JEFFERSONVILLE — It wasn't too long ago driving a tolled road meant stalling in traffic and digging for loose change.
"I can't help remember when we leased the Indiana Toll Road, they still had the old toll collectors, sometimes collecting as little as — I'm not making this up — as 15 cents. Who's got a nickel, right?" said former Indiana Gov. Mitch Daniels during a stop in Southern Indiana in January.
"Now, it's modern," said Daniels, now the president of Purdue University.
Technology has since answered the call for convenience and efficiency, with all-electronic collection systems that read a magnetic device or photograph a license plate.
And just as automated toll collection has become more prevalent, so has conversation among state lawmakers to rely on tolls as a way to fund roads.
Indiana is one of them. House Bill 1002, known for its proposed gas tax hike, would also direct the Indiana Finance Authority to study the feasibility of tolling interstates.
"I think it's generally accepted across the policy space, across the academic space, that the fuel tax is a dying tax — primarily because vehicles are becoming increasingly fuel efficient," said Denvil Duncan, associate professor for Indiana University's School of Public and Environmental Affairs.
WHAT'S IN A TOLL?
A 2015 study by Massachusetts-based research firm Cambridge Systematics estimated the state could receive up to $1 billion every year, if it implemented tolls on all lanes of Interstate 65 and Interstate 70 and on a new Interstate 69 bridge.
The study identified optimal tolling rates — what would maximize revenue but limit the percent of drivers who would take alternate routes.
Those rates were estimated on average at about 20 cents per mile for a fully tolIed I-65, 16 cents per mile on a fully tolled I-70, and $1.45 per trip on a new I-69 bridge.
The tolls would be used to fund the construction of a minimum of three lanes in each direction on I-65 and I-70, as well as the construction of the new bridge.
Lawmakers argue tolling these interstates as a method for their own improvement would free up money generated through gasoline taxes, paving the way for work on other roads.
House Bill 1002 also authorizes the governor to implement tolls on interstates with new construction, without the Legislature's further approval. In most cases, the governor would still need federal approval.
At present, Indiana only has two tolled areas — the Interstate 90 Indiana Toll Road that runs across the northern part of the state, and three bridges over the Ohio River in Clark County in Southern Indiana. All use electronic tolling compatible with EZ-Pass.
Indiana Department of Transportation spokesman Will Wingfield wouldn't speculate on how full interstate tolls would work, if implemented.
"Much of the Indiana Toll Road requires drivers to take a ticket upon entering and pay the amount listed on the ticket when exiting," Wingfield stated in an email. "Closer to Chicago, there are toll booths every few miles between exits, requiring drivers to pay a fixed amount."
Some of Duncan's research gauged the public's approval of different kinds of road funding revenue sources. Tolling came out on top, with around a third of respondents favoring it over the given methods. The gasoline tax came in second, with about 22 percent of the vote.
An Indiana-specific survey with the same choices, plus the state government transferring money from its general fund, yielded much different results. About 80 percent of the more than 1,000 respondents favored a general fund transfer over tolls or increases in gas taxes.
"People like to consume goods and services, as long as someone else is paying for it," Duncan said. "So it's obvious that I'm driving on this toll road, I have to pay. But if the state decides to transfer money from the general fund, it's not so obvious that I am paying."
FILLING IN THE HOLE
Some Indiana lawmakers hope an increase in the gas tax rates will remedy cost erosion, which has occurred, in part, because the gas tax hasn't been raised since 2003. Each year, rates would increase along with inflation, no more than a penny per gallon.
But legislators also know this is just a short-term fix.
"Something has to be done, right?" Duncan said. "In the short term, you can increase the gasoline tax rate, and this might work for another few more decades, depending on how rapidly we see those shifts toward electric vehicles or alternative-fuel vehicles.
"And if that shift picks up in a significant way, there's no gasoline tax rate that is going to generate the revenue required for roadways."
Now may be a "politically palatable" time to raise gas taxes, Duncan noted, as fuel costs are relatively low.
Tolls are also a good tool for specialized projects, he said. They set up a fund to pay back bonds that can be borrowed to fund construction up front.
That was the case with the Ohio River Bridges Project, a $2.3-billion joint venture between Indiana and Kentucky. Tolls on two new bridges and one rehabilitated span were implemented just over a month ago, on Dec. 30.
Mindy Peterson, spokeswoman for the project, has said traffic volumes for the bridges in January were promising. More than 200,000 electronic tolling accounts have been opened, representing about 60 percent of all vehicles that travel the tolled bridges.
Some in Southern Indiana and Louisville lament the tolls, wondering why they must pay to cross a bridge they've crossed for free their whole lives.
Peterson's answer is simple — the project wouldn't have happened without the tolls.
"Increasingly, many more states are looking toward tolls as a funding option just because projects very much need attention and need to happen, but the money is just not there," she said.
The shift to tolls signifies a closer connection between dollars collected for goods and services on which those dollars are spent.
"The gasoline tax, in a very general sense, is a user fee, in the sense that the amount of money you pay as a driver is directly proportionate to the amount of gasoline you consume, which is directly proportional to the amount of driving you do," Duncan said. " ... If we were comparing the gasoline tax to the toll, the toll is even more directly related to use because only the people driving on that piece of the highway would be paying that toll."
WOULD IT BE ENOUGH?
When banking on tolls for road funding, it's crucial to make accurate estimates on anticipated collections.
In making revenue projections, researchers estimate diversion rates, or the amount of people who would choose an alternative route because they don't want to pay a toll.
"It's all going to be a function of what the toll rate is as well as how responsive people are to that fee," Duncan said.
Preliminary tolling information from the Cambridge study estimated 19 percent of drivers on a tolled I-65 and I-69 bridge would choose another route. That percentage dips only slightly to 17 percent for I-70.
"You don't want to cut things too tight with those estimates," Peterson said. She expects more than enough revenue will be generated from the Ohio River bridges tolling to pay back debt.
That's not the case.
A report on tolling U.S. highways, prepared by transportation policy specialist Robert Kirk for Congress, noted not every public toll has been successful.
In Maryland, express toll lanes on Interstate 95 North collected "far from enough" to pay back financial obligations. The state government has had to make up the difference since then.
The Indiana Toll Road, after it became privatized about a decade ago, filed for bankruptcy because of low traffic volumes. The private entity has since left its bankruptcy status.
"Whether it is built or operated by a government agency or by private investors, a toll road must have sufficient traffic willing to pay a high enough toll to cover construction, maintenance, and toll collection costs if it is to be financially successful," Kirk wrote.
The feasibility of instituting tolls on Indiana interstates, as well as revenue projections, would be studied in depth before any action were to be taken.
House Bill 1002 awaits approval by the Ways and Means Committee, before it advances to the full House.