Year of Publication

2014

College

Martin School of Public Policy and Administration

Degree Name

Master of Public Administration

Executive Summary

As states awaken to the realization that large, expensive surface transportation projects can no longer be undertaken given the constraints of current funding mechanisms, policy makers are beginning to rely more heavily on tolling as an alternate means of funding desperately needed infrastructure projects. Tolling technology has evolved considerably from the traditional cash collection that was prevalent fifty years ago to all electronic, high speed, open road tolling that allows vehicles to maintain highway speeds as they traverse tolling points. This relatively new technology has substantial benefits, but has inherent risks that left unaddressed could result in failure to collect toll revenues in a fair, efficient, effective manner.

For states moving toward tolling as a means of project funding, the ability of toll authorities to collect tolls accurately and efficiently is paramount. If toll authorities implementing electronic tolling fail to operate to their fullest potential, states risk not being able to fully satisfy the debt service requirements of bond holders that provide the capital needed to move forward with infrastructure construction. This endangers the ability of the state to finance future road and bridge projects.

As toll authorities implement all electronic tolling (AET) systems, they may look to other states for guidance where such technology has been successfully utilized in the past. However, this is an incomplete analysis. Different toll authorities experience unique circumstances and challenges that limit the ability to apply lessons learned by examining one authority to operations of another authority. This paper systematically examines nine tolling authorities over a ten year period using statistical analysis to identify factors under management control that are consistently associated with successful tolling.

The findings indicate that there are two important actions that managers can take to contribute to the success of electronic tolling. The first is to set the toll rate sufficiently high such that it is “worthwhile” for the authority to collect a toll. Toll rates that are too low, while potentially attractive to motorists, reduce the efficiency of the authority in collecting revenues. Secondly, large toll authorities should take steps to increase the number of vehicles that pay tolls through electronic means and minimize those that pay through cash or video invoicing. Small toll authorities should pool their operations with other authorities in order to make investments in electronic tolling cost effective.

While the analysis is subject to some limitations, it provides additional guidance and comfort to toll authority managers initiating new toll systems. When combined with case study analysis, managers should be able to use this paper to inform decisions about how to structure their tolling systems to ensure efficiency is optimized and the likelihood of collecting revenues sufficient to repay financial obligations is maximized.

Share

COinS