Effective Approaches for Advancing Congestion Pricing in a Metropolitan Region

3. Challenges Associated with Planning and Implementing Congestion Pricing

To date, congestion pricing strategies have emerged primarily from planning around single projects, such as a new HOT lane project or toll road, rather than from a broader consideration of pricing as part of metropolitan long-range transportation plans. Although congestion pricing has the potential to support regional goals and is a more economically efficient way to manage transportation, planners face a number of challenges in considering congestion pricing at a regional level.

Achieving Public and Decisionmaker Acceptability for Congestion Pricing

Addressing public concerns and potentially negative attitudes toward congestion pricing is critical to successfully integrating congestion pricing into transportation planning and to implementing acceptable and lasting pricing programs. Although there have been several notable successes in implementing congestion pricing, the adoption of these strategies has been somewhat slow, in part due to political expectation of public opposition to paying a direct charge for using roads and the newness of the concept. Congestion pricing essentially calls for a paradigm change, but agencies planning and implementing these programs face challenges because of a range of concerns raised by decisionmakers, the public, and other stakeholders. These often include:

• Equity and fairness concerns, particularly about adverse effects on low-income groups, local businesses, and jobs. Common equity issues include:
  • Income equity issues, which arise from perceived disproportionate impacts on low-income people because congestion pricing charges represent a larger share of their income, thus limiting their use of priced facilities or tolled lanes. For this reason, express or HOT lanes have often been referred to as "Lexus Lanes." Inflexibility of work schedules for some people who may be affected by pricing during peak commute hours is often a related issue.
  • Geographic equity concerns, which arise from a greater negative impact on people living/working in locations affected by a priced facility or zone as in area-wide and cordon-based pricing programs, and when tolls are imposed on a new, expanded, or existing facility in one part of a region but not on others. For instance, these may be concerns that pricing entry to downtown areas will negatively impact suburban residents.
  • Modal equity, which relates to concerns that converting HOV-only lanes to HOT lanes may create a disadvantage to transit as more single occupancy vehicles start using the lanes. This was a key concern with the I-394 HOT lanes in Minneapolis/St. Paul.
• Concerns about how revenues will be used. The manner in which revenues are used plays a pivotal role in program acceptability, affecting both the actual and perceived equity of congestion pricing. Concerns may arise about the fair distribution of revenues among jurisdictions as well as the extent to which those who pay the fees benefit from the use of revenues. Congestion pricing is seen as a "revenue grab" in regions where there is no experience with tolling or congestion pricing programs.
• Mistrust of toll authorities and private sector involvement in collecting tolls. The public and decisionmakers often have doubts about how toll revenues will be used when independent toll authorities or the private sector collects revenues. In addition, the public is often concerned that private entities will raise the tolls as needed to achieve profitability without consideration of economic and social issues.
• Perceptions about "paying twice" for the use of roads. The public may perceive that congestion pricing means paying twice for the use of roads: once through fuel taxes and a second time through congestion charges. This perception may be significant particularly if only some highways are priced while others are free.
• Privacy issues. This relates to the perception that collecting data on traveler trips through transponders, cameras, or other means compromises privacy. Although privacy has been raised in opposition to congestion pricing schemes, it is typically not the primary issue of concern.

Establishing Compatibility of Regional Goals with Congestion Pricing Objectives

Closely related to public acceptance issues is the lack of clear understanding by the public, decisionmakers, and planners about the role that pricing strategies play in supporting community goals. There is often limited understanding of how different types of congestion pricing strategies and projects are directly compatible with broad regional planning goals, such as economic development, environmental sustainability, and safety.

Some challenges related to matching pricing strategies to regional goals include:

• Contradicting views about the goals for a pricing program. This can occur because the coalition of stakeholders supporting pricing may differ from region to region. In some places, pricing may be driven by environmental advocates and citizens, while in others it may be motivated by business concerns about infrastructure and economic competitiveness.
• Making the connection between land-use and pricing. It is important to consider the relationship between pricing programs and regional land development patterns, which influence system demand in particular locations. Congestion pricing may be difficult to consider in areas with dispersed land use patterns that do not support transit since those who find the tolls to be too expensive may not have a viable alternative.
• Including freight as part of a congestion pricing strategy. Although most regional models show significant travel time savings and improvements in reliability, freight operators often do not believe there will be enough congestion reduction. Even though trucking and logistics firms typically have only a small portion of their costs represented by tolls, demonstrating the benefits to these users is often a key challenge.

Interagency Collaboration on Congestion Pricing Programs

Successful congestion pricing projects and integration of pricing into regional transportation plans requires consensus and collaboration among multiple agencies. Different agencies will typically have different areas of focus, including roadways, transit, toll roads, and the environment, and different interests in regard to revenue generation, congestion management, and transit funding and operations. Key challenges associated with interagency collaboration include:

• Agreement on how to best achieve regional objectives. It may be difficult for agencies with different interests to agree on how congestion pricing can support regional goals. For instance, one of the objectives of a HOT lane network may be to use any limited excess revenues, if available,⁵ to finance the construction of key bottleneck segments of the network. However, other regional objectives such as air quality improvement and support for transit can work at cross purposes to revenue generation. Transit agencies, air quality and smart growth advocates, and other constituencies typically advocate for free use or reduced tolls for certain vehicle classes such as transit buses, HOV, clean fuel, motorcycles. It may therefore be difficult to reach regional consensus that strikes a balance between competing goals and objectives.
• Costs and revenue allocation. In an era of scarce funding for transportation, the allure of a "new" funding source such as roadway pricing is apparent. However, allocation of both the costs of constructing priced facilities and allocation of revenues among jurisdictions, constituencies, and modes (e.g., transit, roadways) can be contentious issues. Similar to a transit network, a network of HOT lanes can provide the user and the region with much greater benefits than the sum of the impacts of individual HOT lane projects. However, agencies often tend to look at the benefits and costs that would result from individual projects within their jurisdiction as opposed to the broader regional view.
• Agreeing on how to manage and operate pricing systems. In many major metropolitan areas, tolling agencies have operated tolled facilities for many years and have established and operated most of the infrastructure required for roadway pricing facilities. DOTs and transit agencies are becoming increasingly interested and involved in such projects, but have less experience with tolling operations. In order to be most effective, these agencies need to be able to adjust operating policies and technology to adapt to the different business needs of pricing projects. For example, electronic toll collection technology used on a toll bridge may not be adequate for a HOT lane network where there are multiple access/egress points. Since the systems must be regionally interoperable, the agencies must agree upon compatible technology, yet achieving interoperability between new and existing tolling systems operated by different agencies and in different jurisdictions can be a challenge. Moreover, a regional HOT lane network must have some level of consistency in operating hours, tolling strategy, access/egress design, occupancy requirements and other policies in order to make their use relatively seamless to the driver. Pricing projects that cross State lines create additional challenges related to project management, operations, and revenue distribution due to different approaches followed in different States.
• Silos between and within agencies. Oftentimes, silos within agencies are a barrier to collaboration. Personnel working on highway improvements are typically only in charge of delivering those projects, creating challenges for a variably priced project involving transit and operational improvements in a multimodal strategy. Achieving agreements between MPOs, a State DOT, and transit agencies, all of which may have different goals and objectives, can be a challenge, and everyone needs to be on board with the effort very early on.
  There are also cultural differences that exist between and within agencies. MPOs and other local agencies (e.g., transit operators) sometimes work better together than MPOs and DOTs, while in other cases, DOTs and highway or tolling authorities work well together. Within DOTs, there is often a heavy focus on highway infrastructure, engineering planning, project development, whereas there is often a more limited focus on system management and operations.

Analytical Challenges in Evaluating Impacts and Integrating Congestion Pricing into Regional Plans

As regions begin to consider congestion pricing at a broader level as part of transportation plans, there are a number of key issues that need to be addressed to integrate pricing more fully into metropolitan transportation planning. A key challenge is associated with limited modeling capability to analyze congestion pricing impacts accurately. Long-range planning conducted by MPOs relies on travel demand forecasting models, which typically are not well suited to addressing congestion pricing, particularly dynamic pricing approaches where prices vary in real-time based on levels of congestion. This raises challenges in accurately forecasting travel impacts and impacts on emissions for air quality conformity analyses. Forecasting revenues reliably is another important issue for successful project implementation, particularly in projects involving public-private partnerships. In terms of prioritizing projects for funding, existing project selection processes are not designed to "score" congestion pricing projects and programs with respect to attaining various goals.

Specific analytical challenges include:

• Technical capability: Modeling to analyze congestion pricing programs is complex, with several inherent uncertainties such as how to incorporate changes in travel times and how to predict long-term travel behavior for passengers and freight. Many agencies typically use standard four-step travel demand models, which cannot capture the full effects of pricing programs. The impacts on land use and economic development, as well as potential secondary impacts, are also not typically captured. In many regions, freight is a very important factor (e.g., Chicago), but the models do not accurately capture the impacts of congestion pricing on freight traffic. Impacts on speeds are also sometimes not captured in regional models. Agencies often do not have the staff expertise, modeling capability, or the time to focus on developing new analytical techniques.
• Uncertainties in expected travel behavior changes and elasticities: Even for agencies that use sophisticated activity-based models, analysis for congestion pricing requires going into relatively new and unfamiliar territory regarding price elasticities and possible diversion onto other roads. For example, in analyzing the cordon-based congestion pricing proposal for New York City, moving from no charge to a $8 congestion charge would imply changes in travel behaviors that have never been seen, leading to uncertainties in the values of price elasticities to use. Typically, stated preference surveys where people report how they would behave in hypothetical circumstances (e.g., if a congestion charge were implemented in the future) are used to calibrate travel demand models. But this is not an indicator of how people will actually behave once the program is implemented. In London, for example, higher than expected levels of congestion reduction resulted than the models had shown, leading to lower revenues than anticipated.
• Conducting robust equity analysis: In planning for maximum acceptability as well as moving a congestion pricing project along towards the environmental review process, important equity and environmental justice issues typically must be analyzed. Detailed data on user costs and travel patterns for different segments of the population may be required, and this can cause challenges. For instance, in New York City, the potential geographic impacts of the congestion pricing proposal could be analyzed, but income equity impacts were not captured well enough to support the regional plan. Longer-term data collected through longitudinal surveys would be required to determine how travel behaviors change.
• Collecting detailed data and conducting analysis required to understand local impacts: Moving from broad, regionally scaled scenario analyses to detailed project level analysis requires even more data and technical capability. For example, it is difficult to document the impact of diversion to streets just outside a pricing cordon or parking impacts in areas on the periphery of the cordon. Even if regional models can handle the issue of traffic diversion between facilities, accounting for shifting travel between time periods is a challenge. Overall, the assumptions for aggregated behavior do not capture the disaggregated decisions individuals make. Detailed analysis at the local level is essential for an environmental impact review, as seen in Seattle, Dallas, San Francisco, and Los Angeles.

Legislative Barriers and Other Implementation Challenges

In addition to the challenges noted above, there are a number of other challenges MPOs and State DOTs may face with regard to planning and implementing congestion pricing, including:

• Lack of authority to implement pricing on previously free or federally funded facilities: Any State seeking authority to implement pricing on free or federally funded facilities must request it by project from the FHWA. Many regions are constrained by State or regional legislation that in some way limits how revenues may be used (e.g., revenues spent within the same corridor where they were generated) or which areas may be tolled (e.g., restricting the ability to convert general purpose lanes or to switch from HOV 2 to HOV 3 occupancies). The California State legislature prohibits changing the minimum occupancy requirements on existing HOV lanes when they are converted to priced lanes (e.g., in L.A.), while other States like Georgia prohibit conversion of general purpose lanes to HOT lanes (e.g., in Atlanta).
• Limited public and private funding: In economically uncertain times, regions face a lack of public funds for new pricing projects, and the private sector involvement in public private partnerships may be limited. Further, interest in job creation leads public entities to focus on capacity improvements as opposed to managing existing capacity through the use of congestion pricing.
• User experience and unfamiliarity with different requirements: Users may be confused when pricing strategies differ on different corridors in the region. For example, some corridors allow vehicles with three or more occupants (HOV 3+) to travel free on HOT lanes, while others allow vehicles with two or more occupants (HOV 2+) to travel free on priced lanes. In Dallas, efforts are currently underway to work with policy makers to change the minimum occupancy requirement for driving free on managed lanes from HOV 2+ to HOV 3+ while maintaining user support. This is a challenge because some HOV 2+ drivers who previously drove free on the lanes would be required to start paying tolls under the modified policy.
• Technology issues: Specific challenges include public perception of the technology, how it works, where it intrudes or doesn't, and interoperability of technology. A region needs to have good technological infrastructure in place to be able to implement pricing programs, and this challenges regions that do not currently have ITS or tolling in place.