Donald Marron on Congestion Pricing as an Instrument for Reducing Highway Spending

by Reihan Salam

Donald Marron makes the case for congestion pricing on U.S. highways:

The federal government spent about $43 billion on highway investment in 2010. To maintain the same quality of highway performance would require an average of $57 billion in annual federal spending in coming years, according to the FHWA. That price tag drops to only $38 billion, however, if we make good use of congestion pricing. Congestion pricing would thus save federal taxpayers almost $20 billion per year; state and local governments would save even more, since they pay for more than half the costs of these projects.

Congestion pricing can make our roadways work better, save Americans precious time, and reduce federal, state, and local budget pressures. That a great combination in this time of growing infrastructure needs and tightening budgets.

Keep in mind that congestion pricing in this context is a turn to a freemium model: cheapskates can drive during off-peak hours. Telecommuting will reduce demand, as will a turn towards denser living, further reducing costs. Right now, however, our basic infrastructure suffers from prolonged underinvestment, and that will take time to correct.