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March 31, 2015 11:20 AM, EDT

Toll Battles Mount as States Seek Cash for Ailing Roads

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As U.S. states collect record tolls from drivers, political opposition to fee-based highways and bridges is threatening efforts to rebuild crumbling infrastructure.

In Texas, supporters of legislation to limit tolls rallied on the capitol steps last week, waving signs reading “Don’t Mess With Texas Public Roads.” Connecticut’s Republican lawmakers have stymied plans to restore toll roads after three decades without them. In Kentucky, lawmakers aligned with the Tea Party have blocked fees the Democratic governor says are needed to replace an obsolete bridge to Ohio.

“The sentiment against tolling has so clearly backlashed,” said Terri Hall, the founder of Texans Uniting for Reform and Freedom in San Antonio, which is fighting them in the state. “You can’t get anywhere without paying.”

The resistance is hampering the ability of states to pay for roads, which has been hurt by eroding gas taxes, a lack of federal funding and a tax-wary electorate that’s given Republicans the most power in the nation’s capitals in almost a century.

A group that includes FedEx Corp. and McDonald’s Corp. has been working to keep Congress from lifting barriers to tolls on interstate highways, a proposal included in the $478 billion transportation bill the Obama administration sent to Congress on March 30. It would give states the power to add tolls on roads that must be rebuilt or are congested, as long as the federal government approves.

“It strikes at the heart of the debate about infrastructure funding and finance in this country,” said Patrick Jones, executive director of the Washington-based International Bridge, Tunnel and Turnpike Association. “People want more roads. They want more and better and well-maintained infrastructure that’s safe, but there’s an unwillingness to pay for it.”

The anti-toll fervor comes as more money is needed for roads than ever. The nation should be spending $79 billion more per year on improvements, according to the American Society of Civil Engineers, which cited Federal Highway Administration estimates.

Advocates say new toll roads help relieve congestion that cost motorists $121 billion in wasted time and fuel in 2011, or $818 per commuter, according to the most recent estimate from the Texas A&M Transportation Institute in College Station.

States have traditionally relied on gasoline taxes to pay for road construction, a funding source that’s been diminished by more fuel-efficient cars. The federal gas tax hasn’t been increased since 1993.

Toll roads have helped make up the gap. There were 5,695 miles of roads, bridges and tunnels tolled in 2013, up from 4,918 five years earlier, according to the Federal Highway Administration. That generated $13 billion of revenue in 2013, compared with $10 billion five years earlier, according to the Bridge, Tunnel and Turnpike Association. The toll miles and revenue were the most ever, the association said.

Republican and Tea Party-aligned groups have pushed back against the shift, arguing that new tolls on existing public roads — or on those built with the help of taxpayer money — are an unnecessary tax.

“If a core function of government is transportation — building and maintaining roadways — that means whatever a citizen pays for that core government function is a tax,” said Texas state Representative Scott Sanford, a Republican from McKinney, a Dallas suburb. “What we end up with is taxation without representation.”

In Connecticut, Republicans this year have blocked Democrat-backed efforts to lift a ban on tolls that’s been in place since the 1980s.

Similar opposition has delayed work on a $2.6 billion bridge over the Ohio River between Cincinnati and northern Kentucky. The bridge has been rated as “functionally obsolete” because it was designed for about 80,000 vehicles a day. It now handles about 172,000.

Lawmakers in northern Kentucky have thwarted legislation allowing for private investment in transportation deals and tolls that both Ohio Governor John Kasich, a Republican, and Kentucky Governor Steve Beshear, a Democrat, say are necessary for the new bridge.

“We cannot let the opposition of a few people on a single project hold us back from making progress around the state,” Beshear said during his annual speech to the legislature in January. “Nor can we close the door on tolls as a partial solution to a major infrastructure need.”

Few states have seen as much pushback as Texas, where toll road mileage has grown faster than almost any other state over the past decade, according to federal statistics.

Since 2007, Texas and its authorities have sold nearly $27 billion worth of bonds for toll roads, bridges and tunnels, 62% more than California, the second-biggest borrower, according to Bloomberg News data.

Toll-backed municipal bonds returned than 9% in the past year, according to Bank of America Merrill Lynch indexes. That compares with a gain of about 4.5% for top-rated municipal bonds. Returns on toll-backed debt have beaten the overall municipal market since 2011.

Tolls proliferated under former Texas governor Rick Perry, who unsuccessfully sought to use them to finance his proposed “Trans-Texas Corridor,” a 4,000-mile network of roads, railways and utility lines through the state.

Governor Greg Abbott, a Republican who replaced Perry in January, campaigned against relying on tolls to meet the state’s infrastructure needs. His plan, a version of which has already cleared the Senate, would funnel a portion of the state’s motor-vehicle-sales taxes toward building and maintaining roads and bridges. He also wants to require that the state highway fund be used primarily for road work, instead of related activities such as policing.

Abbott’s plan will test the feasibility of financing large-scale road investments without resorting to tolls. Texas currently needs to spend an additional $5 billion a year to maintain existing roads and add new capacity. That would swell to at least $7 billion a year if the use of tolling on new road construction was foregone, said David Ellis, a researcher at the Texas A&M Transportation Institute.

“If you don’t do tolls, then there’s a cost,” he said. “The burden for paying for that road has been shifted back to the state and to the taxpayers through motor-fuel taxes and vehicle-registration fees as opposed to being paid for by the people who use the roads.”

Sanford, the Republican lawmaker, said he is staking out his position on fee-based roads because constituents complained about a plan to add a toll lane to a freeway leading from Dallas to Oklahoma. His phone was ringing “off the wall”, he said, with people worrying that the lane would be too expensive. Bills that he introduced would prevent tolls from being placed on existing free lanes and require that new toll roads be paid off and made free within 20 years.

“Wherever you go you’ve got a toll road or a threatened one,” said Sanford. “We’re kind of a gated community now.”