The United States federal government should close the United States Department of Transportation

A2 Tolls Bad (Congestion)

Tolling has little negative effect on traffic and congestion pricing would solve

7. Will toll roads divert traffic to other facilities that are less able to deal with it? According to Fitch Ratings, based on its experience with a variety of toll roads around the world, it is their “best judgment that in most developed countries with high motorization rates, regularly scheduled toll increases that are pegged at or close to inflationary levels will likely have minimal adverse traffic effect.” For toll roads with toll rates that have historically not kept pace with inflation, rates can be raised steeply to catch up to inflation without materially affecting demand. 142 Fitch’s experience confirms that toll rate increases that are pegged to inflation or some other reasonable indicator, and which are reasonably well phased in to avoid sharp increases, should not cause adverse traffic effects. Nevertheless, it is important to recognize that each facility presents unique circumstances and the problem of traffic diversion needs to be evaluated. To the extent traffic diversion is expected to pose a serious problem, then alternative PPP structures, such as shadow tolls or availability payments, could be considered. The risk of diversion also highlights the benefits of congestion pricing. Appropriately structured congestion pricing may encourage drivers to drive at off­peak hours, when the toll rates are less expensive, rather than to drive on other roads. In urban areas, congestion pricing also provides a congestion­free alternative which actually encourages drivers using alternative routes to use the priced facility instead in order to get the benefits of faster and more predictable travel times. Various studies conducted by FHWA and others have shown that vehicle throughput on freeways drops by 10 percent to 25 percent when traffic flow breaks down, in addition to causing delays to motorists that do get through. This lost throughput can be regained when traffic flow on freeways is managed with pricing so that flow breakdown is prevented. Thus, managing demand on freeways with pricing during peak periods can actually increase freeway vehicle throughput and thereby increase the total volume of traffic that can be served in a priced freeway corridor, with the freeway attracting some traffic from other facilities in the corridor. Additionally, congestion pricing can divert traffic to transit, which provides a net benefit in congestion reduction.

A2 Tolls Bad (Cost)

Concession agreements set a reasonable limit on toll rates for private sector

DOT 8-(“AN UPDATE ON THE BURGEONING PRIVATE SECTOR ROLE IN U.S. HIGHWAY AND TRANSIT INFRASTRUCTURE” UNITED STATES DEPARTMENT OF TRANSPORTATION July 18, http://www.fhwa.dot.gov/reports/pppwave/ppp_innovation_wave.pdf)//EL
Concession agreements for toll facilities typically provide that the private operator may not raise toll rates above certain amounts. Toll rate limits can be based on changes in inflation­ related indexes, changes in gross domestic product per capita, a fixed percentage rate or any other factor that the public authority deems relevant or useful. (In the context of congestion pricing, maximum toll rates are not efficient; instead, toll rate limits need to provide operators with flexibility to vary tolls based on demand in order to reduce congestion. 136 ) Concession agreements typically provide that failure by the private operator to comply with toll rate provisions ultimately leads to control of the facility and the right to collect tolls reverting to the public authority. In addition, if the operator raises toll levels too high, the public may avoid using the facility, forcing the operator to make the facility more affordable. The private operator’s revenue is directly dependent on the affordability of the facility. Setting proper toll rates is especially important if a toll facility is located in a potentially constrained market, or if the public authority is giving the private operator protection from competition. In these situations there may be a risk of monopoly pricing; the operator could conceivably charge prices well in excess of the marginal social cost for use of the facility because users have limited alternatives. To the extent monopoly pricing is a risk, the public authority needs to be vigilant to make sure that the toll rates it negotiates with the private operator reflect the risk and underlying economic reality of the project, recognizing that every facility has unique characteristics. The public authority should also be aware that to the extent it expects to receive revenue from the concession the toll rate structure needs to reflect this revenue. While monopoly pricing is a risk in constrained markets, the risk can be managed through negotiated toll rates. Another option is to use a shadow toll or availability payment structure, which can provide some of the benefits of PPPs without creating a tolling structure. With shadow tolls and availability payments, the concessionaire has incentive to construct and operate the facility so that it will perform optimally because the concessionaire’s revenue is directly related to facility performance, but the risk of monopolistic pricing is eliminated because the concessionaire’s revenue is not collected from the users of the facility.

A2 Tolls Bad (Delays)

Won’t happen -- the market will fix any delays.

Block, 9 – PhD in economics from Columbia, Harold E. Wirth Endowed Chair in Economics at Loyola University (Walter, “Privatization of Roads and Highways”, Ludvig von Mises Institute, 2009, http://library.mises.org/books/Walter%20Block/The%20Privatization%20of%20Roads%20and%20Highways.pdf, p. 15)//RI

Another common objection to private roads is the spectre of having to halt every few feet and toss a coin into a toll box. This simply would not occur on the market. To see why not, imagine a commercial golf course operating on a similar procedure: forc- ing the golfers to wait in line at every hole, or demanding pay- ment every time they took a swipe at the ball. It is easy to see what would happen to the cretinous management of such an enterprise: it would very rapidly lose customers and go broke. If roads were privately owned, the same process would occur. Any road with say, five hundred toll booths per mile, would be avoided like the plague by customers, who would happily patronize a road with fewer obstructions, even at a higher money cost per mile. This would be a classical case of economies of scale, where it would pay entrepreneurs to buy the toll collection rights from the millions of holders, in order to rationalize the system into one in which fewer toll gates blocked the roads. Streets that could be so organized would prosper as thoroughfares; others would not. So even if the system somehow began in this patch- work manner, market forces would come to bear, mitigating the extreme inefficiency.

A2 Tolls Bad (Public Backlash)

Polls prove -- public prefers tolls to federal solutions.

Rouhani, 9 – PhD candidate Civil and Environmental Engineering Department @ UC Davis (Omid, “SUSTAINABLE TRANSPORTATION AN INTERNATIONAL PERSPECTIVE”, Projections, Volume 9, MIT Journal of Planning, http://web.mit.edu/dusp/dusp_extension_unsec/projections/issue_9/issue_9_rouhani.pdf) //RI

However, publicly owned roads are strongly accepted goods. The hardest part of implementing this policy is the essential change in people’s view about the ownership. People might resist this change (Philadelphia Business Journal, 2007) not only because they prefer their stable conditions and are afraid of changes, but also because they are afraid of being worse off with the introduction of new charges. The equity issues around toll pricing can exacerbate the situation. Nevertheless, opinion surveys showed that people favor tolled express lanes against a gas tax increase (Samuel, 2005). People’s satisfaction is the key for the success of the policy. This can be addressed by a Christmas Tree legislation; all should benefit from the policy (Christmas Tree Bill); CBCP in section 11.

More ev -- the public likes that it’s a more effective cost recovery mechanism.

SCRIBNER 10-Policy analyst, Competitive Enterprise Institute (MARC,

“The Private Provision of Surface Transportation Infrastructure in the United States”, CEI, April 20, http://www.openmarket.org/2010/04/20/the-private-provision-of-surface-transportation-infrastructure-in-the-united-states/)//EL

Private sector involvement in surface transportation infrastructure is not new. Public and private turnpikes—roads that require the payment of a toll for passage—have existed for hundreds, if not thousands, of years. In the United States, turnpikes enjoyed limited success in the 18th century into the 19th century, before being virtually eliminated at the beginning of the 20th century. Renewed interest in tolls occurred just prior to the Second World War and continued until the passage of the National Interstate and Defense Highways Act in 1956. Only in the last couple decades have toll roads again become politically palatable, with many taxpayers now preferring tolls to increases in fuel taxes as means to fund road construction and upkeep. This is important not only in terms of getting road financing right, but also because tolls are the most efficient cost recovery mechanism for private firms. Private roads serving residential areas have also enjoyed limited historical and contemporary success in the U.S. These are typically financed and managed by local property developers and owners’ associations, many of which allow public traffic. The advantage of these private roads is that investment and use decisions are made in close consult with the affected stakeholders (i.e., adjacent property owners). Roads controlled by private developers and owners’ associations can accommodate owners’ preferences which may be at odds with one-size-fits-all government regulation, such as preferences for narrower roads and smaller building setbacks. During the 19th century, private streets were famously constructed in St. Louis. The so-called “private-place model” was successful for several decades, until new city ordinances granted the city the exclusive right to install and maintain “sewers, sewer inlets, water mains, gas mains, underground conduits for electric wires, fire plugs, lamp posts and other conveniences.” Essentially, owners of private streets lost the ability to control their properties, and many gave up and lobbied the city to take over ownership and management. But with the recent rise ofcommon interest housing developments (often referred to as “gated communities” or “private communities”), private streets have been making a slow comeback as an important component of the overall transportation system. Private involvement in surface transportation was not limited to roads. Prior to the middle of the 20th century, passenger rail infrastructure in the United States—including track used for intercity service, commuter service, and urban mass transit—had been privately built, owned, and operated. New York City’s subway and commuter rail systems, Chicago’s El, and the nation’s cross-country intercity rail network were all owned and managed by private firms. The poor state of private mass rail transit following World War II was in part a consequence of the massive economic distortions and dislocations caused by the federal government’s annexation of industry to support its war economy. However, rail transit had been losing its market share for years following the first auto-driven suburban expansion after World War I. The street car industry, for example, was in a financial death spiral long before the outbreak of World War II. Unfortunately, these inefficient and unpopular (at least in terms of ridership) transit networks were put on government-funded life support for decades—or worse, continue to limp along to this day. Around the world and in the United States, private sector involvement in transit infrastructure has increased dramatically in recent years. While not all public-private partnerships are created equal—and those which promote private ownership of infrastructure in the long-run should certainly be preferred over those which merely lease public infrastructure to private managers—they should be seen as a step in the right direction.
It’s more popular than tax increase alternatives.

DOT 8-(“AN UPDATE ON THE BURGEONING PRIVATE SECTOR ROLE IN U.S. HIGHWAY AND TRANSIT INFRASTRUCTURE” UNITED STATES DEPARTMENT OF TRANSPORTATION July 18, http://www.fhwa.dot.gov/reports/pppwave/ppp_innovation_wave.pdf)//EL

PPPs address concerns that fuel taxes are not a viable revenue source by substituting private capital and direct user fees for fuel tax revenue. Over the next few years, infusions of private capital can supplement efforts to shore up the uncertain balances of the Federal Highway Trust Fund so that transportation projects can be funded. Perhaps more importantly, private capital and direct user fees are not subject to the same political and market forces that are expected to deteriorate the value of fuel taxes over the next several years. Political and public sentiment increasingly supports the use of tolls and other direct user fees rather than fuel taxes. A May 2007 report from the Reason Foundation reported that polls conducted around the United States clearly demonstrate that a majority find it preferable and more fair to fund transportation with tolls rather than with increases in fuel taxes. 128 For example, a recent survey conducted by the American Automobile Association found that more than half of the respondents favor tolls while only 21 percent favor fuel taxes. As questions about the short­ and long­term viability of fuel taxes intensify, private capital and direct user fees are proving to be advantageous alternatives.

A2 Perm

Perm fails -- government involvement hurts improvements, grinds projects to a halt.

Block et al, 9 – PhD in economics from Columbia, Harold E. Wirth Endowed Chair in Economics at Loyola University (Walter, “Privatization of Roads and Highways”, Ludvig von Mises Institute, 2009, http://library.mises.org/books/Walter%20Block/The%20Privatization%20of%20Roads%20and%20Highways.pdf)//RI **Gordon Tullock–Retired Professor of Law and Economics at the George Mason University School of Law, PhD in Economics @ U Chicago, one of the founding figures in public choice theory

QUESTION: Will there be a role for government in “urging” private property owners to sell their land to road construction companies? Building a large highway, for example, can be a daunting task. If property owners hold out and refuse to sell their property to a road company, the whole project could grind to a halt. Can government step in and encourage the sale—much the same as with the railroads of the 1800s using the government right of eminent domain? WALTER BLOCK: Eminent domain is totally and completely inconsistent with free enterprise and libertarianism. It amounts to no more and no less than land theft. The whole point of my (and my son’s) debate with Gordon Tullock was on this issue. He said that private road ownership would be impossible without eminent domain laws (expropriation as it is called in Canada), and I (we) denied this. In a nutshell, our argument was that it is possible to burrow under holdouts’ property or bridge over it, without violating their property rights.2

Permutation fails -- the DOT kills any chance of full privatization.

Block et al, 9 – PhD in economics from Columbia, Harold E. Wirth Endowed Chair in Economics at Loyola University (Walter, “Privatization of Roads and Highways”, Ludvig von Mises Institute, 2009, http://library.mises.org/books/Walter%20Block/The%20Privatization%20of%20Roads%20and%20Highways.pdf)//RI

QUESTION: In the United States, what bureaucratic encum- brances and agencies would stand in one’s way if they were to actually start a company that intended to purchase, own and con- trol all roads and streets in an entire state? WALTER BLOCK: Zoning authorities; bureaucrats in charge of land use; the Environmental Protection Agency; the Department of Transportation; the National Highway Traffic Safety Adminis- tration.

Politics NB

The CPs popular -- provides political cover and prevents politicians from having to make tough decisions.

Baxandall 09- Ph.D. senior Policy Analyst for Tax and Budget issues for U.S. PIRG( Phineas, “Private Roads, Public Costs The Facts About Toll Road Privatization and How to Protect the Public” U.S. PIRG Education Fund, Spring 2009 http://www.inthepublicinterest.org/sites/default/files/Private-Roads-Public-Costs-2009.pdf)//EL

Privatization of roads offers elected officials political benefits beyond the ability to avoid potentially unpopular tax increases to pay for transportation. In the short term, privatization promises a huge budget windfall, especially for privatization of existing roads, which creates budget slack and an ability to dedicate resources to other favored projects. New private roads offer special opportunities for credit-taking and ribbon cutting ceremonies. In either case, the long-term financial downside, particularly the loss of toll funds and rising toll rates paid by drivers, often is overshadowed by the short-term windfall. 25 For instance, the Indiana Toll Road deal used a 75-year lease to finance a 10-year transportation plan. Whatever structural budget shortfalls Indiana faced before the deal will return in the 11 th year , but the state will need to face these shortfalls without revenue from its toll road. Privatization may also be attractive to elected officials because it gives them political cover for toll hikes they fear will be unpopular. Potential investors claim that by outsourcing toll collection to a private company, drivers’ anger will not be directed at the politicians who authorized the toll hikes. Moody’s bond rating agency, after conceding that governments can generate these same upfront payments by borrowing against future toll collections without privatization, offers the counterpoint that, “If they pursue the option [without privatizing], governmental authorities must take responsibility for their own toll raising decisions, rather than distancing themselves from these decisions through a long-term concession to a private entity.” 26 Fitch bond rating service, similarly, lists as a merit of toll road privatization, the The Rise in Toll Road Privatization 13 ability to “distance government from toll increases.” The report explains that, “the political risk related to toll rate increases could be minimized by transferring the authority within an overall rate-setting framework to the private sector.” 27

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