The Economic Case for Free Bridges and Roads

[ashling]

http://www.governing.com/columns/eco-engines/gov-economic-case-free-bridges-roads.html

Back in the dark ages of the late 1970s, at Carnegie Mellon University in Pittsburgh, my professor in Economics 101 said the ideal price for crossing a bridge built at public expense was zero, provided it had capacity. Setting as low a price as possible means that more people will cross it, and thus the cost per person per crossing will be the lowest, compared to the cost of constructing and operating the bridge. A private company would maximize revenues, but government should maximize usage, he said. That way the public, who paid for the bridge, got the most for its money. This principle, he said, should be applied to all public goods

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We’ve forgotten this, if we ever knew it. Evidence of this is everywhere. California, Texas, Virginia and other states are experimenting with having private companies build toll roads, with the high tolls paying for some of the capital or operating costs. The Federal Highway Administration, under President Obama, has asked that tolls be allowed on the Interstate Highway System, something prohibited on these “freeways” in the initial legislation. Commentators have argued that subways and other types of mass transit should pay their own way through higher fares. And in New York City, populist Mayor Bill de Blasio has rejected direct public funding for the popular but cash-poor public bike program, forcing it to raise the cost of its annual passes.


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When we move from the domain of transportation, we see the principle at work in an institution generally supported by the entire bandwidth of political opinion: public libraries. We don’t pay for libraries through check-out fees on books. Instead, we allow nearly unlimited use of all the books -- for free, paid for through general taxes. If we did require user fees to pay for libraries, the institution would shrink to a small room harboring a handful of dogeared bestsellers.



None of this means that public institutions shouldn’t be run efficiently. It also doesn’t rule out agencies acting like capitalists in indirect ways, like developing land directly around stations or highways or operating a museum shop. But we shouldn’t forget there are public values, even in economics, which differ from those applied to private business.

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I use this in my govt. classes

[liberal N proud]

1. What gripes me about toll roads: Double taxation

You still pay taxes to pay for the repair and upgrades on the toll road.

If you fill your car up while driving the toll road, you still pay the gas taxes which are intended for highway funding.

So I pay a gas tax to pay for the road that I am paying to travel.

Have it one way or the other, fuel taxes should be lifted for vehicles traveling the toll roads.