Ask Not for Whom the H-1 Tolls…

by Tom Yamachika, President, Tax Foundation Hawaii

Recently, we have heard the term “congestion pricing” bandied about as a way of improving traffic congestion here, and of raising more money.

What is it? Congestion pricing is a way of charging motorists for driving in designated areas during designated times. For example, in London, drivers pay a daily fee of about $16 to drive to the heart of the city on weekdays between 7 a.m. and 6 p.m. According to the British online magazine CityMetric, the number of private cars entering the protected zone dropped by 39%.

“It absolutely works,” Mayor Caldwell is quoted as saying. But: “It’s fraught with political problems.”

Even if the political problems could be overcome, how would it work?

Would the City – or State – set up toll booths on the H-1, for example? It’s possible, with current technology, to set up devices at onramps to check in cars, either through license plate number recognition software or through transponders. The owners of those cars then receive a bill every so often.

There are some wrinkles, however. The first is that the H-1 is part of the federal Interstate Highway System (although the word “Interstate” means “between states” and our freeways obviously aren’t). Which means federal law dictates whether states or cities can charge a toll for accessing the freeway. The 1956 National Interstate and Defense Highways Act generally prohibits state and local governments from charging tolls on interstate highways. However, there have been some exceptions to this rule, and President Trump has proposed scrapping the restriction altogether.

The second wrinkle is that the City and County of Honolulu, which wants to impose the tolls, doesn’t have independent taxing power. It would need to get that power from our state legislature, and there is some question as to whether that could realistically happen. The counties do have, under existing state law, the power to charge a toll on county highways, provided that all toll revenues received are used to construct or maintain county highways (HRS sec. 46-1.5(19)(D)). Given that law, it is doubtful that the counties have the power to charge tolls to use roads owned by the state or federal government, or any roads other than county highways for that matter. So, the legality of congestion pricing might be questionable unless state law is changed to permit it.

Finally, there are the political problems the Mayor referred to. In 2008, for example, then-Mayor Mufi Hannemann said that congestion pricing couldn’t be done without providing “enough options or opportunities for people to travel in and out of the city.” The American Trucking Association came out strongly against President Trump’s move to allow states to toll the interstate highways, saying that tolls are ineffective and wasteful and spend too much on overhead costs. Then there is the issue of how fair a toll would be on an ordinary taxpayer who is struggling to make ends meet and needs to get to work somehow. And finally, we always worry about new taxes and fees because sometimes they take on a life of their own and balloon out of proportion to the need that spawned them.

The debate will continue!