A Lesson on Public Policy and Economics in Tolls

justin-katz-avatar-smiling

It occurs to me that some people might respond to my example of the $40 round trip for me to drive from my house to Woonsocket under the RhodeWorks toll scheme with two points:

  1. You don’t drive a large commercial truck.
  2. Almost no large commercial trucks are likely ever to have a reason to drive from Tiverton to Woonsocket and back.

Let’s put aside the correction that my calculation would apply for anybody in any town to the east of the Seekonk River who wouldn’t go over the Newport Bridge.  A more important principle depends on not getting bogged down in specifics because it has to do with opportunity costs.

So, yes, it’s difficult to think of a reason a large truck would have to do a lot of traversing of Rhode Island from Tiverton, although there are such industries as stone and soil delivery, lumber delivery, boat building, and seafood.  By implementing a toll, the state government makes it that much less likely that any business needing to make such a trip would set up shop in Tiverton, even if this were otherwise an attractive location.  That’s almost $15,000 per year if one truck makes the trip each day, and with the constant threat that the state will just ratchet up the toll.  After all, the gas tax now adjusts for inflation, and the governor’s budget calls for school funding from local taxes to adjust for inflation, as well.  How likely is it that the $15,000 won’t adjust, as well?

Perhaps businesses that are already in operation won’t find it worth their while to up and leave the state or just change their behavior over tolls (although we’ll see), but most of planning for the future involves creating space for new activities and new innovations.  When it comes to making new decisions, whether for an existing business or a new one, that map of tolls will certainly come into play.  Back when the Sakonnet River Bridge was in the crosshairs for tolls, local state representative John “Jay” Edwards (D, Portsmouth, Tiverton) repeatedly declared that “a toll is a barrier.”  Apparently, he and his peers are not so convinced that 14 tolls are a barrier.

The references to other states are significant, here.  In general, tolls are applied to one road on a long stretch.  Governor Raimondo’s web of tolls designed to capture all movement around Providence are a peculiarly Rhode Islandish and ugly image.

Now take the idea of that toll and add it to every other thing that Rhode Island does to make itself less friendly for businesses and innovative economic activity.  Governor Gina Raimondo has led the way declaring that the state needs to spend taxpayer money on innovation, but what she means is that we must tax everybody and give government a slush fund so it can help chosen companies overcome our unnatural barriers.

If we really want Rhode Island to find sure economic footing for the future, what we have to do is stop creating barriers for those investments and innovations that we can’t predict.



  • Rhett Hardwick

    1.You don’t drive a large commercial truck.

    2.Almost no large commercial trucks are likely ever to have a reason to drive from Tiverton to Woonsocket and back.

    First they came for the Socialists, and I did not speak out—
    Because I was not a Socialist. – Martin Niemöller

    • Raymond Carter

      It’s hard to pity the average RI’er. He has been raped repeatedly over the last 80 plus years of one party rule by the cronies and the union whores and every November of every even numbered year he keeps voting for the rapist.
      Do we not deserve in this state EVERYTHING we get? Not a rhetorical question.
      Tommy Cranston

      • Rhett Hardwick

        Could it be the “Stockholm Syndrome”?

  • GaryM

    It has the appearance that our RI leadership is banking on a future where our strategy to balance the RI budget is based entirely on federal transfer payments for highway, welfare, affordable housing, etc. based on what we ourselves raise for such matching federal funds.

    So what happens if a fiscal conservative gets elected President, and starts to cut into deficit spending? How long can RI last?

    • OceanStateCurrent

      I’ve made a related point in the context of Lawrence, MA, and RI’s expanding “company state” model, but the president doesn’t have to be especially conservative. Basically, Rhode Island is setting up government and social service industries (e.g., healthcare) as a core industry with incentive to attract clients for its services, collecting the money from healthier parts of the economy locally and, increasingly, elsewhere in the country.
      At some point (perhaps soon, with another financial crisis looming), the healthy parts of the local economy will move elsewhere, and the healthy areas of the country will determine that they no longer have the slack to subsidize the “company states.” An economy built on using a relative unproductive population as a pretense for taking other people’s money is doomed to fail.

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