To the editor:
One more thought on the toll discussion has to cover the economics involved. One of my professors in graduate school used to say, “The world is full of good economics and bad economics — be sure you can recognize the difference.”
A toll is actually a use tax. If the road is used, a tax is paid. If it is not used, no tax is paid. Certainly, it collects money as all taxes do. Further, a use tax is used by governments to regulate its usage.
For example, if Jim wants to use the road at 2 a.m., the lowest possible tax is charged. If John wants to use the road at 8 a.m. or 5 p.m., he pays the highest toll available. Thus, it is used to provide incentives for the user to evaluate their road needs and budgets and select the best usage.
This type of regulation is for the benefit of all users as it attempts to minimize congestion and disperse drivers. This is a textbook example of a public good, which is usage with very little or zero cost to the driver, providing that the last vehicle entering the road does not add to the congestion.
If this additional driver increases the wait time and danger for all vehicles, the road briefly is no longer a public good. In other words, my usage should not cause more congestion for someone else.
A new road or bridge will have a gravity effect that draws drivers to use it for a number of reasons. This new gravity is expected to cause new and increased congestion to some level, which could cause additional unexpected time delays and potential collisions. This will have a cost to society and economic development in the area, which is often minimized in road discussions.
Additional vehicles will come to the bridge expecting a safer and quicker route across the bay. Is a quicker and potentially safer journey over the bridge worth a charge to help pay the expense for this choice?
Further, additional congestion will pollute the air that coastal residents breathe. This point is a major concern to this author’s friend who suffered at one time from serious pneumonia partially caused by polluted air in another location in Alabama.
The gravity effect and additional vehicles creates a real need for an increased level of constant maintenance in road condition and persons using the road. The tax is a means to finance this need.
Good economics involves individual choices and finding the money to pay for those choices. We have to ask the constant bridge users how much of their usage is based on personal choice. If a worker has a job in Mobile and elects to live in Baldwin County based on a personal reason, should the application of good economics expect that individual to pay the tax based on a personal choice to commute?
Good economics also allow for price differentials that we see and use every day. A good example is the movie theater that charges one fee for adults above 12 and another lower fee for children below that age. Notice that two groups have been identified and the groups cannot mix. Another is parking at the airport that collects one fee for short-term and another for long-term. Price differentials are known as good economics and collect more money compared to a constant tax on everyone.
The additional revenue can be seen in a simple example. Consider the current proposal for a toll of $6.50 per vehicle and 100 vehicles, which equals a total of $650. A price differential might be: 50 heavy trucks at $15 each = $750; 40 RVs at $10 each = $400; 10 cars at $1 = $10
For a total of $1,160 or an additional $510. Differential rates exist at a number of locations in the U.S. Seattle, for example, sets the tolls by the number of axles and time of usage.
A recent report from the ALDOT contains a proposed differential schedule that deserves further examination. It contains six classes of vehicles ranging from two-axle vehicles, including cars and motorcycles, to heavy trucks pulling trailers. The proposal is good economics and allows for additional tolls in each class to distribute usage.
For example, the Chesapeake Bay Bridge Tunnel has special fees for return trips in 24 hours and times determined to be peak or off-peak with other fees. One bridge examined allowed for car fees to be reduced by 50 percent if the use was off-peak.
Should user fees be the only solution to finding funds, the Coastal community needs to see several price differential schedules such as the one in the MDOT report with appropriate estimates of projected vehicles. If the usage count is 95,000 or more, what is the expected vehicle distribution among the classes and what is the expected revenue from each fee schedule?
Let local residents examine and ponder the various amount of funds supplied by the long-haul vehicles and tourists compared to funds generated by local residents.
Don Epley, PhD Economist
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