new MoDOT study suggested that a plan to expand I-70 to three lanes across the state could cost $2 billion, far beyond the current resources of the department. However, the project could be financed with toll revenue and quickly implemented with the use of a public-private partnership (PPP). There are many varieties of PPPs, but they generally devolve some combination of the construction and operation of public assets to the private sector. If well designed and properly enforced, PPPs can deliver service that is both high quality and low cost.

While we may have issues with the scope of the I-70 project and how tolling is implemented, the fact that Missouri is getting serious about using PPPs and tolling to improve the highway system is to be lauded. More on this to come.

The post Toll Possibilities for I-70 Rebuild appeared first on Show-Me Institute.

MoDOT has exposed the need to rebuild I-70 for years. Its oldest sections are more than 55 years old, and much of the highway requires rebuilding from the ground up. But MoDOT is not just looking to rebuild I-70, they are also planning to expand it. MoDOT’s preferred plan would replace the pavement, expand the highway to at least three lanes on each side, construct a wide median, and replace interchanges. The plan is estimated to cost $3 billion. If Amendment 7 had passed, more than $1 billion (a quarter of all sales tax dollars going to the state road system) would have gone to improve I-70. Of that, $500 million would have gone to expanding the highway to three lanes from Wentzville to Independence.

MoDOT is so concerned with expanding I-70 because they projected traffic would almost double from 2007 to 2030. If I-70 does not add lanes, it would mean stop-and-go traffic across the state. Here is a chart of MoDOT’s projections:

MoDOT expected average daily traffic to increase roughly 2.5 percent per year from 2007 to 2030. If the growth in I-70 traffic follows the trend above, MoDOT is more than justified in its drive for more lanes. However, these increases are failing to materialize. For instance, in 2013, traffic should have been around 16 percent higher than it was in 2007. However, at most points along I-70, traffic was down. And lest one think this is a trend of the recession, 2007 traffic was around the same as 2000 traffic.

The idea that people are driving less, or at least not driving much more, should not surprise MoDOT. After all, they repeatedly say just that when requesting more dollars to spend on expanding rail and transit projects. If traffic on I-70 is not growing much now, and MoDOT expects people to drive less in the future, why hasn’t MoDOT updated its projections and plans for I-70? Claiming to need more money because people are driving less, while simultaneously needing money to handle traffic growth, seems like trying to have it both ways.

A more economical solution to the I-70 problem may be to rebuild the two-lane structure while addressing bottlenecks around places like Columbia. That might fit the needs of Missourians, while lessening some of MoDOT’s financial strain.

The post Are Outdated Projections Driving I-70 Rebuild Plans? appeared first on Show-Me Institute.

Those who directly benefit from I-70 are drivers, especially from companies that own commercial vehicles (interstate trucks). According to MoDOT, at least 25 percent of the traffic on I-70 is attributable to commercial vehicles (more than two axles). These vehicles also make up much of I-70’s cross-state traffic, with 70 percent of commercial vehicles passing straight through Missouri. If the state would toll I-70, both passenger and commercial vehicles would pay to use the interstate based on their size and distance traveled. In other states, commercial vehicles typically pay four to five times more than passenger vehicles. They pay extra to compensate for the extra damage they cause to the roadway. In fact, toll roads in other states generate much, if not most, of their revenue from commercial vehicles.

If Missourians decide to rebuild I-70 using toll revenue, it is likely that much, or even most, of that revenue would come from commercial vehicles. That’s a fair solution, because commercial trucking entities cause the most wear on highways and benefit the most from good roads. In fact, a well-maintained highway saves trucking companies money, because it reduces delays and vehicle damage. The failure of Amendment 7 doesn’t mean that Missourians want bad roads; it means they want good roads paid for in a sensible way. A sound tolling solution would allow drivers and interstate truckers alike to invest in the highway from which they so benefit.

The post Tolling I-70: A Semi-Solution to MoDOT’s Funding Problems appeared first on Show-Me Institute.

The South County Connector is a proposed route in Saint Louis County designed to ease north-south traffic congestion between South Saint Louis County and Clayton. Saint Louis County is responsible for this project, and is prepared to fund the road through property taxes, sales taxes, and gas tax funds. We suggest that Saint Louis County operate HOT express lanes on the connector in order to relieve congestion and help pay for the road. HOT lanes are express lanes that allow high-occupancy vehicles to use the lanes free while solo drivers pay a toll. This guarantees a free flow of traffic and generates revenue to pay for road construction and maintenance. HOT lanes have been successfully implemented in California and Virginia, and can serve Missouri as well.

For more on road funding in Missouri, read our other work about the possibility of tolling I-70 and transforming Missouri’s transportation funding paradigm.

The post South County Connector Is Opportunity For Transportation Innovation appeared first on Show-Me Institute.

The city of Warrenton, in Warren County, was well-represented. Several people in various city capacities spoke. Warrenton is located near where the proposed I-70 toll would begin, according to a Missouri Department of Transportation (MoDOT) plan presented in the last session of the Missouri Legislature. Warrenton officials, to say the least, are opposed to this plan.

One city official said enacting a toll at this location would make Warrenton “a ghost town.” Others said it would devastate city businesses and cause people to move out of the city. Others said it would cause travelers, truckers, etc., to avoid the area entirely and cost Missouri tax revenue. One said a toll would put their businesses at a “competitive disadvantage.”  They all have a right to their opinion; but they are all totally, completely, abjectly wrong.

You know what would put Warrenton businesses at a competitive advantage, not disadvantage? Having a new, expanded, six-lane highway serving the city and county. It is not like Missouri is inventing toll roads here. There are thriving cities along toll roads throughout the United States. They are not “ghost towns.” The entire idea of that is preposterous. Did the Lake of the Ozarks Community Bridge harm the community because it has a toll? Did Party Cove disappear when they enacted a small toll that paid for building a brand new bridge and saved drivers a half hour of driving to get across the lake?

Tolling works across the United States to build infrastructure we need while the people who benefit from it pay for it. It is human nature to fear risk more and judge benefits less than deserved. That is what I saw yesterday from civic leaders in Warrenton.

Show-Me Institute research on private financing and tolling, public-private partnerships, highway investment, and I-70 are available here.

The post Warrantless Fears Of Tolling In Warrenton appeared first on Show-Me Institute.

A couple recent videos:

• Are Missouri Public Schools Failing to Make the Grade? Saint Louis Public Schools Superintendent Kelvin Adams and University of Missouri Professor Michael Podgursky have the scoop.
• If You Play, You Pay I-70 in Missouri may be switching to a toll road, and Show-Me Institute Policy Analyst David Stokes thinks this sounds better than raising gas taxes for everyone.

Both videos are embedded below.

The post Are Missouri Public Schools Failing to Make the Grade? appeared first on Show-Me Institute.

The post Who Should Pay for Highways? appeared first on Show-Me Institute.

The Missouri Department of Transportation (MoDOT) has announced plans to make Interstate 70 a toll road to fund renovations. Let us make two assumptions: MoDOT will overcome any legal and political impediments to do this (not a safe assumption) and the renovations to I-70 are necessary (I think MoDOT is on safe ground here). With those assumptions set, the focus simply becomes: Is tolling I-70 a good public policy decision? I believe it is.

Missouri has less history with tolling than many other states. Most toll bridges across rivers in Missouri were converted to free facilities decades ago. Two bridges continued as tolls until recently — the McKinley Bridge in Saint Louis and one connecting Missouri and Iowa. The only toll facility now in Missouri is the Lake Ozark Community Bridge, which opened in the 1990s. Unlike neighboring states Illinois, Kansas, Kentucky, and Oklahoma, Missouri has never tolled its highways.

The plan is to have a private contractor reconstruct and toll the part of the highway between Saint Louis and Kansas City, but leave the parts within the urban centers toll-free. Without tolls, MoDOT officials say they would have to increase the gas tax 15 cents per gallon, almost doubling Missouri’s current — and admittedly, low — tax of 17 cents per gallon. The future toll rate (or rates, if they are adjustable, as they should be) is unknown, though the rate should be high enough to fund the highway and discourage congestion, but low enough to discourage taking alternate routes.

In July 2011, I visited a gas station in downtown Saint Louis to film a video on excise taxes in Missouri. We found a gas station, which at one point had cars from Illinois filling its entire lot. We spoke with the manager of an Illinois car service company that drove a dozen of its vehicles every day from Illinois to Missouri just to fill up with gas. Right now, it is inarguable that Illinois residents subsidize Missouri drivers (by buying more gas here than they consume via road usage). If Missouri raises its gas tax, thousands of southern Illinois commuters will see their costs increase too, including many who never drive on I-70 or do so merely for the first few blocks into downtown Saint Louis. (And yes, the new Mississippi River Bridge should have been a toll bridge.)

A Missouri driver, using baseline assumptions of driving 20,000 miles per year in a car getting 25 miles per gallon, would pay $120 more per year in gas taxes after a 15-cent increase. That would equal eight trips on I-70 if we estimate a $15 toll to cross the state. However, all Missouri motorists and anyone else buying gas in Missouri would pay that tax increase, whether they use I-70 or not. Truckers and frequent highway travelers would likely have to pay more with a toll than with a gas tax increase. There is nothing unfair about that because they are the people choosing to use the asset and drive the road.

How should one pay for public goods and services, through taxes or user fees? Good public policy often comes down to the economic questions of rivalry and excludability. Pure public goods are non-rivalrous (meaning that your consumption of it does not limit my consumption) and non-excludable (meaning that it is difficult to prevent someone from using a particular good). Sound public policy suggests that general taxes pay for those types of public goods. A local road system is not excludable (there is no means of keeping someone from leaving their driveway and driving on the street) and non-rivalrous (your use does not impede my use, although congestion makes any road rivalrous in certain conditions). Taxes, such as a general gasoline tax, are preferred for these systems.

Interstate highways connecting major cities (and many bridges) do not meet those standards for public goods. Their limited entry points make it easy to control access, so they are readily excludable. And while highways are not considered rivalrous, they are more rivalrous than local roads because of greater issues with congestion due to peak travel time demands and limited alternative routes. Smart policy is to pay for services like this via fees — in this case, tolls.

Tolls provide the necessary funds to build and maintain the road assets that benefit certain users, such as truckers, more than others. They provide a reliable source of funds to maintain the road in the future. With the recent technological improvements to tolling, fees can be efficiently collected without the long lines at toll plazas that some people may remember. Every state should move in the direction of lower general taxes for roads and more tolls where appropriate. Missouri’s I-70 is one road where it is appropriate.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri Public Policy.

The post Should Missouri Toll I-70? appeared first on Show-Me Institute.

MoDOT officials state that in order to pay to rebuild I-70 using gas taxes (and I have nothing against gas taxes; I just prefer tolls where feasible), they would have to impose a 15-cent per gallon state gas tax hike. I am going to do a follow-up post next week on costs after I have time to work through the numbers, but for now, realize that everyone in Missouri would pay that same extra 15 cents, including people who rarely use highways, particularly I-70. People in Kennett would pay the same as people in Kingdom City. People who drive primarily on local roads (paid for with local property and sales taxes as well as gas taxes) would pay the same as people who drive predominantly on highways (which gas taxes pay for almost entirely).

The Show-Me Institute released a terrific study on private financing of highways back in November 2008. The study was done by “distinguished urban economist” (Freakonomics’ words, not mine) Kenneth Small. It may be my favorite paper that we have released, and it has something important to say about this exchange in the hearing with MoDOT yesterday:

Committee chair, Sen. Bill Stouffer, R-Napton, said he was concerned that motorists may try to avoid I-70 if it became a toll road, pushing traffic onto smaller roads, such as Highway 36 and Highway 50.

Keith said the concern was valid, but it would be up to the toll road operator to make sure tolls aren’t excessive.

The concern about traffic being pushed onto other roads because of high tolls is legitimate. Prof. Small states on page 23 of the study: 

The best results occur when the objective for awarding the franchise takes into account a combination of all three forms of payment by users and taxpayers: their own costs of congestion, toll payments, and the subsidy required. This is a highly stylized model not suited for designing a franchise for a specific road, but it does highlight the importance of considering not only toll payments and subsidies but also congestion costs incurred by users of both roads. 

I have one minor critisicm of the proposal. I do not think this should be required:

After the project is complete, the contractors would operate the toll plazas for a period of years until the contractor’s investment has been repaid.

I say just toll it now and forever. After the investment is repaid, there will still be maintenance costs. It may be reasonable to require that the toll be lowered at that point in time (when the debt is gone and MoDOT faces just upkeep), but doing away with toll at that point is not necessary, in my opinion. However, that point is minor, and I think MoDOT deserves great credit for this proposal.

The post Is Missouri Ready For Tolls? appeared first on Show-Me Institute.