Some Wisconsin business leaders say introducing highway tolling in the state could harm its economy, even as top lawmakers cite the idea as a possible linchpin to negotiations over the state’s next budget.
The opposition from the state’s business lobby, Wisconsin Manufacturers & Commerce, and other groups illustrate part of the challenge facing lawmakers and Gov. Scott Walker if they want to introduce tolling to pay for road construction and repairs.
Lawmakers and Walker aim to pass the state’s next two-year budget in coming weeks. Their disagreement on how to address a lack of revenue for roads and bridges is the biggest hurdle to the budget’s passage in the face of a July 1 deadline.
Supporters of tolling say it would create a long-term revenue source for Wisconsin’s interstates. Many were built in the 1960s and have outlived their original lifespans, meaning they must be fully rebuilt at a cost of billions of dollars.
But whether or not it’s a financial boon to the state, tolling could bring new challenges, according to critics in the state’s tourism, hospitality and manufacturing sectors. They say tolling could deter tourists and increase costs to transport goods.
Other concerns center on how tolling could affect highway access. Depending on how it were implemented, tolling could upend the business models of roadside restaurants, convenience stores and hotels, critics fear.
The response calls into question whether statehouse Republicans will ultimately back tolling in the face of criticism from some of their most powerful — and deep-pocketed — allies.
It also illustrates the array of hurdles that await if Wisconsin attempts what no other state has done: convert a non-tolled U.S. interstate into one that is fully tolled.
The state’s influential business lobby, WMC, said in a recent statement that it is “greatly concerned about the impact tolling will have on the cost to move manufactured goods and agricultural products.”
Tom Diehl, president of the Association of Wisconsin Tourism Attractions, calls tolling “a bad idea” that will deter tourists from coming to the state. Diehl also questioned the premise that out-of-state motorists would foot much of the bill for tolling.
“You’re going to start ripping off the general public going to and from work every day,” Diehl said.
Not all groups representing transportation-reliant businesses oppose tolling. Some agricultural groups have signaled an openness to it.
Tamas Houlihan, director of the Wisconsin Potato and Vegetable Growers Association, said his group is convinced the state needs more revenue for roads and bridges.
“We have asked our elected officials to consider all options for increasing revenue for transportation,” Houlihan said. “We leave it to the legislators whether any particular option, such as tolls, should be part of the ultimate solution.”
‘It would create more problems’
Highway tolling in Wisconsin likely would require federal approval, which state Assembly Republicans have proposed to seek. Current law only permits states to begin tolling in very limited forms, such as adding toll lanes to existing highways. However, a federal program allows states to toll interstates on a broader scale if they apply and are accepted for it.
If approval were granted to begin tolling, it would take at least four years to implement, according to a state Department of Transportation study released in December.
Senate Majority Leader Scott Fitzgerald, R-Juneau, has said tolls should be considered as part of the next state budget. Speaking of ongoing budget negotiations, Fitzgerald said tolling “could kind of bring this whole thing together at the end if enough members think it’s viable.” Sen. Alberta Darling, R-River Hills, said Senate Republicans have discussed tolling but not all senators are on board.
Both Fitzgerald and Assembly Speaker Robin Vos, through statements from their spokespersons, told the Wisconsin State Journal this week that they’ve heard from groups concerned about tolling but still consider it an option.
Walker has insisted he’s not “pushing” tolls but said he would consider them under certain circumstances.
As Walker and lawmakers have spoken publicly about tolling in recent weeks, the state’s hospitality industry has led the charge against the concept.
“We oppose barriers to travelers from out of state coming to our state to spend their dollars,” said Trisha Pugal, president of the Wisconsin Hotel and Lodging Association.
Ed Lump, CEO of the Wisconsin Restaurant Association, said tolling is not a solution to the state’s transportation funding problems.
“It would create more problems,” Lump said.
Lump fears toll roads could lead to the creation of privatized roadside rest stops or service areas that can include gas stations or restaurants, such as what exist on tollways in other states. Such stops would hurt existing roadside businesses, he said.
If tolling causes highway access to be restricted or exits to be removed, that’s another concern, Lump said. Tollways once were built with limited access points to minimize the number of toll booths required.
But such concerns are minimized in the era of electronic tolling, according to tolling advocate Bob Poole, who has advised the U.S. Department of Transportation and various state DOTs, including Wisconsin’s. He also co-founded the Reason Foundation, a libertarian think tank.
New technology has changed tolling
Tolls now can be collected electronically, with no toll booths — or immediate payment — needed. Vehicle transponders collect information about which vehicles use the highway and when and where. For vehicles without transponders, cameras capture vehicle license plates.
Such infrastructure doesn’t come cheap. The DOT study released in December estimated up-front capital costs for tolling Wisconsin’s interstates would be as much $400 million.
The conditions Walker has publicly laid out to consider tolling are that they must be collected from motorists entering the state and they must be paired with a reduction in the state’s vehicle registration fee or in gas taxes paid by Wisconsin residents.
Tolling only motorists entering Wisconsin is not feasible, according to Poole. He said collecting tolls only along state lines almost certainly would violate the interstate commerce clause of the U.S. Constitution, meaning it would be struck down in court.
Poole also said an across-the-board gas tax cut would be difficult to implement because it would drain funding for non-interstate roads. But a more limited gas tax cut — perhaps in the form of a rebate for Wisconsin motorists who pay tolls — might be feasible, he said.
Bill McCoshen, who lobbies for the state’s Dairy Business Association, said many business groups understand the state needs more money for roads and would support a modest gas tax increase.
“It’s simpler to do it that way,” McCoshen said.
But Walker has said he would veto such an increase, and Fitzgerald has said Senate Republicans won’t override the governor.
McCoshen said his association wouldn’t rule out tolling as an option. But he noted it would not be a fix for the next state budget, since it would take years to bring tolling online and start collecting revenue.
“We’re still kicking the can down the road at least four years,” McCoshen said.