USDOT Resources: Center for Innovative Finance Support
Tolling and Pricing Public Acceptance and Outreach Webinar - Session 2

Patrick DeCorla-Souza, Tolling and Pricing Program Manager, FHWA
Lee Munnich, Humphrey Institute, University of Minnesota
Bruce Schaller, New York City Department of Transportation
John Doan, SRF Consulting

Center for Innovative Finance Support
Federal Highway Administration

Second Part of a Webinar Series on Road Pricing Outreach

FHWA - Center for Innovative Finance Support Road Pricing Public Acceptance and Outreach Webinar Mini-Courses

Moderator:

John Doan, SRF Consulting

Presenters:

Patrick Decorla-Souza, Tolling and Pricing Manager, FHWA
Lee Munnich, Humphrey Institute, University of Minnesota
Bruce Schaller, New York City Department of Transportation
John Doan, SRF Consulting

Audience Q&A:

Type questions into the chat box. The moderator will field your question to the appropriate panelist. Questions will be answered at the end of each session and during the last 15 minutes of the webinar.

Presentation Outline

Communicating with stakeholders (Patrick DeCorla-Souza)
Public perceptions and congestion pricing (Lee Munnich)
New York City experience (Bruce Schaller)
Case study (John Doan)

Part 1 Communicating with Stakeholders

Patrick DeCorla-Souza,
Tolling and Pricing Program Manager,
FHWA

Equity Concerns - Types of equity concerns

Income-based
Modal
Geographic
Fairness (paying twice)

Income-Based Equity

Social Justice Advocacy Groups' concern:
This will be a regressive tax on those who can least afford it.

New Priced Lanes: Equity Concerns

Tolls require a larger share of the income of low-income commuters.
So lower-income drivers use priced facilities less often
This creates an equity issue ("Lexus lanes")`

SR 91 Express lanes graph

Share of Income Spent on Tolls

$2.00 bridge toll on SR 520 bridge

Graph - Share of Income Spent on Tolls

Addressing Equity Concerns

Addressing income-based equity:
- Improved and/or lower cost transit service
- Toll credits or discounts for means-tested drivers
- Reimbursements of the amount of toll above the transit fare (NYC)
- Convenient ways for the "unbanked" to pay
- Modal Equity

Modal Equity

Transit Advocacy Groups' Concern:
Congestion relief will encourage choice transit riders to abandon transit and go back to their cars.

Transit and Congestion Pricing

Transit and Congestion Pricing Graphic

Addressing Modal Equity Concerns

Addressing Modal Equity:
- Dedicate some of toll revenue to transit (San Diego, Minneapolis)
- Provide free or discounted service for carpools (HOT lanes)

Geographic Equity

Local residents' concerns:
Why do I have to pay for my road, when my tax dollars went to pay for the other guy's road?"

Region-wide Approach

Long-Range Planning:

Incorporate road pricing into long-range planning
All regional residents share in the burden

Graphic of Map

Region-wide Approach vs. "Patchwork"

Affordability:

Lower tolls can be charged, since the financial burden is spread over more drivers

Map

Efficiency:

Tolls on only improved facilities will lead to sub-optimal use in off-peak
- Discourages use in off-peak
- Causes diversions to free facilities

Map

Paying Twice

Motorist Advocacy Groups' Concern:
Why impose tolls on existing free roads already paid for with taxes?

Construction Cost of New Lanes

Providing "free" new capacity is financially unsustainable
Fuel tax receipts from peak trips are less than 6% of capital cost for constructing a new lane

Graph of Construction Cost of New Lanes

Construction Cost per Peak Trip

Costs in Major Urbanized Areas	Normal Cost	High Cost
Highway construction cost/ lane mile*	$13.4 M.	$55.9 M.
Daily traffic volume in peak periods (5-6 hours/day)	10,000 vehicles	10,000 vehicles
Const. cost per vehicle per mile	$1,340	$5,590
Const. cost for 20-mile round trip	$26,800	$111,800
Annualized const. cost for 20-mile trip**	$1,742	$7,267
Cost for 20-mile trip per working day	$7.00	$29.00
Gas tax paid for 20-mile trip (2 cents/mile)	$0.40	$0.40

*Source: FHWA, in 2006 dollars
**Annualization factor 0.065 assuming a 5.25% discount rate and 30-years

Costs for Reconstruction per Trip

Costs in Major Urbanized Areas	Average Cost
Cost per lane mile*	$6.7 M.
Daily traffic volume (24 hours)	20,000 vehicles
Reconstruction cost per vehicle per mile	$335
Reconstruction cost for 20-mile round trip	$6,700
Annualized cost for 20-mile trip**	$436
Cost for 20-mile trip per day	$1.20
Gas tax paid for 20-mile trip (2 cents/mile)	$0.40

*Source: FHWA, in 2006 dollars
**Annualization factor 0.065 assuming a 5.25% discount rate and 30-years

Taxes vs. Tolls

Trucking Advocacy Groups' Concern:
Why not just raise taxes - they are less expensive to collect than tolls.

Taxes vs. Tolls: Congestion Delay

Rush hour tolls reduce traffic
A 10-14% reduction in traffic results in an 80% reduction in travel delays

Graph of Taxes vs. Tolls Congestion Delay

Source: The Louis Berger Group Inc. Examining the Speed-Flow-Delay Paradox in the Washington, DC Region: Potential Impacts of Reduced Traffic on Congestion Delay and Potential for Reductions in Discretionary Travel during Peak Periods, 2009.

Benefits to Governments and Public

Government services:

Investment: Reduces new capacity needs
Emergency services: Not stuck in traffic

Societal benefits:

Economic: Improves freight transportation productivity
Environment: Reduced greenhouse gases and improved air quality
Community: Encourages use and development of alternative modes

Part 2 - Public Perceptions and Congestion Pricing

Lee Munnich, Humphrey Institute,
University of Minnesota

Citizens Jury

In 1995, the Humphrey Institute conducted a week-long Citizens Jury with 24-randomly selected citizens from the Twin Cities area.
Although the Citizens Jury voted 17-7 against congestion pricing as a way to manage congestion and fund transportation, the exit survey was quite enlightening.
While 16 opposed congestion pricing, 18 of the 24 were open to considering congestion pricing as an effective solution in the future. Their primary concerns were

Congestion not bad enough yet,
Congestion pricing not fair - Lexus Lane concern,
Congestion pricing costs too much - raise gas tax instead; and
Congestion pricing won't work.

Should Minnesota consider congestion pricing in the future?

Citizens Jury Exit Survey

25 percent were solidly against congestion pricing
33 percent were in favor of congestion pricing
42 percent were opposed to congestion pricing but open to consideration if their concerns were addressed

Pie Chart

Loss Aversion

In behavioral economics and decision theory, loss aversion refers to people's tendency to strongly prefer avoiding losses to acquiring gains.
Behavioral studies suggest that losses are twice as powerful, psychologically, as gains.

Graph

Source: Amos Tversky & Daniel Kahneman. "The Framing of Decisions and the Psychology of Choice"
Science, New Series, Vol. 211, No. 4481. (Jan. 30, 1981), pp. 453-458.

CURACAO

A European study of congestion pricing, CURACAO (2008), found that based on European congestion proposals and projects, the public tends to be open to congestion pricing when discussed generally but becomes more opposed to congestion pricing as projects move closer to implementation.
Referenda on congestion pricing before implementation have failed miserably - 75 percent against in Edinburgh, Scotland and 78 percent against in Manchester, England.
However, projects that were implemented in London and Stockholm in spite of public opposition resulted in high levels of public support after implementation and are still in operation.

Public Support for Congestion Pricing