06 January 2010
Transportation commissioner George Campbell told the Salem selectmen last week that state government plans to build tollbooths in their town. The Salem toll plan isn't really about Salem. It is part of a broader plan to increase state spending on transportation.
In New Hampshire, tolls and toll increases must be proposed by the commissioner of transportation, not the Legislature. They must then be approved by the governor and the Executive Council. The commissioner has told Salem he wants a toll, but we don't know whether the governor or councilors are supportive.
Current law allows tolls on the 93 miles of highways designated as the turnpike system. All the money generated by those tolls must then be used exclusively on the upkeep of those roads. The toll is therefore a user fee. It is not a source of revenue for general operations. That is, it is not a tax. It can be used only on the specific roads for which we charge a toll.
The gas tax is the largest source of revenue for other road needs. The gas tax pays for almost all our highway spending and even some tangential things in other departments, although the diversions are decreasing since the state passed a spending cap a few years ago.
The gas tax is a moderately efficient user fee. Bigger cars use more gas; people who drive more use more gas and pay more. In addition, the collection costs are minimal. Very little of the money collected is spent on administering the collection system. Yet taxpayers are cynical about gas taxes, partly because the highway fund has been so easy to raid.
Because tolls and the turnpike system have been more ironclad, people are much less cynical about tolls. The money really does stay in the system, even if a huge percentage of the tolls collected go merely to running the tolls. As a result, tolls have been politically easy to raise.
Political reality has not been lost on Commissioner George Campbell, who has been eyeing toll increases to fund the rest of the system for the last year. At the beginning of the last budget, he told a business group that New Hampshire paid fewer tolls per mile than most states and had plenty of room for increase. Then the governor proposed and he adopted a plan by which we would sell a piece of highway to ourselves so that $15 million a year in turnpike funds could be transferred from the turnpike fund to use on other highways, funded by a toll increase.
The commissioner also wanted all interstate highways made part of the turnpike system to weaken the restraints on toll use. Fortunately, the Legislature said no to that plan, which I termed the great turnpike robbery of 2009.
Now he needs permission not just from the council and the governor (from whom we have yet to hear), but also from the federal government, which must approve putting a toll on a not previously tolled federal highway.
The real reason for Salem tolls is to fund the rest of the state's highways. Campbell told Salem that he wants to use tolls to widen Interstate 93 and spend the money budgeted for that project in the rest of the state.
At the heart of all this is a debate about the thing we pretend is a 10-year highway plan. For years, the "10-year plan" contained about 30 years' worth of projects and was little more than a wish list. The last commissioner pared it so that it had $2.3 billion of projects and $2.1 billion of anticipated funding. Cleverly, the so-called plan became a little more realistic, but administrators could talk about a "deficit."
A new 10-year plan is being developed. The draft plan endorsed by the commissioner and the Executive Council is again a "plan" to spend $200 million more than anticipated revenue. This makes pressure for tax or toll increases inevitable.
I have a radical thought. Before we discuss any toll increases or other tax increases, we should develop a "10-year plan" that spends the revenue we have and not a penny more. Then, when we want to increase the gas tax, tolls or any other quasi-user fee, we can weigh the cost versus a proposed set of additional projects that might be funded. Perhaps then the so-called plan might actually be a useful planning document.
Charles M. Arlinghaus is president of the Josiah Barteltt Center for Public Policy, a free-market think tank in Concord.