Tolls vs. Taxes - What's The Difference?
Sally Baptiste, May 10, 2005

Most people would agree that our highway infrastructure is in bad shape and in need of serious repairs and improvements, but there is much disagreement as to how we should we pay for them. The question of "tolls vs. taxes" is always part of the debate.

But let's be honest - a toll is a tax! "Toll" is just another word for Tax. As I have defined it, a tax is any money paid to a governmental agency for providing a service to the public that cannot easily or competitively be provided by the private sector AND the service is required to protect and promote the general welfare of the people.

So, when talking about the cost of transportation, we need address the public need and compare toll taxes to other transportation taxes. To do this, we need to answer a couple of key questions:

1. Yes. The highway system easily promotes the general welfare of all Americans. There can be absolutely no doubt about this fact. The fact is the highway system is critical to our economy and our quality of life. Everyone (including individuals that don't drive) is affected by our highway system. It is also important to note that the highway system is not a service that can be provided in a competitive market place. How many expressways can be built in one community? We must limit and properly manage the construction of our highway infrastructure.
   
   
2. No. Toll taxes are the most expensive and ineffective transportation tax. The costs of toll collection systems are substantial. These costs include all standard overhead costs such as salaries & benefits, administrative costs, operational costs, etc, etc. Then on top of that, the excessive costs of electronic collection systems, toll booths and toll collector wages. And we haven't even begun to pay for the highway! Now compare the cost of collecting additional transportation revenues through existing revenue streams. For example, the gas tax. The average toll rate is 15 cents per mile. This is equivalent to a $3 per gallon gas tax (these figures were taken from http://www.cashtrap.us/why.htm). Additionally, toll taxes create more gridlock by not allowing/affording everyone access to the expressway system. This means more gridlock on secondary roads. More gridlock means more pollution. Thus, the cost of toll roads cannot be limited to the actual highway construction costs. The public would be better served for a lot less money by increasing highway revenues through registration fees, gas taxes, tire taxes and licensing fees. The profit margin from these sources is much greater and there is no need for any new governmental agencies (aka bureaucracies). For example, a small tax increase in the registration fee that is dedicated to highways would go a long way to raising the necessary highway revenues. Based on FL 2002-2003 figures, increasing the registration fees for passenger cars and truck by $10 would increase highway funding by $131,832,620 in just one year. That does not include all other types of highway vehicles (trailers, motorcycles, RVs, etc.). There are basically no new costs incurred for this increased highway funding. Thus, a net profit/increase in highway funding. At the same time, this option allows full utilization of the expressway system and reduces gridlock. It is also important to note that these taxes are all "user fees". Those who do not drive or use the highways are not taxed. Less taxes = more mobility. There are other tax revenue streams such as tourist taxes, car rental taxes, car sales taxes that would also provide better options than toll taxes. These methods of tax collection have virtually no new or increased collection costs associated to them because they use the existing tax collection methods without the substantial overhead like the costs of operating multiple "Expressway Authorities". If the real goal is improved mobility for the least amount of tax dollars than toll roads are not the answer. The truth is Tolls Create Gridlock! Tolls Limit Access to the Expressway System!
   
   
3. Yes. Toll taxes are a very regressive tax. Lower income commuters cannot afford the toll taxes. Middle income commuters lose disposable income that could have been spent in the local economy. Thus, reducing other tax revenues and taking money out of the local economy. In Central Florida, it is not uncommon for commuters to spend $80-$100 per month in toll taxes. This is a significant amount of money for lower/middle income commuters and families. Additionally, toll taxes increase the cost of living by increasing the cost of transporting goods and services. Small businesses are also hurt by this regressive tax. No matter how you do the math, toll taxes hurt the lower/middle class the most and they take money out of the local economy.

These are not the only reason that toll taxes are wrong, but in my opinion, these reasons represent the key problems with toll taxes. There are better options to raise revenues for highways without limiting access to the highway system. In my opinion the best option is the option that does the most to improve mobility for the least cost. Everyone benefits from an efficient and effective transportation system.

Everyone understands that roads are not free. Our roads have never been free. The motorist has always paid for the roads. The real transportation problem we face today is in the area of accountability by elected spenders who have mismanaged our transportation tax dollars for many years. Our transportation policies are in big need of reform. Unfortunately, reform can only occur when our elected leaders focus on real solutions instead of new tax revenue streams. Please think about the following transportation facts when you pay that toll:

TOLLS CREATE GRIDLOCK!
TOLLS LIMIT ACCESS TO EXPRESSWAYS,
THUS CREATING MORE GRIDLOCK!
LIMITED ACCESS MEANS MORE
CONGESTION/GRIDLOCK ON SECONDARY ROADS.
TOLLS ARE A DOUBLE TAXATION and
EQUATE TO ABOUT $3 PER GALLON GAS TAX!

For more information on transportation and toll abuse, please visit my website at www.tollscreategridlock.org or email me at Sally@tollscreategridlock.org or info@tollscreategridlock.org.