Op-ed

June 1, 2005

Highway funding system in serious need of repair, innovation

Kumares C. Sinha

Indiana and the nation must come to grips with a transportation-funding crisis that threatens our ability to preserve and expand an aging and overused highway system that historically has been maintained primarily through fuel-tax revenue.

As cars become more fuel efficient, and hybrid vehicles become more common, less fuel will be consumed, providing less revenue for the transportation infrastructure.

In fact, the state already suffers a highway funding shortfall. It has been estimated that Indiana will have a funding gap of about $1.5 billion at state and local levels each year during the next decade or so. That means we cannot keep up with needed maintenance and safety improvements, and we also are unable to add much to the capacity of our transportation system.

Meanwhile, a continuous rumble of interstate truck traffic across Indiana necessitates expensive repairs. Most recent estimates indicated that diesel tax and other revenues from heavy vehicles paid only about 60 percent of the costs caused by them. A few decades ago, we would have been surprised if heavy vehicles amounted to 10 or 15 percent of the total traffic flow on Indiana highways. Now it is not unusual to see the figure swell to 20 or 30 percent at any point in time on our highways. And in northern Indiana, you may see truck-traffic surges of 60 percent or more on the Borman Expressway during certain hours.

Put simply, our highway pricing system is in need of major repair. It is not capable of generating a fair share of revenue from heavy vehicle traffic, and the cars, particularly in urban areas such as Indianapolis, are not being properly charged either.

The time has come to initiate a different kind of pricing system that includes several innovative revenue-generating methods to augment or even to replace the fuel tax.

One approach would be to create a system that charges car owners according to the number of miles driven and truck operators according to tons carried and miles driven. With simple technologies such as on-road sensors, radio-frequency transmitters and global-positioning devices, a new pricing system can be reliably achieved. Some states and other countries are experimenting with value pricing – the concept of charging higher rates to drive during peak hours when highways are most congested or when traveling to certain areas that are burdened with the highest traffic loads.

Area wide electronic road pricing is already in use, for example, in Singapore, where value pricing also has been in place for decades – motorists pay a toll to enter the city center during peak hours. Many cities in the world, including some in the United States, are implementing various forms of value pricing.

The technologies exist to create toll roads without tollbooths. These technologies not only would make the pricing system more equitable, but they also would save travel time and make the interstate truck traffic seamless by eliminating weigh stations. Another option is to have exclusive truck toll lanes within highly concentrated heavy vehicle corridors.

There is also a possibility of having the private sector involved in building and/or operating toll roads, a method that has been in use in Europe for many years and is being pursued in several states, including Illinois, Texas and Virginia.

And government also could work jointly with private developers to sell property that is bound to become more valuable due to the planned addition of highway interchanges, where commercial businesses naturally sprout up. Profits from real estate sales could be funneled into highway funding.

Indiana should start seriously addressing its need to create a new pricing strategy and begin generating more revenue for the state's vital highway system. After all, we are the "crossroads of America."