Sunday, May 20, 2012

Tolls: The Sorcerer's Finance

The best advice I can ever give you is to be very, very careful when it appears that what is in the best interest of society is precisely what's in your personal interest. If this is true, then you are a very lucky creature. When it is always true--you are unquestionably God's favorite. But what does it say about you if you believe it to be true, but it is not?

Consider the latest rage in the public finance of highways--tolls. The popularity line breaks down like this: If you are not subject to tolls, you are likely to favor them. However, when they are forced upon you, on a road that you used to drive for free, then you are probably not...especially when your demand for that roadway is inelastic. By inelastic, I mean when you are required to use the highway because your house and job are on opposite sides.

So who is correct? Are the people who complain about tolls because they have to pay them simply nimbys (not-in-my-back-yard)? Well, often no. Are those who favor tolls when they don't have to pay them part of the free-lunch crowd? Actually, usually yes. Here's why:

The simple truth is that tolls are a political solution to the public finance of highways, not a common sense solution. Because tolls are political in a free country, it is not wise to believe that everyone will one day be subject to them. Roads will be associated with tolls when the political benefits to the decision makers outweigh the political costs. Other roads will not be equipped for toll collection when the political costs exceed the political benefits. This situation is likely to produce one outcome, which flies in the face of fairness. It quite probably will cause those who are subject to tolls (because the decision makers received a net benefit) to pay for those who can never be subject to them (because the decision makers would have to pay a net cost). The "nimbys" don't want to be the only ones paying for highway use, and they don't want the risk of paying for everyone else's use in addition to their own. On the other hand, this is precisely what the free-lunch crowd wants.

The sorcery, or magical outcome, is the half-truth politicians imply: that tolls are nothing more than a user fee--a fee that Johnny Nimby has to pay for his road, but Susie Free-Luncher doesn't have to pay for hers. The odds are better than 90 percent that they both travel to work each day on a government provided highway though.

14 comments:

CoronaAdvances said...

Nice advice in an informative article, thank you.

Alisha Lewis said...

As a Nimby myself, I completely agree that the individuals that make the political decision wither or not tolls should be political solution to the public finance of highways. Always never have to commute back and forth at least once maybe even twice a day on the roads or highways in question. They will never understand why it isn’t a good idea till they no other choice but to pay a toll to go to work and another to go home. Like the old saying goes “walked a mile in my shoes” or in this case “drive a mile and pay a toll in my shoes”.

Rita Antis said...

Even though the tolls would not affect me daily, I do not want to see them come to pass. It does not seem fair that the benefit of a less congested freeway system be the burden of the few. Eventually most, if not all of us have to travel through a tunnel or over a bridge. The problem of how to finance the new tunnel should not have a solution based in politics.

Ahran Oh said...

Tolls can be useful and efficient, but i believe it also depends on the situation as a whole. For public finance reasons, tolls can be helpful and beneficial. However, i also believe the "price" people have to pay to get through these tolls matters as well. For the people who may have to use the tolls on a regular basis, because the toll may be between work and home, they may not favor the tolls. However, if the toll was to church only pocket change, it may have less hatred from people, rather than if the toll's fee was in higher numbers. in the end, people who do not favor tolls, will find any excuse to hate on it, but if tolls were needed in places, to help with the financial means for any impact on building or fixing the roads we all travel on, i believe it's only a small price we can all equally pay.

Joseph Cristelli said...

After reading your blog I disagree with a couple statements that were made. The location of the tolls are in highly populated areas and are not singling out the “nimby’s” from the “free-lunch crowd”. If the tolls were placed in an area focusing on a certain demographic your logic would make more sense. Another thing that caught my attention was when you stated, “the odds are better than 90 percent that they both travel to work each day on a government provided highway”. The reason is this comment is 100 percent correct, but the key word is government provided. No road is free because, “there is no such thing as a free lunch”! The government provides a service and we the people must pay for that service (i.e. State tax, federal tax and yes even tolls).

Andrea Price said...

I will have to pay tolls at the downtown tunnel to go back and forth to work ever day. However, if I did not have to pay tolls, I would still oppose the tolls being put on our roadways. The government needs to stop wasting our tax paid dollars on stuff that is not important and then want to raise taxes or seek our help (as these tolls) to bail them out of a deficit or their shortcommings. Traffic is already a mess at the tunnels and around the cities. Can you image how it will be when the tolls are put on? If we let them put these tolls up, then they will want to place tolls on other roads. I just read in the paper a few weeks ago that they are talking about placing a toll on the high rise bridge in Chesapeake. I do believe there is some political gain involved in this toll situation.

Bill C. said...

Charles Bryant wrote:
"In my view, adding tolls to the City of Portsmouth will cause the city to lose business. This will weaken the economy."

Drew Weitzman said...

I believe tolls are not necessary. They take advantage of citizens by forcing them to pay tolls because they can't get around them. Recently there has been a discussion of raising the toll rate to get to the Outer Banks and doubling it. It would be ridiculous to pay 8 bucks there and 8 bucks on the way back. I don't have to go through tolls often, but I still don't agree with them.

Anonymous said...

I do not like tolls in gneral- first because they are making them to be so much money more than a dollar each way, some people work on one side and live on the other. 2- it will cause more traffic than we will have now.

Allison said...

It is true that many things in life that are in the best interest of society are not always in the best interest of each individual, especially in the case of tolls. Unfortunately this is one of the ways that life is unfair- only certain people are affected while others scrsp on by, never having to deal with the problem. If people do not want their taxes raised which most people don't,however, then I believe tolls are "necessary evil" in order to pay for projects. What makes tolls wrong is when the tolls remain even after the money the government needed has been collected and yet the toll is not removed.

Carrie Bott said...

I agree that tolls are not the way to go but what is the alternative to pay for road maintenance? If lawmakers had to travel these roads they would not put tolls on them. If anything I think we should add to the gas tax and use the money where it is raised. This way tourists would help pay for the roads they use as would people who live here.

Tyler Tanner said...

I absolutely hate the tolls the city is going to put in for a couple reasons. First, I work at McArthur mall and already pay for a parking pass, and know I have to pay for tolls to go to and from work. Doing so is like working an hour or so or free just to pay for the parking and tolls. Second, the traffic will be so much worse than it already is. We have so much traffic without tolls and now it will be even more traffic with tolls regardless if you buy a quick pass or not. Lastly, the city would not have to put in tolls if they did not well over spend on their projects like the light rail. The tolls are terrible from the community stand point, but I guess if you are the city you do not care are the traffic people have to wait threw or if people have to spend extra money, as long as the city gets paid.

Jess said...

I think the tolls are unnessesary and we should pay by doing something else. It will cause more traffic then there already is. They are making the tolls to probably close to $2 which will not be good for those who work on the opposite side from where they live. I guess families won't be eating out much after they come in.

Anonymous said...

Tolls... if the traffic would be less, it would remove stress healthwise, certainly no one wants to spend more than they have too...weigh the alternatives and solutions...and then pick what's best for you. fh