Wednesday, July 05, 2006

USA Today on the Bandwagon

And willingly paying its tolls:

In the past decade, usage of interstates rose by more than 30%, according to the Department of Transportation, while additions of routes and added lanes increased capacity by only 4%. The problem is simple. Gasoline taxes and tolls, already unpopular, provide a fraction of the money needed to keep traffic from getting worse.

Now comes an idea to get around this problem. A number of states, most visibly Indiana, have proposed leasing major toll roads to private companies. By doing so, they can raise billions of dollars needed to make road improvements elsewhere.

....Indiana provides an example. ...Mitch Daniels .... solution is to lease the Indiana Toll Road, which stretches 157 miles across the top of the state, for 75 years. The winning bid of $3.8 billion — more than anyone expected — was accepted last week. He also wants to finance construction of a new portion of Interstate 69 south from Indianapolis by offering it for lease when finished.

Similar proposals involving new or existing highways are sprouting up from New Jersey to California. They have many selling points:

• They raise enormous amounts of money....

• They reduce congestion. The higher tolls that private companies will charge in return for their big payments inevitably will be unpopular. But unless the laws of supply and demand are applied to road capacity, drivers will pay in the form of lost productivity while waiting in traffic.

It's gotta be embarrassing when the professional economists know less economics than the editorialists at USA TODAY

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