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Saturday, January 11, 2020

Bill to Toll I-80 Gets the Idea Wrong

Finally, there is a legislative conversation about reforms that could lead to less government spending. However, once that conversation opens up, the first contribution from the legislature is one that would actually cement status quo...

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There is good news and bad news in this bill. The good news first: it opens up a discussion about spending reform.

The bad news: it does not propose spending reform. I have to take part of the blame for this, but before I get there, let us review SF 6 itself. The bill, sponsored by the Joint Transportation Committee proposes a toll in Interstate 80:
An act relating to highways; creating a tolling program; granting powers to the transportation commission; defining duties of the transportation commission and the department of transportation; granting tolling authority for interstate 80
In the Purpose section they explain:
To finance, construct, operate and maintain interstate 80 and accommodate the needs of the traveling public through safe, efficient, convenient and modern vehicular traffic it is necessary and in the public interest to provide for the financing, construction, operation, regulation and maintenance of interstate 80 under a tolled configuration. The tolled configuration will allow interstate 80 to be maintained and to be operated in a way that will reduce traffic congestion, delays, hazards, injuries and fatalities.
Congestion? When was the last time you ran into congestion on I-80? 

Maybe they are referring to the occasions when you can't go 90mph because there is a truck passing another truck ahead of you.

The language in the Purpose section suggests that this bill originates in some model legislation somewhere. I always get suspicious of template-written bills, but they are not always bad. In this case, it is of minor importance. 

Anyway, "congestion" notwithstanding, the one real problem with this bill is its organization of the toll authority. Under the sections "Statewide tolling program creation" and "Special toll revenue account" the bill proposes to simply add tolling to the WYDOT revenue stream. They do suggest a separate tolling account with safeguards:
There is created the special toll revenue account. All toll revenues received from the project shall be deposited into the account. All monies received pursuant to the authority of the commission to issue bonds for the project shall be deposited into the account. The account may contain separate subaccounts for each project phase for all toll revenue collected from each respective phase of the project and any monies from bonds issued for that phase. 
And then comes the supposed firewall:
The department [WYDOT] may deposit or permit others to deposit other monies into the account but in no event shall revenues from any tax otherwise available for general purposes be deposited into the account. All funds in the account shall be expended only for the repayment of debt for the project or as otherwise authorized under this chapter. All monies deposited into the account are continuously appropriated to the department for expenditures authorized by this chapter.
The bill authorizes expenses in words that appear to tie all toll funds to the I-80 toll road. However, there are no features in the bill that prevent the toll-road authority, which again would be placed under WYDOT, from siphoning off money to the regular WYDOT budget. I do not mean to be paranoid - although in politics a slight case of paranoia is a sign of sanity - but I cannot let go of the suspicion that some of the toll revenue in the future would be funneled over to the WYDOT general budget.

Adding to that suspicion is the fact that this bill would place the tolling authority under WYDOT. This all adds up to a revenue reform, in other words a reform where we simply pile on more money in WYDOT's budget.

For this reason, the tolling reform proposed in SF 6 is at odds with fiscal conservatism, sound government budgeting and basic principles of economics. It is not going to improve anything except the bottom line in the WYDOT budget.

All is not lost, however. The bill has brought up the road toll discussion and given us a good reason to examine it in detail. Its authors - or someone else - could correct the mistake of designing a revenue-reform style tolling bill, and instead reconfigure it (or write another one) to a reform of government spending. 

Here is how to do it:

1. The tolling authority must be entirely separate from WYDOT. In return, WYDOT relinquishes any responsibility for, and jurisdiction over, Interstate 80. 
2. This new entity - let us call it the Wyoming Expressway Authority - would be funded entirely through tolls for the operation and maintenance of the highway; capital construction would be funded by bonds sold to the public (giving Wyoming residents a first-hand opportunity to invest in it).
3. There can be no other money added to the Wyoming Expressway Authority, nor can any of its toll revenue or bond-sales revenue be used for anything else.
4. Think of the Authority as a utility (in the practical sense; the exact legal definition is for lawyers to figure out) with pricing tied to the cost of operating, maintaining and carrying out construction projects on the Expressway. This would help safeguard against price gouging and abuse of power by management and contractors.
5. Tolling could be done under the EZ-Pass system in operation in several states out east. It is an electronic toll-collection model that does not affect the flow of traffic.

These five points are sufficient to guide a spending-reform oriented toll road project.* If done this way, a toll road along I-80 would reduce the burden on the WYDOT budget and allow us to cut the gasoline tax. If SF 6 was rewritten in this way, or replaced with a bill reflecting these points, it would be a worthwhile project and the beginning of a real effort to structurally downsize government in our state. However, as SF 6 stands now it is only a method for entrenching big government.

Last but not least: I should take part of the blame for how SF 6 is configured. I have been a proponent of tolling I-80 since 2012, and I have written numerous articles explaining why this is a good idea. However, it was not until recently that I realized that I had failed to shed enough spotlight on the distinction between a spending-reform model and one that is simply out to increase revenue. I had taken for granted that this distinction was apparent - a mistake I will not do again.

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*) There is a sixth point to add to this list. It is not essential to the design of a proper spending-reform bill, but it would make the project more attractive. As part of the tolling, the Wyoming Expressway Authority could add two lanes in each direction, to the existing lanes. One pair of lanes in each direction would be reserved for slower traffic and subject to a speed limit; the other pair of lanes would be reserved for passenger cars only and - weather permitting - free of speed limits. As on Autobahn, other traffic laws would still apply, such as "keep right" and "no tailgating". To enforce these laws, the Wyoming Highway Patrol could acquire a fleet of mid-engine Corvettes. (The prospect of driving a Corvette might help the Highway Patrol with recruitment.)

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