The Obama administration wants to give states more ability to charge tolls on existing Interstates:

In a major shift for how governments fund transportation projects, the administration wants to let states charge tolls on interstate highways. A federal ban currently bars states from doing so in most places, but the latest White House push could change that.

Tucked into the GROW AMERICA Act, the White House’s $302 billion transportation bill, is a toll provision that calls for eliminating “the prohibition on tolling existing free Interstate highways, subject to the approval of the Secretary, for purposes of reconstruction.”

It also allows states more flexibility to use toll revenue for repairs “on all components of their highway systems.”

The proposal reflects the growing need for new sources of funding to maintain the nation’s aging transportation infrastructure. But it’s also a slippery slope — any driver knows that once a toll is in place, they become a handy tool for milking motorists. Tolls, for instance, just increased on I-95 and elsewhere in Maryland last year.

Of course, we wouldn’t have to engage in slippery slope Interstate funding if we more properly funded Interstate construction and upkeep. Fox, I presume, looks at this as a new tax of sorts. But more than anything it’s a biproduct of our unwillingness to consider higher gasoline taxes.

It should also be pointed out that this addresses an issue through a mechanism economic conservatives and libertarians should generally support, which is that it’s user-fee based. The percentage of highway funding taken care of through usage fees has declined precipitously as costs for an increasingly complex automobile infrastructure have increased but the gas taxes have remained static. But we want things built and building things costs money.

I would be perfectly find with insisting that virtually all roads be usage-funded if it weren’t for the regressive nature of such a funding system. I tend towards skepticism of Vehicle Miles Traveled (VMT) taxes, in addition to tolls and the gasoline taxes we pay in part due to the slippery slope concerns Fox has about increasing tolls. But… the solution to that is increased gasoline taxes, which I doubt Fox is in favor.

It’s been a bit of a shock to the system how many tolls we have to pay for roads out here. My inclination is to wonder why we can’t do this through gas taxes, but there definitely are cases where you pass through an entire state without refilling the tank. In those cases, it does make sense for it to be toll-based. And the user-based approach is inherently problematic off the major thoroughfares. Ideally, we would put GPS in our car and monitor our driving habits for better federal and state funding allocation. Perhaps then we could rely almost exclusively on a VMT (taking into account weight and perhaps environmental impact if we want to get Pigouvian about it). That would, of course, require a trust in government institutions that is now lacking.

In addition to the ability to add tolls, it will also increase variable price tolling. I have mixed feelings about that. Jonathan Last discusses peak pricing in his article on High-Occupancy Toll lanes:

At first the economists fixated on “peak pricing,” that is, charging a toll during rush hour. But flat tolls were a crude mechanism. What they longed for was a dynamic system that would always reflect the “true” cost of usage. In 1993, two economists at the Reason Foundation, Gordon Fielding and Daniel Klein, proposed a regime of variable pricing: When traffic was light, the toll might be 50 cents; when traffic was heavy, it might jump to $8. Dynamic pricing would force drivers to pay a true price to avoid traffic. The market would then cause driver economicus to regulate his behavior in the most efficient manner.

The creation of cheap, passive Radio Frequency Identification transponders in the early 1990s made dynamic pricing possible. Drivers registered for transponders (such as the E-ZPass system in the northeast, or SunPass in Florida) that were tied to a credit card. Tolls could be collected electronically while the car was moving. With the problem of collection solved, adjusting prices on the fly was easy. All that was needed was a system of sensors at on-ramps and exits to track the movement of vehicles within the network and a computer algorithm that could raise or lower prices so that traffic volume in the HOT lanes was kept moving at some predetermined minimum speed, say, 50 mph. The first HOT lanes in America, on SR-91 in Orange County, California, opened in 1995.

I support variable pricing at least in theory, but start having a problem with it when it’s as opaque as described here. Not that I mistrust whatever formula they’re using, but that it’s hard to use prices to nudge people when they don’t know at the outset how much it’s going to cost before you leave. Raising prices from the hours of 7-10 AM and them from 4-7 PM on Monday through Friday to nudge people to modify is fair and predictable. Adding costs because as it turns out on 2pm on a particular Tuesday there are a lot of cars on the road on that day is adding insult to injury as their blood pressure is rising and they are stuck in traffic. There’s not much nudging to be done when they’re already out in traffic.