by David Zylberberg
Last week I presented some of my research at a conference in Boston and drove from Toronto in order to do so. I have not driven in the north-eastern United States in a few years and was quickly surprised to learn that I-90 for most of its length from Buffalo to Boston has become a toll road known as the Thomas Dewey Thruway and the MassPike. The existence of tolls on a previously free road made me think about the relationship between how roads are paid for and other economic behavior.
The tolls to get from Buffalo to the Massachusetts border were $14 for my car, with a further $3.50 to get from the border to Boston. Gasoline Taxes are also lower in the United States, so at $3.39/gallon (rather than $1.18/litre in Toronto) it cost me about $15 less to fill the one tank required to get from Buffalo to Boston. In Canada, the added taxes that make gasoline more expensive contribute to the construction of roads, so are somewhat analogous to the tolls charged on some American highways and bridges. My car is fairly efficient on fuel, so while I paid about $3 more to drive on I-90 than a similar Canadian road, a larger and less-efficient vehicle would have paid less to drive on American turnpikes, despite the tolls. Which transactions are taxed affect behavior and it is worth noting that vehicles tend to be somewhat smaller in Ontario than in New York. To the extent that limiting gasoline consumption is important for limiting the problems of peak oil and climate change, New York would be well served to institute much higher gasoline taxes to replace tolls on the interstate. Such high taxes would also affect behavior on the many non-toll secondary highways and local roads. It would also be more efficient to increase gasoline taxes as they would not require building toll booths or having people collect small tolls, like the $0.15 charged when I made a brief stop in the suburbs of Buffalo. Continue reading