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December 2013 Policy Study, Number 13-10


Fuel Tax:  What Is a Fair System for Iowa?


Tolling and Fees



Tolling and fees are not as readily used in the United States as they are in other counties. But they are still an important source of revenue that needs to be considered when states are trying to figure out how to pay for transportation projects. Currently, only about 5 percent of revenue from highway user fees and taxes come from toll roads.[35]


Advances in technology have allowed tolls and fees to come back to the spotlight as an option to pay for transportation costs. In the past a toll road or bridge required the driver to stop and physically pay the toll to drive on the road or bridge. Our electronic advancements now allow cars to pay with electronic toll collections (ETC).

In particular, electronic toll collection (ETC) tags, which enable drivers to pay without stopping at toll booths, are now widely available. These systems use transponders mounted on vehicles that are identified by readers located in dedicated and/or mixed-use lanes at toll plazas. They have been proven to minimize crashes, reduce harmful emissions, save fuel, and decrease roadway delays.[36]


Tolling can allow for price increases during peak use of roads and bridges. This will help lower congestion by making people think about their traveling. Do I need to make this trip now, or should I wait a couple hours and cross the bridge or road when the price is lower?[37]


The use of tolls and user fees also allows state and local governments the ability to “access private capital, leverage existing public assets, and price transportation facilities to encourage more efficient use of transportation assets.”[38] The major advantage that tolls and fees have over the fuel tax is the ability of the person to choose. If I want to get to my destination in a quick and less congested manner, I will choose to pay; otherwise, if I don’t want to pay I won’t. The mentality of the United States has been to jump in the car and go, without thinking about the wear and tear to the car and road or congestion. The use of tolls and fees forces people to start looking at all costs and make decisions that are best for them while also decreasing the demand on our highways and bridges.




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