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paid for the vast majority of the highways, roads, and

streets in the United States.  But there are serious flaws

with funding roads with user fees.

Differential Costs

User fees make sense only so long as all roads cost

about the same to build and provide about the same level of

service.  The system breaks down when some roads cost far

more to build than others as well as when travel demand is

significantly greater during some hours of the day than

others.

An urban freeway may cost from 10 to 100 times as much

per mile to build as a street yet offer drivers only two to

four times the speed.  But drivers who are asked to pay the

same access fee whether they use the freeway or the street

would be foolish to choose the street.  The significant

speed benefit of freeways, at no extra cost to drivers,

explains why urban freeways seem to be used to capacity soon

after they open.

In the 1950s the federal government started building

the interstate highway system, paid for with gasoline taxes.

Although intended to be an interstate system, it quickly

turned into an intraurban system, providing cities with

throughways and beltways that were used mainly by local

commuters.  Urban interstates allowed drivers to go two to

four times faster than they could on streets--but cost the

government 10 or more times more to construct.

To account for the significant differences in costs and

benefits between freeways and streets, cities might have

charged tolls for use of the freeways.  Even better would

have been to reduce peak-hour demand through congestion

tolls that were higher during rush-hour periods than slack

periods.  But federal law forbade states and cities to

charge tolls for roads built with federal funds unless the

roads that were rebuilt with federal funds or replaced by

federally funded roads had been toll roads.  Thus, only a

few eastern states have toll roads, and until recently none

used rush-hour pricing.

Creating Suburbs

Freeways and the automobile transformed American cities

by allowing people to live a considerable distance from

where they worked and shopped.  The auto's door-to-door