Effective Approaches for Advancing Congestion Pricing in a Metropolitan Region
2. Benefits from Using Congestion Pricing to Support Regional Goals
Congestion pricing strategies can support regional goals by providing two direct benefits: improving multimodal system performance and generating revenues for transportation investments. These impacts, in turn, provide the opportunity to support multiple planning goals, including improving economic competitiveness; supporting environmental quality (e.g., air quality), energy efficiency, and sustainability (e.g., reducing fuel consumption and greenhouse gas emissions); enhancing travel options and livability; and supporting a state of good repair for infrastructure.
Improving Multimodal Transportation System Performance
Traffic congestion in urban areas, at ports, and other areas (e.g., beach vacation destinations, special event locations), creates travel delays that lead to real economic costs for regions, decreased reliability, and increased pollutant and greenhouse gas emissions, in turn leading to public health impacts. Many people feel the effects of congestion, including vehicle occupants and transit riders who must endure time stuck in traffic and businesses that are impacted due to congestion-related delays affecting their distribution of goods.
Congestion pricing can potentially improve the performance of the transportation system across modes in the following ways:
Evaluation results from implemented projects show how different types of congestion pricing strategies can improve transportation system performance and provide additional travel options. Even a small reduction in traffic may significantly improve system performance and reliability for transit and personal motor vehicles, as shown in the examples highlighted throughout the remainder of this section.
Generating Revenues for Transportation Investments
It is widely recognized that one of the greatest challenges in the coming years will be preserving, operating, and enhancing the Nation's transportation system in an era of limited funding, expanding needs, and increasing costs. Increasingly, there is recognition that traditional fuel taxes are inadequate to meet revenue needs because tax rates have not kept pace with inflation, improvements in vehicle fuel economy are diminishing their value, and investment needs continue to grow.
Congestion pricing is a potential funding source for highway infrastructure improvements and for on-going highway maintenance, operations, and management, transit services, and other related investments. For instance, excess revenues remaining from funding operating costs of HOT lane projects in Miami, San Diego, Minneapolis, and Los Angeles are being used to fund transit improvements, ridesharing programs, traffic management using ITS, or travel demand management programs in the HOT lane corridors. The State of Washington expects the recently implemented variable pricing on the SR 520 bridge connecting Seattle to Redmond to contribute funds toward constructing the new the bridge. Revenues from the pricing will be combined with traditional Federal and State funds. Revenues from cordon pricing in London, Singapore, and Stockholm have been used in part to fund regional transit improvements in each of these cities.
Apart from the ability to raise revenues directly, congestion pricing also offers the opportunity to involve the private sector in financing the capital costs of new lanes/facilities because of the potential to generate returns. For example, managed lanes on I-635 (LBJ Freeway) and North Tarrant Express in Dallas and Fort Worth are being constructed with 60-70 percent private sector funding. In Virginia, a private sector consortium has entered into a public-private partnership with the Commonwealth of Virginia to build four new HOT lanes on the Capital Beltway, funding about 60 percent of project costs through private equity, loans, and bonds that will be paid for by the tolls levied on motorists who choose to use the new HOT lanes.
The extent to which the revenues from congestion pricing can support transportation needs on a regional level will depend on the scale and type of proposed pricing projects. Regional or broad-based pricing, such as regional networks of priced facilities proposed in the San Francisco Bay and Puget Sound areas will be more suited for this purpose than individual projects like a single HOT lane. Some MPOs that are including pricing strategies in their metropolitan transportation plans to meet transportation investment needs include the North Central Texas Council of Governments (NCTCOG) for the Dallas region, the Puget Sound Regional Council for the Seattle region, the Metropolitan Council for the Minneapolis/St. Paul Twin Cities region, and the New York Metropolitan Transportation Council (NYMTC) for the New York region.
Supporting Economic Competitiveness / Freight Movement
Congestion pricing can lead to improved economic competitiveness by supporting reliable and timely access to employment centers, educational opportunities, services, and other basic worker needs as well as improved business access to markets. It may also reduce the economic costs of congestion-related delays, which, according to the Texas Transportation Institute's 2010 Annual Urban Mobility Report, stood at $115 billion in the form of 4.8 billion lost hours and 3.9 billion gallons of wasted fuel nationwide.
Congestion affects the productivity of not only workers, but also businesses, who are constrained by time-bound schedules for the delivery of goods. These effects are critical in industries that rely on time-sensitive shipments or those that rely on freight movement as a significant portion of their supply chain costs. Congestion and reduced reliability on the transportation network therefore affect the accessibility, operations, productivity, and competitiveness of the Nation's businesses across virtually all economic sectors. Giving motorists the option to pay for a congestion-free ride provides greater choice for travelers and reduces the overall costs of congestion by allowing high-value and time-sensitive trips to occur with faster travel times than trips where travel time is of less importance. In addition, it maximizes economic return on existing investment by optimizing use of the transportation infrastructure.
Supporting Environmental Quality, Energy Efficiency, and Sustainability
Motor vehicles are a significant cause of air pollution that harm human health, including carbon monoxide, particulate matter, and ozone precursors (hydrocarbons and nitrogen oxides), as well as carbon dioxide and other greenhouse gases (GHGs) that contribute to climate change. Moreover, areas with current or past air quality problems must demonstrate through the transportation conformity process that their long-range plans do not impede the ability to attain or maintain air quality standards. Congestion pricing strategies can support environmental quality through both reduced fuel consumption and decreased pollution and greenhouse gas emissions, as explained below.
Enhancing Travel Options, Transit, Livability, and Sustainability
Livability in transportation is about improving quality of life by creating travel choices within more balanced multimodal transportation networks while supporting and enhancing communities. The concept of livability was given greater clarity and definition through the six livability principles established by the Sustainable Communities Partnership between the U.S. DOT, EPA, and HUD (see text box). The ways in which pricing enhances economic competitiveness have already been discussed above. Pricing can support livability in other ways as well by:
Supporting a State of Good Repair
Congestion pricing generates funds that can be used to maintain existing infrastructure in a state of good repair. Because maintenance of existing transportation infrastructure is often a significant portion of total transportation funding needs, revenues generated from congestion pricing can help to support maintenance and preservation of existing transportation infrastructure.
Designing Congestion Pricing Strategies to Achieve Regional Benefits
The benefits of congestion pricing strategies and the extent to which they help support regional goals depend on both the type of pricing strategy and on how revenues are used. Different forms of congestion pricing will have different impacts and may be used to support different goals. For instance, construction of new highway capacity, even with variably priced toll roads, may not yield emissions reductions if it facilitates longer distance travel. However, options, such as pricing existing facilities and parking pricing are likely to result in more significant shifts in travel behaviors in ways that reduce vehicle travel and have emissions benefits. Targeted investments in managed lanes also may help to alleviate unnecessary delay and pollution. The benefits also depend in part on whether revenue from pricing is used to fund transit, bicycle, and pedestrian infrastructure or road improvements. For instance, the city of Austin, Texas, established a parking benefits district by metering on-street parking and dedicating the net revenues to infrastructure improvements in the neighborhood that promote walking, cycling, and transit use, such as sidewalk enhancements and the addition of bicycle lanes.
By developing consensus on regional goals and objectives, regional congestion pricing strategies can be designed to help support these goals. For instance, in the Minneapolis/St. Paul region, congestion pricing was implemented initially both to achieve better utilization of HOV lanes by conversion to HOT lanes and to provide more options for travelers. In Southern California, a key goal for congestion pricing has been to reduce congestion in order to improve economic competitiveness. In the Seattle region, PSRC's Transportation 2040 plan includes pricing on a regional level as part of an overall strategy to support sustainability and reduce greenhouse gas emissions while simultaneously addressing revenue needs. In the Dallas region, air quality improvement, congestion management, and the need to raise funds for maintenance have all been key issues. Given growth in the Dallas region's population and the limited funding available, the region has recognized that tolling is the most viable way to provide new capacity, leading to the development of public-private-partnerships (PPPs) to fund managed lane projects. The regional goals that were discussed at the workshops, for which congestion pricing is being considered in a wide range of regions, are listed in the Appendix (table 1).
United States Department of Transportation - Federal Highway Administration