Contention Pricing

Peter Gordon debates Tim Rutten in the Los Angeles Times on the federal-funded pilot project to introduce congestion (variable HOT) pricing to local freeways in L.A.

Rutten notes it’s not true congestion pricing:

Oddly enough, no solo drivers will be admitted when average speeds in the new high-occupancy toll lanes fall below 45 miles per hour. That’s to keep them from getting clogged, but the result is that there will be congestion pricing — except when the highways are most congested.

Gordon notes that, responding to the inequity claim, that Angelenos, in essence, already pay a congestion charge. It’s called time (which equals money).

First, if price does not ration road space, something else will. This means that heavy traffic on roads and highways that aren’t priced is a given. It is the default rationing mechanism. Anything made available without charge is quickly crowded. None of this is a matter of ideology, as Rutten seems to think.

The Times itself largely agrees with Gordon.

Most highway improvements are paid for with state and federal taxes on gasoline. This is an extremely regressive tax, not only because rich and poor alike pay the same amount, but because poor people typically can’t afford modern gas-sipping vehicles — there are a lot more Priuses in Santa Monica than in South L.A. Congestion pricing, though, imposes a user fee; only the people who use toll lanes pay the cost, and the people who use them tend to have higher incomes. It’s hard to imagine a fairer system.

In truth, low-income commuters stand to benefit a great deal from L.A.’s experiment. Only 25% of the project’s budget will be spent on developing the new toll lanes; the bulk of the money will pay for public-transit improvements, including the purchase of 57 new express buses traveling the affected routes. And by law, the money from the tolls must be spent on transit or carpool improvements in the same corridor where the funds were generated.

This entry was posted on Tuesday, June 16th, 2009 at 7:49 am and is filed under Cars, Cities, Commuting, Congestion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “Contention Pricing”

  1. Rob Says:

    “Most highway improvements are paid for with state and federal taxes on gasoline. This is an extremely regressive tax, not only because rich and poor alike pay the same amount,”

    They are trying to make it sound like this will somehow help the poorer people.

    When what is likely going to happen in the near future is HIGHER fuel taxes, in addition to these tolls.

    I see a large influx of taxes coming to the citizens of the United States. Gas taxes will be only one of them.

  2. Jack Says:

    Deciding how to allocate expenses for public resources such as transportation necessities is rapidly developing into a third rail. I suspect that much of the debate is created to protect the status quo. Higher taxes, more tolls are needed, should be expected – – delaying is a serious mistake. After implementing and congestion continues to worsen, then price such into the equation. We are now stuck with overbuilt freeways without sufficient funds to properly maintain the growing subsidized dependence.

    We need to get people to reduce their auto dependencies and incentivize them to demand for pedestrian-cycling friendly communities.

  3. aaron Says:

    There’s an excellent interview with the HOT concept origination in The Road More Traveled (a must read for anyone with the slightest concern for our economy or transit).

    Q & A with Bob Poole, Innovator of the HOT Lanes Concept

    Bob Poole is an MIT-trained engineer who began turning his attention to policy making more than thirty years ago. As former president of the Reason Foundation in Los Angeles, and currently its director of transportation studies, Bob introduced the HOT lanes concept in a 1988 policy paper that led directly to legislation in California that enabled the nation’s first HOT lanes projects. More than twenty states have since followed California’s lead. Mr. Poole was interviewed
    by Sam Staley and Ted Baker on March 7,2006.

    Where Did the Idea of HOT Lanes Come From?

    I had the original idea for the private sector to add priced, congestion-relief lanes to freeways back in 1987, after suffering in LA freeway congestion. My policy study caught the attention of both caltrans and Governor Wilson’s office, and we helped them develop the idea for AB 680, the legislation that authorized four pilot projects for private toll projects. The 91 Express Lanes proposal scored highest of the eight submitted and was the first one to be built.

    Where Did the Term “HOT Lane” Come From?

    Several years later, people at the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA) started talking about the idea of selling the unused capacity on high-occupancy vehicle (HOV) lanes to solo drivers willing to pay to bypass congestion. They called the idea “HOV buy-in.” In June 1992, Fred Williams of FTA took me aside during, a conference to concede that this was a terrible term to use for the concept. He suggested high occupancy toll lane (HOT lane) as a sexier term. As a federal bureaucrat, he wasn’t in a position to promote such a name change, but he offered it to the Reason Foundation to promote it.

    The term first appeared in November 1993 as the title in a Reason Foundation study written by Gordon (Pete) Fielding and Dan Klein at the University of California-Irvine. About a year later, FHWA accepted the term in its Congestion Pricing Pilot Program (later to become the Value Pricing Pilot Program).

    What Was the Biggest Obstacle to Implementing HOT Lanes?

    The first obstacle was egalitarian-the idea that it is somehow wrong for people to be able to choose better service for a price. This is sometimes referred to as the “equity” issue, as if the present highway system funded by somewhat regressive fuel (and sometimes sales) taxes were some kind of model of equity. I’ve been encouraged by empirical data from both Orange County and San Diego HOT lanes showing that people in all income groups are glad to have the option available. Modeling work by groups such as Resources for the Future also finds that a network of HOT lanes is a positive change for just about everyone in an urban area.

    The second obstacle is the large constituency of transportation planners and carpoolers that has grown up around HOV lanes and sees their original concept threatened by the move to HOT lanes.

    What Was the Key to California’s Successful Experiment with HOT Lanes?

    There were two unique circumstances that made the first projects relatively easy to implement. In Orange County, there was right of way in the median of SR 91 set aside originally for HOV lanes, but no money to add them for at least a decade. So when AB 680 was enacted, officials were very supportive of the private-sector proposal to build these needed lanes right away, but as HOT lanes instead of HOV lanes. In San Diego, the second California HOT lane project, there was an existing reversible HOV facility (two lanes, completely separated from the rest of I-15) that was grossly underutilized. A political champion, Jan Goldsmith(former mayor of Poway, but then a state legislator) got the idea for selling the excess capacity so as to make lemonade out of this lemon. The MPO (SANDAG)liked the idea, so they got project-specific enabling legislation passed in Sacramento and landed support from FTA and FHWA for the conversion.

    Why Haven’t We Seen More HOT Lane Projects in California?

    With no general HOT lanes or tolling legislation on the books-AB 680 enabled just pilot projects-and with the egalitarian and carpooling arguments still fairly potent, it’s been tough to get more projects implemented. The most recent progress has been in the Bay Area, where legislation was approved in 2005 to permit the planned HOV for 1-680 (Sun01 Grade) to be developed as a HOT lane instead, and also to permit a few pilot HOT lane projects in Santa Clara County (Silicon Valley).

    What Is the Future of HOT Lanes in the United States?

    I think the future of value-priced lanes is very bright. SAFETEA-LU, the most recent federal transportation bill, brought two important changes. First, the existing Value Pricing Pilot Program has “graduated” conversions of HOV to HOT lanes. They no longer need special permission from the federal government or have to compete for scarce pilot program funds. Second, the law includes a new Express Toll Lanes pilot program, under which up to fifteen projects may be done anywhere in the country to add such lanes to congested interstate highways.

    Even before these federal changes, at least a half-dozen metro areas had announced studies of whole networks of priced (managed) lanes. Projects under which private firms will add priced lanes to congested freeways are under way in Atlanta, Dallas, Denver, and Northern Virginia, and other HOT or priced lane projects or systems are under study in Miami, Houston, Minneapolis-St. Paul, Seattle, San Diego, and various places in Maryland and North Carolina. So the idea is really moving forward.

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