July 9, 2024
Bob Poole
Florida is now America’s third-largest state by population, and in 2023 we had the 2nd highest population increase of any state (1.6%), adding 365,000 people to total 22.6 million. Preventing our streets and highways from being overwhelmed is a larger challenge than most Floridians realize.
Recent changes in federal policies are now expected to accelerate the growth of electric vehicles (EVs), with some credible forecasts estimating that EVs will constitute 50% of all personal vehicles on the roads nationwide by 2050. Since EVs use no fuel, this change in vehicles could cut in half the revenue from Florida’s gasoline and diesel taxes. Fuel taxes are the primary source of highway funding.
Fortunately, Florida is somewhat better prepared for this future than many other states. That’s because some of our most important highways are paid for by tolls rather than fuel taxes, including the Turnpike, urban toll roads in our four largest metro areas, and a growing number of optional express toll lanes in those metro areas. According to the U.S. Department of Transportation, Florida has the most lane-miles of toll roads and toll lanes of any state, more than 2nd-place Texas and 3rd-place New York.
Paradoxically, however, in recent years some form of opposition to tolling has emerged nearly every time the Legislature meets. These include several attempts to have the state take over the Miami-Dade Expressway Authority and restrict its ability to build new projects, and several restrictions on express toll lanes which continue to expand in the Miami, Jacksonville, Orlando, and Tampa metro areas.
Most toll road projects are financed via long-term revenue bonds, and the bond rating agencies are concerned about political attacks on toll roads. The more such attacks succeed, the higher the odds of rating agencies considering Florida a more risky place to finance toll projects, therefore raising the interest rates on Florida toll road bonds and making toll projects harder to finance.
With the looming threat of fuel tax revenue entering a long, irreversible decline, Florida needs to start planning for a post-fuel-tax future. In a 2020 report for The James Madison Institute, I explained the consensus of transportation economists that the best long-term replacement for per-gallon gas taxes is to charge all vehicles based on miles driven rather than gallons consumed. Per-mile charges are called mileage-based user fees (MBUFs) in the eastern United States and road user charges (RUCs) in the west.
Over the past decade, more than a dozen state transportation departments have carried out pilot projects with volunteer drivers and simulated MBUFs. More recently, there have been multi-state pilot tests, including three involving commercial trucks operating on interstate routes. Four states (starting with Oregon and then Utah, Virginia, and Hawaii) have begun phasing in actual per-mile charges to replace their state gas taxes. Florida has not yet even done a pilot project.
But the good news is that Florida already has a head start on making this transition, with nearly 3,500 lane-miles of toll road and toll lanes, according to a national report compiled by the U.S. Department of Transportation. These corridors all use SunPass for nonstop electronic toll collection, and SunPass is now interoperable with the 18-state E-ZPass electronic tolling system. In my 2020 JMI report on this subject, I suggested that Florida could begin its transition away from fuel taxes on its existing toll roads and toll lanes.
The first step would be to re-state the existing toll rates on a per-mile basis, so people understand the transition. The second step would be to equip the non-tolled Interstates and expressways with SunPass gantries and charge per-mile tolls on them—instead of state gas taxes. Drivers would get refunds of state gas taxes for miles traveled on SunPass-equipped highways. This would eventually remove from gas taxes highways that handle 27% of all vehicle miles of travel in Florida, making those highways self-supporting from per-mile charges. The remaining gas tax revenues would be reserved for all other Florida roads, while researchers spend a decade or more figuring out the most feasible and privacy-respecting ways to charge for state and local roads where SunPass is not feasible.
This will be a major change; after all, highways have been paid for mostly via gas taxes since Oregon invented the idea in 1919. But it’s a change Florida (and all the other states) will have to make, as electric vehicles go mainstream.
Motorists and some Florida legislators need to get over their opposition to tolls—and their likely successors, per-mile charges. As long as Florida keeps growing, we will need more highway capacity, not less. And that means a robust means of paying for highways—including reconstruction costs as existing lanes and bridges wear out. The gas tax is on its way out; Florida needs to prepare a robust replacement.
Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.
