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The U.S. Congress established the Congestion Pricing Pilot Program in 1991. It was subsequently renamed the Value Pricing Pilot Program (VPPP) under Section 1216 (a) of Transportation Equity Act for the 21st Century (TEA-21) in 1998, and continued into Section 1604(a) Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), P.L. 109-59 signed on August 10, 2005. The Moving Ahead for Progress in the 21st Century Act (MAP-21) did not authorize additional funds after Fiscal Year (FY) 2012 for the discretionary grant component of the VPPP. However, the Federal Highway Administration's (FHWA) may still enter into cooperative agreements for projects that require tolling authority under this program for their implementation.

Congress established the VPPP to demonstrate whether and to what extent roadway congestion could be reduced through application of congestion pricing strategies, and to estimate the magnitude of the impact of such strategies on driver behavior, traffic volumes, transit ridership, air quality and availability of funds for transportation programs.1 The program has provided tolling authority and discretionary grants to State or local governments to facilitate the demonstration of congestion pricing applications and report on their effects. There are 12 State-led programs and 2 city-led programs participating in the VPPP: California, Connecticut, Florida, Illinois, Maryland, Minnesota, New Jersey, New York City, North Carolina, Oregon, Texas, Virginia, Washington State, and the District of Columbia. Many of these programs have multiple projects.

There is a consensus among economists such as Paul Krugman of the New York Times that congestion pricing represents a viable and sustainable approach to reducing traffic congestion. Congestion pricing works by shifting some rush hour highway travel to other transportation modes or to off-peak periods. By removing a fraction (even as small as 5 percent) of the vehicles from a congested roadway, pricing enables the system to flow much more efficiently, allowing more vehicles to move through the same physical space.2

Although drivers unfamiliar with the concept initially have questions and concerns, based upon survey results described throughout this report, drivers who are more experienced with congestion pricing support it because it offers them a reliable trip time. Transit and ridesharing advocates also appreciate the ability of congestion pricing to generate both funding and incentives to make transit and ridesharing more attractive. Through the VPPP, as well as follow-on initiatives such as the Congestion Reduction Demonstrations (CRD), Urban Partnership Agreements (UPA), and Express Lanes Demonstration programs, the FHWA provides key support to States to help them implement strategies to manage congestion problems. More importantly, findings from deployed projects continue to demonstrate that the application of innovative congestion pricing strategies can effectively manage demand on congested urban facilities.

The Value Pricing Pilot Program and Other U. S. Department of Transportation (DOT) Congestion Pricing Initiatives

Value Pricing Pilot Program

The VPPP encourages implementation and evaluation of value pricing pilot projects to manage congestion on highways through tolling and other pricing mechanisms. Although there is no longer a discretionary grant component, many States have gained experience with pricing strategies with the help of the VPPP, and States now have the capacity to implement larger-scale value pricing projects. The FHWA continues to support States' and regions' pricing initiatives by offering guidance and expertise in choosing the most promising and appropriate of the emerging strategies. Congestion mitigation, environmental concerns, and limited funding for highway construction has led to increased interest by State, regional and local transportation agencies in congestion pricing as a strategy to manage congestion on oversubscribed roads. As a result, the DOT has made several other congestion pricing funding programs available to help agencies implement pricing strategies.

Urban Partnership Agreements and Congestion Reduction Demonstrations

In 2006, the DOT launched a Congestion Initiative to demonstrate a variety of innovative but proven strategies that could provide relief to traffic gridlock if more widely practiced. The UPA/CRD programs that resulted from the Congestion Initiative encouraged more aggressive, broad-scale, pricing approaches. During 2007 and 2008, DOT awarded UPA/CRD funds to Seattle, San Francisco, Minneapolis-St. Paul, Miami, Atlanta, and Los Angeles.

Report Organization

This report provides an update on the various projects and studies that received funding through the VPPP and the UPA/CRD initiatives. All projects described in this report received funding and assistance from the VPPP or the UPA/CRD initiatives, and the level of assistance each project received from the VPPP is listed in Appendix A. The report then discusses FHWA's recent outreach and technical assistance efforts to advance congestion pricing beyond the VPPP and UPA/CRD project locations. Finally, the report provides an overview of emerging trends in congestion pricing and FHWA's plan for encouraging these trends and innovations across the country.

1 Section 1012(b)(5) of the Intermodal Surface Transportation Efficiency Act of 1991, PL 102-240, as amended by section 1216(a) of the Transportation Equity Act for the 21st Century (TEA-21), and section 1604(a) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), PL109-59 (August 10, 2005). [ Return to note 1. ]

2 Congestion Pricing – A Primer: Overview, U.S. Department of Transportation, Federal Highway Administration, October 2008, [ Return to note 2. ]