Ahead of the official weekend start of the summer, NC is focused on tourism. Last week the issue was the impact of gas prices on tourism. This week we're thinking about the impact of toll roads on tourism, specifically a $5 toll on I-95 at the NC-VA border.
If North Carolina legislators and federal officials agreed, the two states would go into the toll business together. They would collect up to $5 from every car at a shared toll plaza at the border, splitting the proceeds to finance long-sought improvements to I-95 in Virginia and North Carolina.
To an economist, tolls on heavily traveled roads are an efficient way to raise government revenue for roads. If the tolls are low enough, say $5 on a long stretch of highway, it doesn't much affect traffic and those who use the roads pay for their upkeep.
To others, any increase in a government revenue source is something to oppose, even if the efficiently collected revenue (e.g., tolls, excise taxes on products that generate negative externalities) replaces inefficiently collected revenue (taxes on labor and capital). Bogus arguments are used:
Critics said tolls anywhere on I-95 would act as a tourist repellent across Eastern North Carolina, especially in depressed border counties. After losing 3,000 textile mill jobs over the past decade, Halifax County is banking on a new hotel and entertainment project at Roanoke Rapids -- Exit 171, 11 miles from the Virginia line -- to be anchored by a 1,500-seat music theater.
Now imagine. If you were thinking about driving from north of NC, say NJ, to go to a concert at the Exit 171 music theater, say Springsteen, would you worry about paying a silly $5 toll?
A better argument is that drivers will avoid tolls by substituting other roads without tolls. The key here is setting the toll just right -- not too high. In this case $5 is surely low enough to keep tourists and truckers off 301and on I-95.
