Tackling road congestion

In the United States, Arizona has added nearly one million people since 2000 to reach its current total of just over six million. With a 3.6 per cent growth rate, it is the fastest growing state in the nation. Not surprisingly, over the same six-year period, the number of registered vehicles in the state ballooned, says Noah Clarke, an economist at the Goldwater Institute.

Unfortunately, this influx of vehicles has brought with it long waits and traffic jams:

On average, drivers in Phoenix spend 49 hours a year stuck in traffic.

The Texas Transportation Institute estimates congestion costs Phoenix commuters $1.3 billion a year in lost productivity.

The conventional solution to this problem is increased public funding. Arizona Governor Janet Napolitano even referred to the situation as the "time tax." But this isn't the only – and certainly not the best – option. Texas, Indiana and others are tapping the creative power of the free market to solve their highway woes:

One example of this creativity is in Texas, where a private developer is investing $1.3 billion to complete the "Trans-Texas Corridor."

In return for financing, designing, building, and maintaining the new road, Cintra-Zachry will receive a 50-year contract to collect tolls.

To the benefit of taxpayers, once the road is finished, only those using it will have to pay for it, but the highway will remain state-owned.

Another model can be found in Indiana:

For a lease price of $3.8 billion, the state recently turned over operating responsibilities on a toll road to a private company for 75 years.

In addition to the lease price, the company agreed to spend $400 million for other road repairs; Indiana will use this new money to expand and improve roads all across the state.

Source: Noah Clarke, Tackling the 'time tax,' Goldwater Institute, February 2, 2007.

For text: http://www.goldwaterinstitute.org/aboutus/ArticleView.aspx?id=1392

For more on Privatization Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=37

FMF Policy Bulletin 13 February 2007