Should Low-Income Drivers Receive Subsidies to Use Toll Express Lanes?

Every day on my way home from work I zip by tens of thousands of people behind the wheels of cars stuck in hopelessly gridlocked traffic because they didn’t want to pay the toll (usually between $2 and $10, depending on the direction and time of day) for the open express lanes.

For me, the money spent every day for the right to avoid 10 miles of traffic hell is money well-spent.   I currently spend about $1000 each year for the privilege of driving unimpeded and, truth be told, I would gladly spend double that if I had to.

Those express toll lanes are a beautiful thing – without them I would not be able to endure my daily 38 mile commute and I would most likely be forced to leave my employer of many years to take a much lower paying job closer to home.

Not everybody thinks they are a good deal.

In fact, a lot of people argue that paid toll lanes are inherently unfair to low-income drivers.   They wonder why those who make less money should have to endure a hellish commute while others who can afford to pay for it get to whiz by in relative comfort.

A joint study conducted in 2008 by UCLA and USC actually seems to disprove that line of thought.

According to the study, pay-as-you-go transportation options like toll express lanes are actually fairer to all income levels than paying for road improvements such as additional express lanes through sales taxes alone.

While the study found that toll express lanes are disproportionately used by middle- and upper-middle-income households, it also found that those same drivers would have ended up paying less each year if the lanes would have been funded via their sales taxes.

What troubles me is the study authors’ suggestion that policymakers worried about low-income peak-period commuters could provide discounted subsidy pricing based on income levels, or provide travel credits to lower-income commuters.

Of course, such a suggestion poses another problem.

Since the only way to keep the express lanes flowing smoothly is to raise the prices during times of peak use, the implementation of subsidies would result in other drivers being priced out of the lanes in favor of the subsidized lower-income drivers.     How fair is that?

As usual, when it comes to subsidies and hand-outs there is no free lunch.

Somebody is always going to have to pay.



Comments

  1. 1

    James says

    I am a huge proponent of toll roads. They are a perfect example of how the government should operate. A fee is charged to provide a service, if you want to use that service you pay, if you don’t use that service you don’t pay. Unlike most government “services” where you pay if you use it or not.

    • 2

      says

      For the most part I am with you, James. I too favor toll roads but only if the tolls are used to pay for the construction and continued maintenance of the road for which the toll is being charged. The toll road in SoCal that I use does exactly that (on top of also paying the investors who put up the original money). I believe many governments charge more money than is required for maintaining the highway – for example, I have a hunch that they use the money to fund a good chunk of other transportation department projects. Like I said, it is just my hunch. If I am wrong, somebody please correct me!

  2. 3

    says

    Ummm, heck no. If take public transportation!

    Also, I’m all for raising bridge tolls by 10X to reduce traffic and increase income. Why do I say this? B/c I live in the city, don’t drive, and take the bus. In other words, people vote with their pocket books.

    Easy to say TAX THE RICH when you aren’t the one being taxed.
    .-= Financial Samurai´s last blog ..Play Games To Save Money And Achieve Your Goals! =-.

    • 4

      says

      Oooo, raise the bridge tolls ten times!? What does it cost to cross the Golden Gate and Bay Bridges now? Isn’t $5 for Golden Gate? (It’s been a while since I crossed it.) You have to be careful not raise tolls so high that the gov’t can raise enough to pay for their construction!

      California used most (all?) of its transportation dollars through a state gasoline tax. Of course, the state has been robbing those revenues to pay for other government services for years. Still, I am all for raising the state gasoline tax to help pay for improvement of the highways – assuming the increases are applied only for transportation projects. That method seems to be a fair way to allocates taxes on those who actually use the highways.

  3. 7

    James says

    Len, you are absolutely right about making sure the money collected actually is used for the purpose it is collected. As always the problem with Governments is that once they get a new revenue source they very quickly find somewhere to spend that revenue instead of returning it to the taxpayer. This recent recession gave us a great example of this, in Canada we have an employment insurance fund. You pay approximately 3% of gross salary(matched by your employer) into the fund and if you lose your job you can collect from the fund until you find a new job(or 52 weeks whatever comes first). So where does the money we pay into the fund go…general government revenues, not a specific job insurance fund. So when there were massive job cuts and layoffs during the last year or so people were applying to this fund for cash until they could find new work. Since there was actually no money in the fund, the government had to belly up the cash from general revenues pushing us further into deficit, despite the fact that the fund had $40 BILLION in deposits on paper. The topper to this, despite having BILLIONS in paper deposits on file the government now is saying it will have to raise the rate we pay into the “fund” because so many people have been drawing it down for the last year or so. So they took the money in as “insurance” against job loss for employees, and spent it on???? This is only one example, we have road and gas taxes that get spent on??? Shouldn’t cigarette taxes go to pay for health care…do they…nope.
    There is a very good reason for this. If they did seperate funds, we could hold them accountable for mismanaged funds. When everything is one giant pot of money there is always someone else to blame, if one person is in charge of one small pot of money they can have their feet held to the fire. No one in elected office is going to be that person.

    • 8

      says

      “If they did separate funds, we could hold them accountable for mismanaged funds.”

      Exactly, James. It’s all a shell game devised to allow government to become bigger than it should. If a private sector comptroller or CFO raided company funds for things that they weren’t intended for, he would be thrown in jail.

      Why is our government not held to the same standards?

  4. 9

    says

    Hey,
    First time on the site and already a topic I like.
    Earle Nightingale said in his CD ‘The Strangest Secret’ that society is fixed. Not to prevent the strong from winning, but to prevent the weak from losing. Survival of the fittest (for humans in North America) died with Darwin.
    My personal opinion is that lower income people should be taught tips on budgeting and ways to increase their income.
    I don’t think a wise solution is to teach them dependence on the system.

    Again, thanks for the great post. Would love to have you guest post sometime.

    Cheers,

    Guy
    .-= Guy G.´s last blog ..The Mind/Money Equation — Tips on Budgeting =-.

    • 10

      says

      Hey, welcome aboard! :-)

      Sage words, Guy. I see you and me think a lot alike. Unfortunately, the forces of big government love to hand out subsidies to the populace as a means of maintaining their grip on power via, as you said, the electorate’s “dependence on the system.”

      What is scary is that many of those who have become slaves to these handouts fail to see themselves as being shackled by the system. Ironically, those of us who are trying to break the cycle are attacked by those who want to maintain the status quo as being uncompassionate.

      I’ll get off my soap box now. :-)

  5. 11

    says

    This is not a rant. It’s a public service message.

    Toll roads are a scourge that were foisted upon us by wealthy developers. They shuffled their cost for building roads to their new home sites onto drivers and taxpayers.

    With all of the gas taxes that Californians have paid, all of the roads in our state should have been built as freeways. But, the state Government swindled our gas tax money into the general fund, while Caltrans sat on a 5-year backlog of construction projects.

    Then, the Government gave away our public land in the middle of the 91 Freeway and signed a non-compete clause, so the freeways can’t be improved. On top of that, we are obligated to maintain the Toll Roads at taxpayer’s expense, which seems pretty unfair to the people who can’t even afford to drive on them.

    Someone should have gone to jail for the way the Toll Roads were built. It was about as crooked as a dog’s hind leg. And, it goes against fair use by the masses, which is what the gas tax was supposed to do, before it was siphoned off to cover deficits. It was a glaring example of corruption. It was wrong on every level.

    By the way, if anyone in California is even remotely considering voting for Jerry Brown, you should know that he refused to build even a single mile of freeway when he was Governor in the ’70s. And, it took decades to unsnarl the traffic nightmare he created. Plus, he raised the state budget by 167%, while our infrastructure decayed into ruins. Just a word to those who are unfamiliar with his past “accomplishments”.

    • 12

      says

      The 91 Freeway was a debacle, but they are trying to turn it around. For example, they finally got rid of that non-compete clause and they are FINALLY making some substantial improvements to it (adding additional non-toll lanes).

      And you are so right about Jerry Brown. He has the same mentality that the current majority of the legislature has – so it is no wonder California is almost bankrupt.

  6. 13

    says

    @ Guy G.

    I used to have The Strangest Secret on a cassette tape back in the ’90s and I listened to it in my car, on my way to work. I loved that tape so much I completely wore it out. The message was so simple and powerful. And, Earl Nightengale’s voice was awesome.

    I wonder if I can find it on an MP3?

  7. 16

    gino says

    i think driving is hard enough on low income peoples. Not only is insurance expensive, they also have to deal with things like this. i personally find tolls frustrating, and im sure they do too. It makes commuting to those necessary places so much more difficult.

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