The Lesson of $40 Highway Tolls in Virginia

The cost of driving solo on the high-demand stretch of I-66 inside the Beltway. Photo: Salesgrincity/Twitter
The cost of driving solo on the high-demand stretch of I-66 inside the Beltway. Photo: Salesgrincity/Twitter

This week in northern Virginia, the congested stretch of I-66 inside the Beltway opened to solo drivers during the morning rush, for a price.

Previously, during peak hours these 10 miles of I-66 had been limited to carpoolers, people with hybrid vehicles, and people heading to Dulles Airport. The new policy lets carpoolers use the road for free, while solo drivers pay a toll. This allowed solo drivers to use I-66 at a time when they’d previously been banned, but they were surprised to see rush hour prices ranging between $30 and $40.

The rates are well above the $6 tolls officials had told people to anticipate. But that’s what it costs to allow access to single-occupancy vehicles without jamming the road. By law, toll prices are automatically set to keep traffic moving at 55 mph. The high rates reflect high demand (though there’s speculation that the prices are being calibrated higher than they need to be).

David Alpert at Greater Greater Washington writes that this whole experience is instructive, because it’s one of the few cases where solo drivers have to confront the full cost of their trips. There are lessons for other road projects, he says:

The real reason there’s sticker shock is that the real cost of road transportation is hidden from most voters. Gas tax money goes to states and the US Department of Transportation which flows back as what seems like free federal money to build a lot of roads. Meanwhile, every transit project has to scrimp for funds and deal with constant sniping from critics calling it a “boondoggle.”

I-66 inside the Beltway is already built and not adding new capacity, but Virginia is adding lanes outside the Beltway under a public-private partnership, and Governor Larry Hogan has proposed the same for nearly every Maryland highway. That’s a really expensive proposition, and he’d prefer to make it sound cheap. But Ben Ross estimated that tolls would have to be at least $41 to pay off the costs of construction.

I haven’t seen a lot of people citing Ross’s numbers, but they should. After this experience in Virginia, that might be low!

Loudoun supervisor Matt LeTourneau pointed out on the Kojo Nnamdi Show that Virginia lawmakers might have made different decisions about the I-66 project had they known. For instance, the project cost $120 million, he said; maybe they wouldn’t have spent that kind of money. Perhaps this can be a cautionary tale for Maryland, to at least go into any widening and tolling with its eyes open (or eschew the idea).

The region doesn’t have to build expensive road projects that will either result in high tolls or large subsidies to drivers, Alpert points out. Smarter land use planning and investments in transit can create a better transportation system at lower cost.

More recommended reading today: Smart Growth America sounds the alarm about provisions of the GOP tax bill that will hurt cities and undermine housing affordability. And Buffalo Rising writes that after refusing to install bike lanes on Main Street, the city of Buffalo inadvertently proved that they would work fine, by closing a lane for construction.

67 thoughts on The Lesson of $40 Highway Tolls in Virginia

  1. This article is disingenuous, in that it conflates the capital costs of building and maintaining roads, vs. the market price of a particular road, given that supply is constant.

    What people have discovered here is not how much it costs to build roads — but how much demand there is for the roads there are. People were not particularly mad in the past when they were not allowed to use I-66 at all; but now they are angry at $40 tolls. Because the perception is that the 1% will pay those tolls anyway, providing yet one more unfair advantage to the 1%.

    The solution is to cap tolls in the HOT lane at something that seems “expensive but still possible to afford” to the average Joe. When traffic congestion increases beyond that point, just close the road to single-occupant vehicles. That would feel more “fair” to most people. The fact is, at $40, very few single-occupant vehicles will make that choice anyway. So making it carpool-only at that point will have very little effect.

  2. I agree with your assessment that cost =/= market price. I would propose a different solution however, which would be to invest those toll dollars into other modes of transit so that the market value of the service drops.

  3. I agree, this article fails to adequately explore the economic situation. As the lane becomes increasingly full of carpools, which pay no toll, the price for the non-carpool drivers will approach infinity. This only indicates the presence of many carpools.

    To get any real signal out of this price, you’d need to radically increase the number of passengers required to qualify for the free tier to something like 20 or 50, making it effectively bus-only. Then we would see a useful price signal.

    We see this in California with the “express lane” experiments on CA-237, I-880, I-580, and I-880. Carpools, buses, electric cars, and even hybrid-electric cars can use the lane for free, or anyone willing to pay a few dollars can use it. As a result the lanes are backed up for miles at peak hours, giving no congestion relief and providing no useful price signal.

  4. or just charge all vehicles the same.
    at that paltry “HOV” level of two people/car, a $40 toll is $20/person
    On a 40 person bus it is only $1 each.
    Though with such a fairer system, I imagine it won’t need to be anywhere near $40 to keep traffic flowing at 55mph.

  5. Suddenly closing a road to single-occupancy vehicles that up until that moment they had been allowed on (for a price) makes for an unrealistic enforcement situation, especially if there’s any barrier preventing you from just switching lanes, like there are with many facilities.

    The $40 toll IS effectively making it carpool-only. Except with a $40 fine instead of a $300 fine or whatever it is.

  6. $30 is actually a very fair assessment of what the marginal cost of providing the HOV lane is. Superhighways are staggeringly expensive to operate.

    Very few people accept just how expensive driving really is.

    Elizabeth, we’ve discussed what a economic toll would be for the new TPZ bridge. I figure at least $20 each way. Accounting for price elasticity and the TPZ might have to increase to $40 or even $50 each way to cover TPZ costs.

  7. Nothing about the $30-$40 toll has anything to do with the _cost_ of providing the HOV lane. It’s entirely based on supply and demand to use the lane, not how much it costs to build or maintain the lane. That’s why officials told people to expect $6 tolls; the demand was different than expected, but surely you don’t think the cost of maintaining the road went up 5-7X from the official’s estimates, right?

    There’s certainly a case to be made for full economic tolls, but it’s dishonest to conflate these numbers, which weren’t in any way calculated with maintenance or construction costs in mind, with “Superhighways are staggeringly expensive to operate.”

  8. Perhaps the goal of the $40 toll is to discourage solo drivers, not create revenue. When looked at from that angle, this may be an excellent idea.

  9. $30 is very likely BELOW the marginal economic cost of these lanes.

    The $6 number was likely a seriously flawed calculation made by a financially illiterate gov’t employee.

  10. Vooch is right. They aren’t pricing the road to “pay for itself” – they are pricing it to navigate congestion. We are used to cheap tolls, so we believe that roads are cheap. They aren’t.

  11. People come from the Atlantic Ocean to West Virginia and equal distances north and south to work there and rub elbows with people like me. It is worth every nickel spent on tolls.

  12. High Occupancy Toll (HOT) lanes are a Trojan horse used to continue freeway
    expansion under the guise of sustainable transportation. The scheme works like
    this:

    1. Road becomes congested.
    2. HOT lanes built with the intent to address congestion while simultaneously
    encouraging carpooling and garnering more revenue via tolls.
    3. Dynamic tolls eventually rise to rates that only the wealthy can comfortably
    afford
    4. Citizens cry foul that HOT lanes are a public amenity available only to the
    1%. See Elizabeth’s comment for an example.
    5. HOT tolls are capped to be affordable to the average driver
    6. More drivers use HOT lanes
    7. go to step #1

    Before any jurisdiction approves HOT lanes, someone in the room full of stakeholders
    needs to ask “What are we going to do if dynamic tolls reach $200?”,
    because they will. If the answer is to cap tolls at a rate too low to
    effectively discourage single occupancy driving then the HOT lane project
    should be cancelled because it won’t achieve its objectives. This question
    needs to be asked BEFORE tolls rise to atmospheric levels. Once the road is
    literally cast in stone it becomes a sunk cost and you’re trapped.

  13. You miss the point. The price is set based on supply and demand, but Vooch’s point is that the price happens to be close to the actual cost of building the lane and so is not unfair.

  14. High tolls are needed. The other options don’t work. Take for example Connecticut. Their Governor Dan Malloy didn’t want high tolls to impact his city of Stamford. So he crafted a new tax plan where the bulk of the infrastructure costs were pushed onto large companies. GE left, Aetna left, and a slew of other firms left Connecticut because of Malloy’s terrible plan. Hartford is about to go bankrupt as businesses continue to leave. Hartford’s mayor, Luke Bronin, pleads for regionalism and asks for money from wealthy suburbs. Seeing the sadness, Black + Decker throws Hartford a pity substation bone with an attached message that Malloy’s plan has to change or they’ll leave too. Malloy and Bronin instead pat themselves on the back for getting a pity substation instead of heeding the tax warning. You need tolls, high tolls, period, to pay off infrastructure. Connecticut needs tolls, Virginia needs tolls. You can’t expect large companies to pay for everything

  15. This allowed solo drivers to use I-66 at a time when they’d previously been banned, but they were surprised to see rush hour prices ranging between $30 and $40.

    To be fair, it wasn’t JUST that they started tolling for what used to be carpool-only, they also extended the times. That resulted in people who were previously able to drive solo for free now having their commutes fall within the time frame of the toll. As such, it’s not necessarily a story of people now having a choice to use a road that they previously couldn’t, they almost certainly are getting charged when it used to be free.

  16. “Nothing about the $30-$40 toll has anything to do with the _cost_ of providing the HOV lane.” Nor do eBay auction prices have anything to do with the cost to the seller!

  17. There’s also a CT rep named Larson which proposed $10 billion in highway tunnels for Hartford and stated he could pay for it with a heavy carbon tax. Incredible. Malloy, Bronin, and Larson are clueless. + Black & Decker’s parent company, Stanley, is already based in Connecticut. Just jobs shifted in-state, and soon out of state after Malloy’s highway folly

  18. Won’t the toll money just get set to VDOT where it will be recycled into endless sprawl inducing projects across suburban & exurban Virginia? I get the argument that driving is not accurately priced, but I’d take traffic any day over giving VDOT a blank check to go waste on building stroads and spaghetti interchanges.

    instead of charging for using congested roads, i think it’s reasonable to charge extra for the wasteful over-capacity & over-built roads. That would incentivisize residents to right-size their infrastructure, taking out lanes, reducing miles driven, etc.

  19. I agree. What Vooch said is that “Superhighways are staggeringly expensive to operate” and cited the toll as support for this. The toll for these lanes has as much to do with operating costs as $450M has to do with the cost of painting Salvator Mundi.

    We should be clear about what we’re talking about when we’re advocating for tolls, whether those tolls are total-cost-based or set by the market depending on congestion.

  20. The ratio of expensive highway infrastructure to tax paying properties/businesses in Hartford is staggering. In my opinion, the financial prudent move would be to just abandon the vast majority of it. Looking at google maps, there’s probably 10 billion in highway infrastructure just around the downtown, to service what looks to be maybe 8 blocks of downtown business – half of which is low value structured parking – surrounded by residential housing. Absolutely insane. For that level of business activity, there should only be about a 2 laner around the fringe of the downtown.

    https://www.google.ro/maps/place/Hartford,+CT,+USA/@41.7665129,-72.6810385,3958m/data=!3m1!1e3!4m5!3m4!1s0x89e65311f21151a5:0xcc8e4aa8e97d5999!8m2!3d41.7637111!4d-72.6850932?hl=en

    There’s more highway infrastructure dollars being spent for hartford than washington DC proper.

    https://www.google.ro/maps/place/Washington,+DC,+USA/@38.8935081,-77.0319604,5491m/data=!3m1!1e3!4m5!3m4!1s0x89b7c6de5af6e45b:0xc2524522d4885d2a!8m2!3d38.9071923!4d-77.0368707?hl=en

    The fund mechanism mentioned does seem insane, but the structural issue is that Hartford seems to have a worse-than-Detroit love of highway building.

  21. Price set this way can’t be ‘fair’. It can become infinite if there are enough carpoolers (riding for free) to jam this stretch. The good thing is that now it looks like every carpooler is subsidized $60 a day.

  22. Road price can be set anywhere between 0 (and jammed) or whatever it takes to get free-flowing traffic.
    Proposed “expensive but still possible to afford” will result in “jammed and you have to pay for it” which is worse that any of two above.

  23. A STROAD is a street/road hybrid and, besides being a very dangerous environment (yes, it is ridiculously dangerous to mix high speed highway geometric design with pedestrians, bikers and turning traffic), they are enormously expensive to build and, ultimately, financially unproductive.

    https://www.strongtowns.org/journal/2013/3/4/the-stroad.html

    The rest of the spaghetti layout in Virginia may be part of its charm.

  24. Did you read the rest of my sentence? The idea is if the price goes too high, just set it to infinity (in other words, change it from an HOT lane to a plain old HOV lane).

  25. Vooch:

    1. You’re wrong, in the sense that you’re doing you can to get the highest possible cost for the TZB.

    2. Apply the same logic to the subway, and we should be charging Upper East Siders $20 to use that facility as well. $3b for 3 stations on the 2nd Ave line. Not to mention the incredible boondoggle on the new WTC Path Station; the “temporary” station cost 1/10 as much and worked just fine.

    Meanwhile, essential subway infrastructure continues to deterioriate…

  26. I grew up in CT and obviously want the state to succeed. That said, the current environment does not look good. CT has no large cities, and now must compete in an environment in which the largest cities are sucking the lifeblood out of everybody else. Not because they are cheaper (they are not), but because that’s where the talent seems to be going. Taxes are not the first reason companies are leaving, or else they wouldn’t be heading to even higher tax places such as NY and Boston. I don’t think this is healthy for our society and it obviously cannot go on forever; but the only thing I’ve seen that might stop it would be the (vile) GOP tax plan.

    You are right, Hartford is WAY over-built on highways. Compare Hartford to New Haven, Bridgeport and Stamford, three other CT cities of similar size. It’s always seemed like some form of political graft.

  27. This has nothing to do with the marginal cost of building the lanes.

    Yes, the $6 cost was flawed. But that all depends on supply, demand and market elasticity — which you don’t know until you try it. The high toll means that people are more willing to pay tolls to save time than planners predicted. They should consider this lesson learned for future projects.

  28. Vooch is waving his hands.

    Do me a favor… look up the capital cost of building I-66. Convert that to an annualized cost using a reasonable measure. Then look up and divide by the number of annual vehicle-miles that I-66 provides. Look up the cost of patrols as well. That will tell you the per-vehicle-mile cost of these lanes. Until you do that exercise, you are just waving your hands.

    Every time I’ve done this exercise for roads, I’ve concluded that roads are REALLY CHEAP, per passenger-mile. That remains the case even if you ask someone about all the “hidden subsidies” that weren’t taken into account the first time. Roads get a staggering amount of use; when you divide by such a big number, $1b isn’t very expensive.

  29. No, let’s not privatize interstates. Privatized interstates would mean private companies get the profits while taxpayers keep the losses.

  30. True if prvatizrd interstates are some crony capitalist concession.

    I advocate for full privatization, selling the land and improvements with ZERO regulation.

    We can then quickly see which Intetstates are ‘vital’ and which interstates would be better put to another use ( BQE & FDR baby )

  31. This makes so little sense for so many reasons. You clearly believe these highways should never have been built, and you just want to put through a policy that is so destructive that maybe they will be torn down. We are unfortunately already seeing that in our national policy these days with regard to the EPA, healthcare and trade policy. Careful what you wish for, or we might have nothing left as a nation.

    Consider other consequences of “radical privatization” of highways:

    1. Rural interstates would fall into disrepair, seriously disrupting long-distance truck traffic. You might think this is a positive thing, and that long-distance goods should travel by rail. But rail logistics are inherently slower, and you probably also like to order things from the West Coast and see them delivered within a week.

    2. Some people would own key choke-points for which there are no easy alternatives, and there is no way for alternatives to be built — because, unless you are also willing to radically deregulate all land use, it will simply not be possible to build another bridge of the owner of the first bridge is unreasonable. The public will be soaked for all they are worth.

    3. The BQE is unlikely to come down. But tolls would certainly go up, and SOMEBODY would make a killing.

  32. I think everyone’s comments from multiple states are great efforts.
    Let’s hope all the DOTs are aware of these posts.

  33. If users of a interstate do not want to pay for said interstate, then why have it ? If they land can be put to a better use then why not ?

    Freight rail has a ~50% market share despite having to compete with lavishly subsidized trucking.

    You seem to think profit is evil. Why ?

  34. > Freight rail has a ~50% market share despite having to compete with lavishly subsidized trucking.

    Rail and trucks are not equivalent. Rail is cheaper and slower. Trucks are more expensive and faster. If you need a thousand tonnes of coal next month, rail is great; if you need a head of lettuce from California before it rots, then not so much. If you eliminate trucks, you make it hard to deliver stuff that must be delivered quickly.

    > You seem to think profit is evil. Why ?

    Nothing wrong with profit. But profiteering is counter-productive. In order to have a radical free market in transportation infrastructure, you need a radical free market in land. Otherwise, you are just privatizing a resource (bridge, road, etc) for which there is no effective means to create competition. That’s not a free market, it’s a giveaway of public resources.

    Anyway… we already have plenty of examples where governments don’t build infrastructure and leave it up to the “free markets” to do so via lack of land use regulations and zoning. Bangkok is a great example. And you know what? In spite of the complete lack of zoning and the pervasive, dysfunctional gridlock, no private entity built any roads or transit lines. The cul-de-sac was the most popular kind of road that private entities DID build. Eventually, the government built a bunch of highways and elevated trains. But the city’s transportation is still one big hot stinkin’ mess.

    “No, no” you say, “the government will stay involved with transit lines, they will just privatize the roads.” OK, I see your bias, you just don’t like roads… But any reasonable analysis is that roads do serve a purpose, even in NYC. The focus then needs to shift from “how can the government destroy the roads” to ” what is the best policy for government-run construction and maintenance of roads.” Same for transit.

    As I said before, radical privatization of transportation networks is a path to total dysfunction.

  35. Oh I know. I should have been more specific: I believe making those investments will actually serve to lower the market price for the express lane (by robbing it of some demand).

  36. 1) roads are fine and should remain in gov’t hands.

    2) Interstates should be privatized

    3) The shipping cost of most consumer goods is 1-2% of retail. The long distance portion of that shipping cost is a fraction of total shipping cost. Even in the unlikely event that privatizing the interstates leads to a doubling of long distance freight costs it would only lead to a tiny increase in total shipping costs with nil effect on consumer prices,

    3) All transit systems in US cities were created by private enterprise and were the envy of the world until local governments deliberately bankrupted them and then nationalized them. The NYC subway system is the poster child for this failure.

    4) There are many alternatives to using the interstates for freight.

  37. . . . or just raise the damn fuel tax to cover the cost of providing an adequate number of lanes AND funding a robust transit alternative in urban areas. This should not be about “winners” or “losers”, it should be about providing adequate alternatives for everyone!

  38. It is graft. You nailed it. Luke Bronin, Hartford’s mayor, is Governor Malloy’s protege, aka “Malloy’s Boy”. Malloy’s old city where he was mayor, Stamford, and Bronin’s city, Hartford, have received mountains of aid while the rest of Connecticut suffered, hence why General Electric left. now Connecticut doesn’t have enough funding for transportation. Malloy held a news conference this week about the state’s transportation crisis, and every attendee blamed him. Bronin gushes over his Stanley Black + Decker pity office, but not a word about Papa Malloy’s transportation disaster. And to make matters even worse, Bronin is applying for a $45 million state bailout. Think Papa Malloy will give Bronin the money? Or will he put the $45 million into Connecticut’s transportation?

  39. Larson is another Connecticut dummy. $10 billion in highways for a dying bankrupt city of 100,000. Bronin of course embraces the “free” funding without a care or thought. This is the same mayor who allowed a Double A baseball team to have their way with the city no questions asked: leading to Hartford’s bankruptcy. Larson is bad, but Bronin may be the dumbest politician I have ever met.

  40. Winding back roads are certainly part of the VA charm. Unfortunately, it’s the 8 year, $800M highway interchange projects (which need to be rebuilt every 15 years at ever increasing price tags..) that really obliterate that charm as well as the property tax values of everything within 1-2 miles of them. 8 miles south of DC is one of the worst spaghetti interchanges in the country, but there’s several more that have popped up like mushrooms after a spring rain. VDOT can’t act reasonably, so I fear that this toll revenue will just fund more of the same – extremely expensive highway infrastructure to service some low value strip malls & office parks. It’s the same strategy that has made places like Detroit & New Jersey broke, and drowning under insurmountable mountains of decaying infrastructure.

    Here’s the speghetti interchange in Springfield
    https://www.google.com/maps/place/Springfield,+VA/@38.7879075,-77.1822969,3026m/data=!3m1!1e3!4m5!3m4!1s0x89b64de885e53a9d:0x67e76f2416faa504!8m2!3d38.7892801!4d-77.1872036

  41. I applied to several road builders and the VDOT for some of this work as I’m sure many other people did too.

    I passed there many times in a company van going north to another job site, the Pentagon. I wouldn’t call it a low value strip mall or an office park.

    It was awesome to see the workers and equipmemt on I395. Don’t forget the proximity to I95 and I495 and their importance.

    Detroit has a heck of a hockey team and New Jersey has its girls.

    Could you please give us a map link to a stroad?

  42. Other than carpooling there should be another mode of transport that allows user to use the toll lanes for free, such as shuttle buses or a state provided public bus. You can’t just limit capacity without offering options to the driver. While I agree it’s a step in the right direction I believe the goal is to get as many vehicles off the road to reduce the carbon footprint and alleviate congestion. I’m not from that region so I’m unsure what options are offered.

  43. Yeah I know, hence why mentioned buses above. I just don’t know what buses are offered in that area considering I live in another state.

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