Auckland Transport Blog

My post yesterday it reminded me of a question that has rolled around in my head from time to time, should state highways be funded the same way as local roads. There is clearly some logic to the current set up with the NZTA being responsible for state highways which are considered the stragetic roads that connect the country together and councils are responsible for local roads which tends to be how we get around our towns and cities. This is paid for as follows:

• The National Land Transport Fund (NLTF) is where the money goes that comes from fuel taxes, road user charges, vehicle licencing  and the money gained though the leasing or sale of surplus state highway property. This is administered by the NZTA.
• The development and maintenance of State highways is the responsibility of the NZTA and paid for out of the NLTF
• The development of local roads is the responsibility of the local council (or Auckland Transport in Aucklands case).  The NZTA provides funding assistance out of the NLTF to each project differently but the intention is that the national average is 50%.

Now my understanding of the reasoning on that last point is the thinking that local communities who will benefit the most from the improved local roads should pay for some of the costs of building them. It also acts as a way to ensure that local bodies who are calling for roading improvements are actually prepared to put some money where their mouth is and that would help to weed out some of the less viable projects.

The problem though is that in practice we use the roads as a single network and whether its a motorway or a state highway through a rural town, they are often used just as much, and if not more for local connections as they are for nationally strategic traffic. The fact that these roads are paid for in full by the NZTA gives incentives for local authorities to both funnel as much traffic as they off their networks and onto them while also leaving the NZTA more open to lobbying from local authorities to have state highway development happen in their region. This is particularly evident today with the Roads of National Significance where regions that are getting RoNS developed or who think they will benefit directly from them are fighting to keep them on the books, even if they have appallingly bad economics. At the same time other regions are now starting to push for roads or state highways in their areas to become RoNS so they can get them ‘upgraded for free’. The RoNS have in effect seen the funding process politicised to a much larger degree than it was before.

The NZ State Highway Network

So back to the original question, should state highways be funded the same way as local roads. I think there is definitely some merit in the idea as just like local road investment, it would mean state highways have a direct contribution from those that benefit the most from it while like local road projects, would help to ensure that we are getting the best projects built. Local authorities would be able to weigh up if they are better off to spend say $1b on a motorway project or instead put that money into something else like improved local roads or even public transport which may provide a better overall outcome. As an example, how keen would Waikato or Wellington be to pay for half of the RoNS they are getting. Would them paying a proportion change how the projects are perceived by residents? Would Northland be so keen on calling for Puhoi to Wellsford to be built or would they instead push for something a bit more like operation lifesaver and use some of the other money to do similar upgrades to other parts of the route?

Of course I can hear some people already wondering how much rates would have to increase for local authorities to cover their contributions but the reality is they wouldn’t have to. One option could be funding assistance ration to increase so that the rates dollars could be used on a wider variety of projects e.g. instead of being 50% it could increase to 75% (or whatever works out as a netural figure). Another option could be for all local authorities to get a share of half the amount being spent on state highways as a bulk funding amount which they can put towards any project they choose but leave the NZTA contribution at 50%.

Interestingly the approach of having local authorities pay for a share of state highways is actually how things used to be done from the 1920′s until the 1950′s when funding was centralised to a much greater level and the country went on a road building spree. I’m sure such an idea would have some negatives over the current situation but it is one I think we should perhaps consider as it would give locals a much bigger say in infrastructure that affects them. It would of course represent such a huge giving up on centralised power by any government so unfortunately I just can’t see it happening.