Bridging the Gap: A National Study Analyzing the Process of Toll Road Governance,Finance and Revenue Allocation

Abstract

Despite strong interest in toll finance, the process of decision making and revenue allocation is not well understood. This study examined toll road data over 10 years, to understand how revenue was spent, and whether there were differences by governance structure. A representative sample of 60 toll roads across 20 US states was catalogued, selected based on their governance structure, centerline miles, and rate of toll increase since 2007. Archival sources were examined to identify whether/how much tolls had increased/decreased, and the question of how governance methods affected spending outcomes was addressed through interviews with staff and elected officials from four toll road authorities. The study found strong incentives toward profit in private and public–private partnership roads, but weak incentives to encourage transparency. The study identified barriers to using revenue toward expenditures intended to soften the impact of toll increases on low-income populations. This was because of debt covenants and incentives to distribute money toward new projects within an agency’s outer boundaries, thus failing to address the equity concerns that hamper public confidence in tolls as a revenue source. Nesting a toll road within a multimodal transportation authority could mitigate this, providing incentives to subsidize public transit, and taxing powers that make debt less necessary—an institutional design which could mitigate equity concerns that have hampered public acceptance of tolls as a revenue source.