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2023

Why Wisconsin's no-toll road solution may not work in Texas

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AUSTIN (KXAN) — As more energy-efficient and electric vehicles make their way into the American market, transportation departments across the country are grappling with one key question: How do we fund future infrastructure projects without a dependable gas tax?

Currently, Texas collects 20 cents per gallon on gasoline and diesel fuels' sales, according to the Comptroller of Public Accounts. Billions of dollars in revenue collected go toward building and maintaining state highways, roads and bridges, as well as the state's Available School Fund for public education.

Here in Texas, the state's toll road system also brings in significant revenues to support transportation infrastructure upgrades and improvements. But the Texas Department of Transportation's TxTag toll billing system hasn't gone without its own share of billing concerns.

As electric-powered vehicles render the gas tax more obsolete, both states with and without toll roads are evaluating new techniques to collect funds to improve and expand on roadway projects while enhancing statewide mobility. Is it possible to successfully generate statewide transportation revenue without toll roads? The answer is a bit complicated.

How do states without toll roads collect revenue?

As of January 2023, just over a dozen U.S. states — along with the District of Columbia — don't feature toll roads in their statewide mobility systems.

Among those is Wisconsin, a state largely reliant on its county highway network, said Debby Jackson, executive director of the Transportation Development Association of Wisconsin. That county network is integral for the state's dairy industry, an interconnected system linking farm routes.

Just over a dozen states and the District of Columbia don't have toll roads in the United States. In recent years, some states considered introducing tolls as a form of new revenue to fund transportation upgrades. Source: Uproad (KXAN Interactive/Kelsey Thompson)

Historically, Jackson said Wisconsin has heavily relied on the gas tax to support infrastructure improvements, along with registration and titling fees.

Other available funds include the state's multimodal transportation pool, an allocation that can cover one-time improvement projects such as road repairs, adding shared-use paths and harbor projects.

But when it comes to generating revenue, Jackson said the rise in EV technology has state leaders heading back to the drawing board.

"With increased fuel efficiency and now the move towards electric vehicles, [the gas tax] is going to become less productive," she said. "And so I think every state is going to be looking for alternatives to the gas tax, or revenue streams to shore up the gas tax. And I shouldn't just say it's going to be states — it's going to be the federal government, as well."

And federal leaders are seeking other solutions. The National Conference of State Legislatures began working in December on a study for alternative transportation user fees, joining state lawmakers, legislative staff and private sector partners to look at what options are possible.

The study comes as the National Association of State Budget Officers found fuel taxes comprise the largest portion of state transportation revenues, but have dwindled in the past five years. Come 2050, states are expected to lose as much as $87 billion in revenues previously secured through gas tax streams.

In Wisconsin, Jackson said leaders haven't seen a large number of proposals related to new transportation user fees. However, one option discussed includes road usage charges, where motorists would be charged by the number of miles driven.

"That discussion has been around for decades, but I think it's got a whole new life now that we have this push towards electric vehicles," she said.

Other ideas floated include repurposing a version of the gas tax specific to EVs. That idea proposes a charging fee based on a kilowatt hour, allowing drivers to use fast charging stations while collecting fees based on those uses.

Here in the Lone Star State, a measure similarly aimed at EVs passed both the House and Senate and would implement an annual $200 fee for electric vehicle drivers. It awaits Gov. Greg Abbott's signature of approval.

Wisconsin's EV charging fee proposal comes as the state is poised to receive $79 million in the next few years to expand its electric vehicle charging stations' footprint statewide. Between 2016 and 2020, state documents reported the number of registered EVs increased by an average of 9% each year, highlighting growing industry popularity.

However, that's not to say toll road proposals haven't cropped up in Wisconsin. So far, Jackson said the proposal hasn't generated the kind of political support necessary to make headway in the state legislature.

"We have an outstanding county highway network, because we're the dairy state, so we have all these farm routes," she said. "There's also been considerable concern about people just getting off the interstate to avoid the toll roads and what impact that would have on our local roads that really aren't designed for the level of traffic that might occur if this were to happen."

There also comes the complexity of analyzing growth patterns to determine whether a toll road project would be justifiable. While states like Texas are seeing surging population growth, others like Wisconsin haven't experienced that same kind of increased demand on its roadways.

"We may add a lane to a road, but there have not been new roads [built in Wisconsin]," Jackson said. "Most of Wisconsin is still in the same footprint, so it's not quite the same growth pattern."

In the interim, she said many states will likely turn toward general purpose revenues to help shore up transportation revenues before new financing streams are implemented.

The history of Texas toll roads

Texas joins the majority of states collecting revenue streams, in part, through toll roads. The Lone Star State's toll system dates back to the early 1950s, said Brianne Glover, a research scientist at the Texas A&M Transportation Institute.

A map showing which toll roads in Texas are operated by TxDOT (KXAN Graphic/Wendy Gonzalez)

Historically, she said toll roads have been used in areas where public funding for transportation projects was unavailable, but expanded transit resources are needed.

"When there's a need for new transportation facilities or to expand capacity in a certain region — typically metro areas — then toll financing can come in as a useful revenue," she said.

Back in November 2017, state leadership announced the Texas Department of Transportation would not construct new toll roads, with only expansions or improvements to TxDOT's existing toll systems permitted.

Despite that, Glover said Texas' toll systems remain a strong financial revenue stream for statewide infrastructure improvements, given the sheer population growth and volume of people using those roadways. Toll revenue collections help cover routine maintenance and operations of the tollway, as well as any possible expansions or improvements to it down the road.

"If you have a growing population, as Texas does ... there's a lot of states that have a lot of in-migration, either from other states or just an increase in the population," she said. "You'll notice that they may need extra financing or funding to sort of help keep up with that growth. And so I think it can be an important tool for states that find themselves growing faster than their revenue streams."

But the decision to implement or expand toll roads doesn't come without some pushback, said Chandra Bhat, the Joe J. King Chair of Engineering at the University of Texas at Austin.

He noted the concept of latent demand, or when the construction of a new or expanded roadway attracts even more traffic to it than there was previously and ends up increasing congestion.

"I do think most states are struggling to make sure that they have enough money to maintain this vital system on which we all rely every day. It's how we move people. It's how we may move goods. It's how we make sure we can do those things safely."

Debby Jackson, Transportation Development Association of Wisconsin

However, the cost factor of toll roads — as opposed to non-tolled interstate construction — naturally caps how many people drive on that tollway.

"If we build toll roads, the advance over there is that you're paying for what you use," he said. "And what we actually find is that if we build a new toll road, a good amount of the newly generated traffic — which was not there earlier — tends to use the toll road."

Toll lanes can also serve as managed lanes, which prioritize multi-person traffic such as buses and carpooling, he added.

One of the major issues with toll roads, Bhat said, comes down to accessibility and equity: Who is able to afford to use toll roads? And what are the costs of creating reliability for paying drivers versus those using non-tolled lanes?

"It's a very touchy issue, from the standpoint of equity," he said.

Alongside that, critiques of toll roads can come from those who believe state funding is better used to enhance other infrastructure projects, such as mass transit systems. But the nuance comes down to the fact tolls do provide a dependable revenue stream as opposed to more static or depleting streams like the gas tax, Bhat said.

"Is investing our money in toll roads the right thing to do?" he said. "I think that's the bigger question. That's a very complicated question."

How federal, state governments are looking to adapt transportation infrastructure funding

The alternative transportation user fee study launched by the National Conference of State Legislatures in December is expected to wrap in early 2024. From there, the study could give better insight into ways states can raise necessary revenue to revamp, expand or outright build transportation infrastructure.

"Every state has different transportation needs, and so the way in which they fund transportation reflects that," Jackson said. "I do think most states are struggling to make sure that they have enough money to maintain this vital system on which we all rely every day. It's how we move people. It's how we may move goods. It's how we make sure we can do those things safely."








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