Background

Most transportation services in this country were originally provided by private companies. Roads, bridges, tunnels and ferry services were paid for by those who used them. In Oregon, early examples included the Barlow Toll Road, built by Sam Barlow in the 1840s for Oregon Trail settlers, and the first Morrison Bridge, built by California investors as a toll bridge.

The entrepreneurial ethic in the American transportation sector was so ingrained that during the 19th century, three different U.S. Presidents vetoed legislation calling for a government-built national highway system, on the grounds that it was clearly unconstitutional. Transportation infrastructure was properly seen as a market-based service that the government should stay out of.

Unfortunately, during the 20th century, many transportation services were taken over by government monopolies. With the rise of the private automobile as the dominant mode of transport, elected officials increasingly took control of construction and maintenance of roadways, most notably through the initiation of the federal Interstate Highway System in 1956. The passage of the Urban Mass Transit Act of 1964 marked the large-scale intrusion of the federal government into the transit industry, sparking the decline of private providers. Not surprisingly, the monopolization of both highways and transit by government agencies has led to a rise in cost and deterioration of service.

The focus of Cascade’s research program in transportation is to explore innovative, market-based mechanisms for providing transport services. Examples include privatized transit such as jitneys and bus service, privately built toll roads using electronic road pricing, congestion pricing of both public and private roads, and privatization of airports.

With the collapse of a highway bridge in Minnesota in August 2007, the public is increasingly becoming aware that the government has been a poor steward of our transportation system. In Oregon, most state legislators agree that when the legislature convenes again in January 2009, transportation finance will need to be a very high priority. In 1919, Oregon was the first state in the nation to adopt a gasoline tax. By 1929, every other state and the federal government also had enacted a gas tax. But that was the road finance mechanism of the 20th century; it will not serve us very well in the decades ahead. As fuel economy continues to improve in vehicles, and as alternative fuels penetrate the market, we increasingly will see motorists either underpaying their fair share of road maintenance costs or not paying at all.

Oregon needs to make a transition to a market-based system where roads, bridges, transit and airport facilities are operated (and possibly owned) by private vendors who charge user fees that vary based on supply and demand conditions. Many countries around the world are doing this, and Oregon needs to find ways to marketize as well.
The papers on this website cover an array of transportation issues, including light rail, transit-oriented development, congestion pricing and transit privatization. Forthcoming essays will outline practical legislative concepts for addressing Oregon’s decaying transportation infrastructure through the use of incentives, markets and private investment.