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Tolls In Massachusetts - A Welcome Update

After ten years or so of writing about the inefficiency of Massachusetts roads and infrastructure, I am happy to finally provide some good news: The toll booths in Mass, on the Mass Pike, on the Tobin Bridge and potentially elsewhere, have been replaced by high speed automatic tolling. 

Such a change will eventually reduce toll backups and the ensuing pollution, greatly improve safety and will efficiently collect user fees for those who choose to take advantage of the state's highways and bridges. For those on a tighter budget, alternative routes exist which are free. The state should consider installing tolls in other areas of the state (again such as Route 3 headed south to the Cape) to generate the needed revenue to widen and expand these thoroughfares as well.

This is a fair and efficient way to collect funds for those who use express highways, and allows the state to continue to improve the infrastructure. Way to go Mass!

The Massachusetts tolls system consist of the entire length of the Massachusetts Turnpike, from Logan Airport in East Boston to the New York border, as well as the SUMNER TUNNEL (outbound from the airport), the TED WILLIAMS TUNNEL (outbound from the airport) and the TOBIN BRIDGE (inbound to Boston).

Toll money allows the state to repay bonds originally issued to help build this infrastructure.

More on Tolls

Tolls can sometimes be a controversial subject to those who are outraged by the requirement to pay for using roads and bridges. As best as I can tell, the feeling is one of being literally nickeled and dimed, every time one has to run across a certain route. However tolls are potentially one of the fairest and most effective forms of taxation in existence because they literally offer one a choice of paying or not paying the tax, and a direct benefit if they do pay it.

Tolls are in use throughout the world, and while people may balk at the $4 bridges and $7 highways, consider that in parts of Western Europe, comparable tolls can be three times that amount. The basis for a toll is to issue a bond for the building of a roadway, bridge or tunnel to collect the money up front. The bonds are sold to citizens, who then are paid a regular coupon amount for a certain number of years, or they are paid at the end of the term of the bond, a larger amount than their purchase price. The tolls collected essentially fill up the fund which will be required to pay back the lenders. The other way to pay for roads (and this is how most roads are built) is to use current tax money, which often is not enough at one time to fund expensive infrastructure projects. Additionally, tax money comes from all residents in a jurisdiction, rather than from those who will actually use the road, bridge or tunnel. In some states such as Massachusetts, toll roads are actually privatized, meaning that companies are actually granted the rights to build a road and collect toll money for it for a certain number of years, after which they will grant the road back to the state. This removes the government involvement in the whole process, cuts red tape, and in theory creates an incentive for the builder to be faster, more efficient and less corrupt than the government might be. The state gets a say in what the toll amount will be but essentially if the toll is too high, people will just avoid the road. Because of the unique funding arrangement of tolls, the roads are often maintained better than tax funded roads because instead of having to apply for funds every time a repair is needed, projects are pre-funded by the bond.

Other than objection to paying them, tolls have traditionally created other problems such as:

  • Requiring extra real estate for toll plazas
  • Causing traffic jams and pollution at plaza backups
  • Causing traffic accidents at the plazas

Automated tolls have greatly reduced these problems as well as lowered costs for collection. Some states such as New Jersey and New Hampshire have even installed high speed toll readers which allow drivers to maintain their highway speeds as they pass through the plazas. The evolving technology along with good toll plaza design continues to improve the shortcomings of tolls, making their justification harder and harder to dispute.

Peak Adjusted Tolls

Many European countries use a three period pricing system in place for the tolls on highways, especially near large cities. During peak periods such as rush hour and vacation periods, the tolls are the most expensive (red zone). At other times, primarily in the middle of the day, the tolls are at their normal level (yellow zone). And late at night, the toll price dips to a discounted level (green zone).

This oft overlooked system in the US, is a tremendous opportunity both for funding and traffic management. Those who must travel for work pay the highest tolls, but the assumption is that if you work in the city, you generate enough income to be able to afford it. Additionally, because the toll is a work expense you might be able to deduct the tolls from your taxes. It creates an incentive for people to travel at night. For example, people who go out to the countryside or the coast on summer weekends, will receive a discount if they delay their travel until later in the evening. This reduces traffic at peak hours and less traffic also means less pollution.

The Cape Cod Expressway

I used to go to the Cape in the summers as a kid, with one of my best friends whose family owned a house there. And one of the things that came hand in hand with going to the Cape was the long boring ride and the crazy backups on Friday afternoon. In those days, we had CB radios not cell phones, and I can remember talking with our friends who were also crammed into the back of their family Grand Torinos watching the red lights on Route 3. Today, I view the Cape commute with less sentimentality and more practicality, wondering why the state has never considered what I'd like to propose:

Why not build the Cape Cod Expressway, a two lane toll only widening of the existing Route 3, from the Braintree Split to the Sagamore Bridge? Here is how it would work:

  • The project gets auctioned to a private company or corporation
  • Whoever wins the auction gets exclusive use of the land needed to build the expressway. They can collect the tolls and operate and maintain the highway, based on an agreement to be prearranged between them and the state. After an agreed period, lets say 30 years, the highway is bought back for an agreed price by the state
  • The expressway would have fewer exits than the existing Route 3, being designed primarily for those going to Cape Cod. There would still be a few major exists though, perhaps to Hingham or Weymouth, at Route 44 and or at Plymouth.
  • The first portion of the expressway would run to Hanover or Plymouth and then return traffic to Route 3, allowing portions to open up earlier than the final construction date.
Why it would work:
  • By putting the project into the hands of private industry, there would be less corruption and more incentive to be efficient and to complete the project in a timely manner. The road would still have to comply with all local and federal highway codes and would be under constant inspection for safety. This is already being done in places like California.
  • The highway would compete with the free Route 3, thus creating a competitive environment. Tolls would have to be set at a level which people would be willing to pay in order to avoid the traffic backups. The idea is that most people who go to the Cape on weekends, have a little extra disposable income, and thus would be happy to fork over a few dollars to avoid the backups and traffic. If the toll is too high, people will take Route 3, and if its too low then the company doesn't collect enough money.
  • The project would put thousands of people to work for many years working for a corporation, rather than the government, and would eventually reduce traffic and pollution.
  • The project would cost the taxpayers very little because the buy back price would be accrued over several decades and would be far lower than the cost of floating a bond and having to pay interest. It is assumed that the private company would build the road more cost effectively than the government as well, so the state would simply be paying for a finished road with no interest.
  • Those who do not wish to pay the toll in favor of a faster ride, can simply take the free alternative.
  • The auction winner would:
  • Get a 30 year building contract on which they would generate a fair profit based on the fact that they win the bid from other bidders.
  • Get a 30 year annuity to collect tolls
  • Get a buyout promise after 30 years
  • Get the prestige of having built and run a major highway

Major obstacles:

  • The biggest obstacle would be the knee-jerk reaction to anything that has a toll.
  • The second biggest obstacle would be the evaluation of whether the number of commuters who use the expressway would generate sufficient revenue to fund the project but this is something that can be accurately evaluated up front.
  • The third biggest obstacle would be traffic created during construction, but with strategic segemented building this could be managed.

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