United States
Environmental Protection
Agency
Air and Radiation
EPA 420-R-97-004
September 1997
Opportunities to Improve
Air Quality through
Transportation Pricing
Programs
GFb AQ
Printed on Recycled Paper
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Opportunities to Improve Air
through Transportation Pricing
Quality
Programs
Regional and State Programs Division
Office of Mobile Sources
U.S. Environmental Protection Agency
Prepared by:
ICF Incorporated
9300 Lee Highway
Fairfax, Virginia
With support from:
Apogee Research Incorporated
4350 East West Highway
Bethesda, Maryland
NOTICE
This technical report does not necessarily represent final EPA decisions or positions. It is
intended to present technical analysis of issues using data which are currently available.
The purpose in the release of such reports is to facilitate the exchange of technical
information and to inform the public of technical developments which may form the basis
for a final EPA decision, position, or regulatory action.
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Acknowledgements
EPA would like to thank the following people for providing information about their
organization's transportation pricing program:
Dan Paradee
Sam Seward
Michelle King
Deborah Redman
T.J. Johnson
Maine Turnpike Authority
Milwaukee County Transit System
San Diego Association of Governments
Southern California Association of Governments
Washington State Commute Trip Reduction Program
This document benefits greatly from these real examples of transportation programs. Detailed
information about each of these programs can be found in Appendix A.
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Table of Contents
PAGE#
Chapter 1 Why Should I Be Interested in Transportation
Pricing? 1
The Costs of Automobile Use 1
Estimates of the Hidden Costs of Automobile Use 7
Fixing the Market Distortion 8
Advantages of transportation pricing measures 9
Chapter 2 The Current Price of Driving 13
Distinction Between Use-Related and Non-Use-Related Fees 13
Conclusion: The Role of Transportation Pricing Measures 16
Chapter 3 Examples of Transportation Pricing Programs 17
Types of Transportation Pricing Measures 17
The Effects of Transportation Pricing Measures on Travel
and Emissions 27
Chapter 4 Institutional Relationships 43
Program Initiation 43
Selecting a Lead Agency 44
Promoting Coordination Among Multiple Agencies,
Organizations, and Levels of Government 47
Chapter 5 Public Involvement and Acceptance 55
What is Public Involvement and Why Does It Matter? 55
Elements of a Successful Public Education and Outreach Campaign 57
Techniques for Effective Public Education and Involvement ...66
Evaluating the Success of the Public Outreach and
Involvement Effort 72
Conclusion 73
Chapter 6 Equity and Transportation Pricing 75
Overview of the Equity Issue 75
Equity and the Current Transportation System 76
The Equity Effects of Transportation Pricing Programs 79
Using Transportation Pricing to Address Equity Concerns 83
Conclusion 85
Table of Contents i
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Chapter 7 Funding Sources 87
Federal Funding Sources .87
Other Funding Sources 97
Summary 100
Appendix A: Case Studies .....................................101
Appendix B: List of Aeronyms 123
Appendix C: List of References 125
ii Table of Contents
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Figures and Tables
Chapter 3 Page #
Table 3-1 Estimated Effects of Transportation Pricing Measures
on Travel Demand and Emissions 30
Table 3-2 Summary of Transportation Pricing Projects 33
Chapter 4
Table 4-1 Potential Lead Agencies and Institutional
Relationships for Various Transportation Pricing Measures 50
Table 4-2 Examples of Institutional Relationships in Transportation
Pricing Programs 51
Chapter 7
Table 7-1 Summary of Funding Sources 100
Table of Contents iii
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Intentionally Blank Page
iv
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Chapter 1
Why Should I Be Interested in
Transportation Pricing?
/ ' " N "¦ ,
.Question:
What do the following have in common?
* V
"ii'/y a.
Smog, particulate matter, carbon monoxide -VN
, - v B.
Greenhouse gases
' : C.
Traffic congestion
Answer:
They are just a few of the many reasons to employ ^
transportation pricing programs.
This document is intended to give state and local air quality and transportation planners,
elected government officials, and other interested parties background information on
transportation pricing programs. Specifically, this document explains why pricing can make
sense, the institutional relationships necessary for pricing measures to work, and some pitfalls
to avoid in implementing a program. Examples of pricing programs adopted throughout the
country illustrate these points. Our hope is to provide sufficient background information for
city, county, regional or state governments to consider using pricing programs to help achieve
better air quality, reduced congestion, reduced pollution of all media from the transportation
sector, a more livable community, or all of the above.
The term "transportation pricing programs" encompasses a variety of different
programs that have a common element: they attempt to incorporate the costs of transportation
decisions into a price that a consumer sees and pays directly. The current pricing of
transportation falls short of this objective.
The Costs of Automobile Use
Driving an automobile imposes many different costs on society as a whole. The effects
are both direct and indirect and result from the production, use, servicing, and disposal of
motor vehicles. Environmental effects include air and water pollution, ozone depletion, effects
on climate, hazardous and solid waste production, noise pollution, loss of habitat, species and
biodiversity, and reduced visibility. Every car trip creates additional air pollution, water quality
impacts, noise, and waste.
Other societal costs include traffic congestion, increased travel time, and money spent
to construct, maintain, and monitor the transportation system. In the 50 largest U.S. cities,
Chapter 1 - Why Should I be Interested in Transportation Pricing?
1
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traffic congestion and delays in 1991 resulted in estimated total economic losses of over $45
billion.1 Driving cars also creates a need for additional public services to handle the problems
caused by accidents: a significant portion of state and local police, fire, ambulance, and court
system's resources are related to automobiles. In 1994, 40,676 lives were lost and 3,215,000
injuries resulted from motor vehicle accidents in the U.S.2 There are also very high monetary
and environmental costs associated with building and widening roads and constructing parking
lots. Often, these costs are paid for roads to relieve heavy congestion only in the peak periods,
which may only be 5 to 15 hours per week in each direction, or only 3 to 10 percent of the
week. The other 90 to 97 percent of the time these large investments may not be in full use.
Similarly, high costs are incurred in constructing parking lots. Most cities' parking
requirements leave spaces vacant more than 99 percent of the time a shopping center is open
for business, and leave at least half the spaces vacant at least 40 percent of the time.3
Though some of the costs of automobile use are paid through gasoline taxes, these taxes
are not sufficient to cover all of these costs. The remainder of these costs are paid indirectly
through property or income taxes, or are borne by society in the form of additional health costs,
nuisance, or poor environmental quality. Most of these costs are "hidden" costs that are not
directly paid by drivers at the time they make the decision to use their car.
Hidden Costs of Automobile Use
Environmental
• Air and water
pollution
• Ozone depletion
and global climate
change
• Hazardous and solid waste production
• Noise pollution
• Loss of habitat, species and biodiversity
• Reduced visibility
Societal
• Increased traffic congestion and travel times
• Increased money spent to construct, maintain, and
1 U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Statistics
Annual Report. 1996. Washington, D.C., 1996.
2 Ibid.
3 Shoup, Donald C., "An Opportunity to Reduce Minimum Parking Requirements," Journal of the
American Planning Association. Winter 1995, p. 19.
2
Chapter 1 - Why Should I be Interested in Transportation Pricing?
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Environmental Costs
Automobile use imposes significant costs on society in terms of the environmental
impacts. The relationship between vehicle use and air pollution, global climate change, and
other environmental concerns is discussed briefly below.
Air Pollution
Despite considerable progress
since the Clean Air Act of 1970,
unhealthy air pollution levels still plague
virtually every major city in the nation.
Motor vehicle emissions contribute to
four of the six criteria pollutants: volatile
organic compounds (VOC) and oxides of
nitrogen (NOx) emissions, which combine
to form ozone; carbon monoxide (CO);
nitrogen dioxide (N02); and PM-10.
Although today's cars are 70 to 90
percent cleaner than their 1970
counterparts, transportation emissions continue to be a significant Icause of air pollution due to
the rapid increase in vehicle travel since 1970. Vehicle miles traveled (VMT) have more than
doubled in the U.S. from 1970 to 1990,4 tripled from 1960, and increased even faster in many
specific metropolitan areas. For example, VMT in Las Vegas increased 160 percent from 1981
to 1991, and nearly doubled in Phoenix in the same ten years. From 1970 to 1990, VMT
increased 120 percent in the Los Angeles region, and 216 percent in San Diego.5
Pollution Volumes Resulting from On-
Road Transportation Emissions in 1995
• Nearly one-third (27 percent) of VOC
emissions;
• Over one third of the NOx (35 percent)
emissions;
• 64 percent of the CO emissions; and
• 12 percent of PM emissions.
Source: U.S. EPA. National Air Quality and
Emissions Trends Report, 1995
4 U.S. Environmental Protection Agency, National Air Quality and Emissions Trends Report. 1995.
Research Triangle Park, NC, October 1996.
5 Information compiled by EPA based on reports from local air quality agencies.
Chapter 1 - Why Should I be Interested in Transportation Pricing?
3
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Non-Road: Recreation, construction,
industrial, light
commercial and
lAfrrriiKt \70nir»1ap z
On Road: Cars, light trucks,
Transportation Emission Sources
motorcycles, and
heavy duty
vehicles (e.g., trucks, busses)
logging vehicles, •
From 1960 to 1995, per-mile
emissions declined by 82 percent for
VOC, 48 percent for NOx, and 70
percent for CO.6 Total emissions from
on-road vehicles, however, have not
fared as well: total VOC emissions
declined only 41 percent, total NOx
emissions increased by 73 percent, and
total CO emissions increased by one
percent.7 The available data for PM-10
show that on-road emissions decreased
by 31 percent per mile between 1985
and 1995, but increased 9 percent
overall.8
The health effects of these air pollutants range from headaches and eye irritation to
reduced lung function, lung damage, respiratory disease (such as asthma and bronchitis), and
cancer. According to the American Lung Association, the death rate for lung disease has risen
faster than that of any of the other leading causes of death in the last decade. According to the
American Lung Association, the health effects of air pollution are estimated to cost $50 billion
each year.9
Global Climate Change
There is no question that the concentration of greenhouse gases in the atmosphere —
most notably carbon dioxide — has been increasing, nor that the climate is undergoing changes.
The questions are (1) how great that change is, and (2) to what extent human activity, such as
the burning of fossil fuels, is responsible. The most recent assessment of the United Nations'
Intergovernmental Panel on Climate Change (IPCC), made up of about 2,500 distinguished
scientists from around the world, sheds light on these questions. In November of 1995, this
group of scientists predicted that global temperatures would rise 2 to 6 degrees Fahrenheit over
6 Calculations based on data found in: U.S. Department of Transportation, Bureau of Transportation
Statistics, National Transportation Statistics. 1997, and U.S. Department of Transportation, Federal
Highway Administration, Federal Highway Statistics. 1995. Washington, DC, 1996.
7 U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation
Statistics. 1997.
8 U.S. Environmental Protection Agency, National Air Quality and Emissions Trends Report. 1995.
Research Triangle Park, NC, October 1996.
9 American Lung Association web page, http://www.lungusa.org
4
Chapter 1 - Why Should I be Interested in Transportation Pricing?
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the next century.10 The IPCC has concluded that "the balance of evidence suggests that there is
a discernable human influence on global climate." In December of 1997, the U.S. and other
governments will convene in Kyoto, Japan to establish internationally binding targets for
greenhouse gas reductions.
If temperatures rise as predicted, the potential cost of climate change to our
environment and economy is enormous. Between September 1989 and September 1994, the
world experienced at least 15 separate weather-related disasters in which financial losses
exceeded $1 billion.11 In addition to these weather-related events, predicted effects of large-
scale climate change are loss of agricultural and forestry production, and large-scale damage
from flooding and drought. According to Franklin Nutter, President of the Reinsurance
Association of America, "the insurance business is first in line to be affected by climate
change... it could bankrupt the industry."12
The combustion of fossil fuels is one of the major contributors to the increase in carbon
dioxide emissions and emissions of other greenhouse gases. Our transportation sector alone is
responsible for 32 percent of anthropogenic (those caused by human activities) C02 emissions
in the U.S., which is seven percent of greenhouse gases world-wide. The transportation sector
also has the highest rate of growth of C02 emissions in the U.S.13
Other Environmental Impacts
This introduction has an emphasis on air impacts because protecting air quality is the
particular mission of EPA's Office of Mobile Sources. However, transportation activities
affect and contribute to a great many environmental and ecological problems corresponding to
EPA's mission as a whole. These effects are just as critical to public health and the health of
the environment. Some of these environmental impacts are described below.
Water Pollution
Automobiles are a substantial source of water pollution in the form of urban
runoff and atmospheric deposition. Urban runoff, loaded with pollutants that leak from
or wear off automobiles, is washed off roads and other paved surfaces into surface
waters and seeps into groundwater. The paving of land for roads and parking (around
10 "Climate Change 1995: The Science of Climate Change," edited by J.T. Houghton, L.G. Meira Filho,
et al, Contribution of WG1 to the Second Assessment Report of the Intergovernmental Panel on Climate
Change. 1996.
11 Flavin, Christopher, "Storm Warnings: Climate Change Hits the Insurance Industry," World Watch.
November/December 1994, p. 11.
12 Ibid, p. 12.
13 U.S. Department of Energy, Annual Energy Outlook 1997. Energy Information Administration,
DOE/EIA-0383(97), December 1996.
Chapter 1 - Why Should I be Interested in Transportation Pricing? /
5
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40 percent of urban areas) increases the amount of impervious surface which in turn
increases runoff and reduces groundwater recharge. This has the effect of increasing
stormwater flows to sewer systems, which can lead to discharges of polluted water
when municipal sewer systems become overloaded. Pollutants originating as air
emissions from vehicles are also deposited from the atmosphere into surface waters. \
Some of the pollutants associated with automobile use include grease,
antifreeze, coolant and other engine fluids that contain tiny metal particles and other
toxics; copper, lead and zinc from eroded brake pads; ferrous oxide and other metals
from body rust and paint; rubber, steel and zinc from worn tires; motor oil and
antifreeze spilled or dumped improperly; nitrogen from deposition of nitrogen oxide
emissions; salt used on roads; gasoline from leaking underground storage tanks; and oil
and other petroleum products that are spilled in transport.
Solid Waste
Solid waste generated from the construction of vehicles and roadways and the
disposal of obsolete vehicles, as well as asphalt, concrete, and other materials, adds to
landfills, contributes to air pollution if incinerated, and contaminates water systems. In
addition, the improper disposal of materials, such as old tires, lead and acid in batteries,
and pavement, remains a serious problem. Of the 242 million tires scrapped in 1990,
77.6 percent of them were landfilled, stockpiled, or illegally dumped.14
Land Use and Habitat
In the U.S., paved and unpaved public roads occupy 25,000 square miles of
land, an area equal to the size of West Virginia.15 Transportation infrastructure causes
changes in drainage patterns, creation of microclimates, and fragmentation of animal
habitat by creating barriers between previously joined areas. In addition, construction
has led to the filling in of wetlands and other loss of habitat, which can have deleterious
effects on the species that depend on each of those areas.
Widespread reliance on private vehicles has also encouraged low-density
suburban sprawl. Such development consumes much larger amounts of land to serve a
population than was needed in the past. Low-density development makes it much more
difficult to carry out normal activities by walking, bicycling, or using public transit. As
a consequence, less land can be protected and preserved, and open space is lost.
14 U.S. Environmental Protection Agency, Solid Waste and Emergency Response, Summary of Markets
for Scrap Tires. 1991.
15 U.S. Department of Transportation, 1996.
6
Chapter 1 - Why Should I be Interested in Transportation Pricing?
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Pollution Control Costs
In addition to the environmental costs imposed by automobile use, there are also
substantial costs to control pollution from mobile sources. According to the U.S.
Department of Commerce, consumers, businesses, and governments in the U.S. spent
$17.2 billion (in 1994 dollars) on air and water pollution controls for highway
transportation in 1993.16 This is roughly $1,150 per vehicle for emissions control.
Estimates of the Hidden Costs of Automobile Use
Several studies by the World Resources Institute, the Natural Resources Defense
Council, and others have quantified the hidden costs of automobile use in the U.S.17 These
hidden costs represent the costs or impacts of automobile use borne by society that the
individual consumer does not see or pay when choosing to use his or her automobile. In
estimating these figures, these studies included the costs of all or some part of the following:
• Police, fire, ambulance, road construction and maintenance, and other related
local government expenditures;
• Property taxes lost from land cleared for freeways;
• Parking;
• Air, water, land pollution;
• Noise, vibration damage to structures;
• Global warming;
• Petroleum supply line policing, security, petroleum production subsidies;
• Trade deficit, infrastructure deficit;
• Sprawl, loss of transportation options;
• Uncompensated auto accidents; and
• Congestion.
These studies determined that the total annual hidden costs of automobile usage ranged
from $378 to $730 billion dollars (in 1991 dollars). This represents a subsidy of $5.21 to
$10.07 per gallon of gasoline or $2,185 to $4,220 per car (in 1991 dollars) to automobile
users.18 Though some of the costs outlined above are paid by automobile users indirectly as
16 U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Statistics
Annual Report. 1996. Washington, D.C. 1996.
17 The resulting data from five studies referenced here were compiled by John Holtzclaw, a Ph.D. urban
sociologist and regional planner in San Francisco, CA: Ketcham & Komanoff, 1992; Litman, 1992;
MacKenzie, Dower, & Chen, 1992; Moffet, 1991; and Vorhees, 1992. The full citations for these
studies can be found in the references section at the end of the document.
18 Holtzclaw used the following estimates to make these conversions: 20 mph average fuel consumption;
72.5 x 106 gallons/yr U.S. gasoline consumption; 173 x 104 cars in U.S.
Chapter 1 - Why Should I be Interested in Transportation Pricing?
7
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taxpayers, the remainder of these costs (or impacts on society through lower quality of life)
represent a subsidy to automobile users. That is, the known or direct cost of vehicle use to the
individual is less than the true or social cost of vehicle use. Thus, the "price" of vehicle use is
distorted.
Fixing the Market Distortion
As the figures above indicate, driving is severely underpriced because many of the costs
are hidden, not incurred at the time of travel, or not paid based on how and when people drive
at all. Only a small fraction of the total costs are paid directly by drivers at the time they make
their decision use the car. This small fraction is what the driver pays in existing fuel taxes and
tolls.
Consumers usually consider only their visible, immediate costs when making decisions
about what to consume. Consumers of the roadways — drivers — may consider the cost of the
gasoline or the wear and tear on their car when they are deciding whether or not to drive, but
the other costs such as air pollution, potential effects of greenhouse gases, noise pollution,
water pollution, traffic congestion, potential cost of accidents, or the costs of roads are most
likely not factored into the decision. People will drive more when driving is cheap, and less
when driving is more expensive. The subsidy on automobile usage leads to increased VMT
and must be paid for through higher taxes, increased health costs, and increased costs of
consumer goods. The current transportation system denies people choice and control over what
they pay for and information about the true costs they bear.
Transportation pricing programs seek to remedy that disconnect. These programs use
the power of the market by incorporating the cost of driving into consumer decisions.
Increasingly, people are realizing that transportation pricing programs make sense: preventing
pollution by reducing the incentives for more automobile travel is more efficient than finding
expensive ways to clean it up later or imposing additional restrictions on other sources.
Though they have the common purpose of incorporating the "real costs" of driving into
a person's travel decision-making process, each market incentive program will yield a different
result depending on how it is designed, and at what point the person is aware of the cost of
travel. These programs can be targeted towards specific pollutants, specific problems or goals,
or particular areas. Though these programs can vary greatly because each one will be tailored
for a specific area, transportation-related market incentive programs can be grouped according
to which aspect of driving is charged. The types of programs discussed in this document are as
follows:
• Fuel taxes or other at-the-pump charges, such as "pay-at-the-pump" insurance;
• Fees based on vehicle use and/or emissions;
8
Chapter 1 - Why Should I be Interested in Transportation Pricing?
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• Roadway pricing, including road tolls, premium tolls, and congestion pricing;
and
• Paying for parking and parking cash-out.
Also discussed in this document are the following:
• Subsidies for other modes of travel, such as transit and high occupancy vehicle
(HOV) lanes. Subsidy programs do not try to incorporate the "real costs" of
driving into a person's travel decision making, but instead try to make
alternatives more appealing by lowering their price.
Advantages of transportation pricing measures
Some key advantages of transportation pricing measures, which may be used to increase
support for their introduction, include the following (adapted from Guidance on the Use of
Market Mechanisms to Reduce Transportation Emissions. EPA and DOT, forthcoming):
Applying pricing measures to achieve program objectives, in contrast to
regulatory actions that compel governments or individuals to assume particular
courses of action, provides considerable latitude for individual freedom of
choice.
By reducing driving subsidies and shifting costs to those who are responsible for
them, pricing measures give individuals more information about their
transportation costs and choices and are more fair.
Consumers can make more rational trade-offs between how much they want to
pay and how and when they want to travel under a pricing system based on true
costs; the current system of indirect taxes and subsidies obscures the
information necessary for such choices.
Pricing measures can potentially be effective in reducing congestion or
emissions much more quickly than building facilities or changing vehicles.
Transportation pricing measures encourage markets to develop new and more
efficient solutions to meet travel and access needs that are currently met mainly
through private vehicle travel.
Transportation pricing measures can be applied to all types of travel and trips,
not just employment-related travel. This is in contrast to some TCM programs,
which have been criticized as having a limited (and perhaps inequitable) impact
because they affect only a portion of travel activity.
Chapter 1 - Why Should I be Interested in Transportation Pricing?
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• Transportation pricing measures are typically self-financing and, in fact, may
provide revenue to support their implementation as well as other transportation
improvements.
• Transportation pricing measures can substantially reduce the cost of
transportation (both direct and indirect). Reduced vehicle dependency can result
in improved travel time and reliability in the movement of people and goods,
reduced construction and maintenance costs, lower taxes, and fewer accidents in
addition to lower health costs, and less environmental damage and clean up
(water, climate, noise, solid and hazardous wastes, loss of open space, and
habitat and species).
• Transportation pricing measures can help states and local areas delay or offset
the need for expensive new transportation capacity, help finance that capacity,
and bring about its most efficient use. They also can help cut costs for
maintenance and government services.
• Longer-term, structural changes induced by transportation pricing measures are
critical to the sustainability of transportation and air quality plans, and can help
areas avoid recurring updates of their SIPs in search of new and stronger (and
more expensive) controls to offset VMT growth.
Transportation pricing programs are not required by the Clean Air Act, they are an
additional method for nonattainment areas to use in reducing emissions and can be adopted
with a large degree of flexibility. Although EPA is enthusiastic about pricing programs, these
programs are not necessarily a "quick-fix," or the solution for every area. These programs are
another tool in the toolbox of strategies an area can use in the effort to attain better air quality
and other benefits for its citizens. The actual results achieved will depend on the quality of the
effort invested, as well as other factors, such as the availability of alternatives (e.g., transit or
walking) to realistically accomplish trip purposes. But well-designed programs have great
potential to reduce air pollution at a lower cost than other approaches, while also reducing a
host of other environmental and social problems.
The remainder of this document is organized as follows:
• Chapter 2 discusses, in more detail, the current price of automobile usage to the
individual.
• Chapter 3 introduces the various types of transportation pricing measures that
can be used.
• Chapter 4 investigates the institutional relationships that are necessary for the
successful implementation of transportation pricing programs.
10
Chapter 1 - Why Should I be Interested in Transportation Pricing?
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• Chapter 5 discusses the role of public involvement and acceptance in the
success of transportation pricing programs.
• Chapter 6 examines the issue of equity in the context of transportation pricing
programs.
• Chapter 7 reviews the manner in which existing transportation pricing
programs have been funded and identifies potential sources of funding for future
programs.
In addition, the document includes appendices containing case studies on specific
transportation pricing programs, a list of acronyms used throughout the document, and a list of
references for obtaining additional information.
Chapter 1 - Why Should I be Interested in Transportation Pricing?
11
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Chapter 2
The Current Price of Driving
Automobile drivers experience many costs in our society and must pay for many things.
However, as noted in Chapter 1, drivers rarely pay directly for using the road network and
rarely pay for the air pollution and other costs they impose on others. Rather, the road network,
air pollution costs, and many other driving-related costs are paid for by society in general.
Given the current situation, a stronger link must be made between the price of vehicle usage
and the costs to society.
This chapter focuses on the various prices or expenses that drivers (or vehicle owners)
must pay in order to drive their vehicles. For each of the costs paid by drivers or vehicle
owners, the chapter attempts to divide these costs into those that are "use-related" and those
that are "non-use-related." The chapter concludes with a brief discussion of the role that
transportation pricing measures can play in making the price of driving more comparable to the
costs of driving.
Distinction Between Use-Related and
Non-Use-Related Fees ___
Drivers (or sometimes vehicle owners) pay for a multitude of vehicle-related expenses.
These expenses can be broken down into three categories:
• Costs that are incurred at the beginning, during, or at the end of a trip are use-
related expenses',
• Costs that are related only indirectly to travel (or vehicle use) and may or may
not be incurred during travel (trip or driving cycle) are indirect use-related
expenses', and
• Costs that are incurred regardless of whether the vehicle is actually driven at all
are non-use-related expenses.
This chapter uses these three categories of expenses to describe the costs paid by travel
consumers (i.e., drivers or public transit riders). These costs include vehicle purchase costs;
gasoline costs and fuel taxes; automobile insurance costs; sales, property, and income taxes;
registration fees; automobile repair and maintenance costs; tolls; parking fees; and transit fares.
Recognizing where consumers pay for transportation, and whether these costs depend on the
amount of driving done, is helpful in creating effective transportation pricing strategies.
Transportation pricing programs can be designed to replace existing costs, such as vehicle
Chapter 2 - The Current Price of Driving
13
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registration fees, sales taxes, or insurance costs. If designed appropriately, a transportation
pricing program can yield the same amount of revenue while encouraging cleaner air.
Vehicle Purchase Costs
Most drivers who wish to have unlimited access to a vehicle must pay a price for that
privilege, commonly known as the purchase price. The purchase price (primarily a component
of the cost of vehicle ownership) is not used to support the transportation infrastructure, is not
related to a trip, and thus is a non-use-related expense. The purchase price pays for the
materials and resources that were consumed in manufacturing the vehicle, not for developing or
maintaining the transportation infrastructure necessary for vehicle travel.
Gasoline Costs and Fuel Taxes
A driver or vehicle owner must buy gasoline (or some other fuel) in order to operate a
vehicle. While the cost of gasoline is associated with personal mobility, drivers may not
associate it with a specific trip, particularly if the trip is short; most drivers purchase gasoline at
regular intervals rather than each time the car is driven. Fuel consumption costs depend on a
vehicle's efficiency and how far the vehicle has traveled. Therefore, gasoline costs are use-
related.
Gasoline taxes, which are collected by the federal government, are primarily used to
subsidize construction and maintenance of the National Highway System and state roads. (This
is not to say that fuel taxes fund all of the maintenance and construction costs of roads.)
Automobile Insurance Costs
Part of the responsibility of owning a vehicle is the purchase of automobile insurance.
Because a driver's automobile insurance typically covers costs that result from mishaps that
occur while driving, one might be tempted to call these costs "vehicle/travel use-related."
However, insurance premiums are assessed periodically to cover costs that occur as a result of
accidents or risky behavior (e.g., speeding or driving under the influence). While insurance
costs may be in part based on yearly mileage, they are not incurred during a trip, and thus
represent an indirect use-related expense. Finally, while insurance premiums are sometimes
related to the number of miles an individual drives in a year, this relationship is not substantial.
14
Chapter 2 - The Current Price of Driving
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Sales, Property, and Income Taxes
A consumer who purchases a vehicle must also pay sales and property taxes associated
with the sale and ownership of the vehicle. Employed vehicle owners also incur income taxes.
Each of these taxes supports government operations and pays for public services, including
some related to the transportation system. These taxes are non-use-related because the fee (i.e.,
the tax) and the time at which the fee is incurred by an individual driver or vehicle owner are
not associated with an actual trip.
Registration Fees
An additional cost of vehicle ownership is the registration fee. In most cases,
registration fees cover the administrative cost of collecting and maintaining automobile and
vehicle owner data. Registration fees are non-use-related, since vehicle owners must register
their vehicles regardless of use. Registration fees are usually based on automobile market
value (which discourages the purchase of newer cleaner vehicles), and not on vehicle miles
traveled or time of day during which the vehicle is used.
Automotive Repair and
Maintenance Costs
Sooner or later, all vehicle owners are faced with automotive repair and maintenance
costs. Maintenance might consist of (but is not limited to) tire rotation/replacement, engine oil
changes, windshield wiper replacement, replacement of worn brake pads, maintaining proper
tire inflation levels, etc. The costs associated with routine maintenance and non-routine repairs
are use-related, but only indirectly. Many maintenance activities are not absolutely necessary
for vehicle operation, only for extended or enhanced vehicle performance. Also, maintenance
costs only occur occasionally and are not associated with individual trips.
Tolls
At some point almost every driver comes across a road, bridge, or tunnel with a toll.
Tolled facilities normally have booths set up to charge drivers some set price for utilizing the
facility (stretch of road, bridge, or tunnel). The toll only covers a particular portion of the trip,
and is encountered during a trip, rather than at the beginning or the end. Normally toll
revenues are used to pay for road construction or maintenance or other transportation
infrastructure expenses. Because toll road fees are incurred while driving, they are use-related
(but are not congestion-related).
Chapter 2 - The Current Price of Driving
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Parking Fees
In urban areas, drivers are often confronted with parking fees once they have reached
their destination. In most suburban or rural areas, parking fees are extremely rare. Expensive
parking charges may affect a driver's ability or willingness to travel to a certain destination.
Since parking fees are assessed at the end of a trip, these charges are generally considered use-
related. The fees collected normally do not support public road network expenses.
Transit Fares
Some travel consumers choose other options to meet their mobility needs. Many of
them use public transportation (buses, light rail, subway, etc.) and are charged a transit fare. In
some cases, transit riders are charged for a trip based on its length. In other cases, transit riders
pay a fixed fee per use, regardless of the distance traveled. Transit fares are directly use-related
because the consumers of public transportation are charged at the time of service, and the fare
is used specifically to support the service.
Conclusion: The Role of Transportation
Pricing Measures
As this chapter has demonstrated, there are many costs that drivers must pay in order to
own and drive their vehicles. As noted in Chapter 1, driving also imposes many costs on
society as a whole, including pollution and congestion, that are not paid for by the individuals
who created them. Market-incentive measures, such as transportation pricing, can be used to
incorporate these external costs in the prices consumers pay for transportation, and thus can
directly or indirectly affect consumer choices for transportation modes, travel times, as well as
order and coordination of trips. Transportation pricing can replace other costs consumers face.
In addition, transportation pricing can ensure that consumers in the marketplace pay a price that
more accurately reflects the true costs of travel.
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Chapter 3
Examples of Transportation Pricing Programs
In recent years, a growing body of studies, proposals and projects experimenting with
transportation pricing measures has begun to emerge. Although many case studies continue to
come from abroad, where political and cultural differences cloud some of the lessons those
experiences might offer, transportation pricing measures are beginning to be used in the United
States as well, particularly in severely congested and polluted areas like Southern California.
Currently, FHWA's Congestion Pricing Pilot Project Program appears to provide the greatest
impetus for such programs, offering funding, support and the opportunity to explore these
measures in an experimental context (relieving some of the political opposition that might
otherwise exist). A review of example projects, both hypothetical and applied, can be extremely
useful in understanding the future such of market-based incentive measures in the U.S.
Parking pricing, roadway pricing, gasoline taxes, and modal subsidies have all been
implemented to some extent while emissions fees and VMT fees have been the subjects of
proposals. Other approaches, however, remain theoretical and have not been implemented.
Because these measures are still in the early stages of development, there is significant
variability and uncertainty as to the projected impact on congestion and air quality from each
strategy. This chapter provides a general discussion of each measure, including examples of
specific programs where possible, and discusses the projected travel and emissions impacts of
these measures.
Types of Transportation Pricing Measures
There is theoretical and empirical evidence that mobile source pricing and market-based
transportation controls can achieve effective and economically efficient greenhouse gas and
criteria pollutant emissions reductions via travel demand management. As with any other
economic activity that consumes scarce resources, motor vehicle travel involves a cost. Faced
with alternative modes of transportation, multiple destination options, and a variety of routes
from an origin to a destination, travelers select modes and routes on the basis of monetary cost,
travel time, comfort, and convenience. In the case of motor vehicle travel, monetary costs often
include operating costs, such as gasoline, parking, vehicle repair, and toll costs, as well as
ownership costs, such as vehicle depreciation and insurance. While the latter costs may not
seem to factor into each trip decision, the fact that the automobile owner has already invested
heavily into that mode may encourage him or her to use it as much as possible rather than pay
another set of costs to use mass transit, for example.
Travel demand is inversely related to the costs described above — as costs increase, the
demand for motor vehicle travel decreases. The relationship between cost and the demand for
motor vehicle travel has served as the underlying rationale for the design, development, and
Chapter 3 - Examples of Transportation Pricing Programs
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implementation of strategies that attempt to mitigate the detrimental externalities associated with
motor vehicle travel (e.g., air pollution, energy consumption, noise, etc.).
The purpose of this section is to review the types of transportation pricing programs that
States and localities can implement to promote a more efficient use of the transportation system.
The goal of these measures is to incorporate pricing signals that affect consumer travel decisions
to encourage the use of environmentally cleaner modes of transport in an economically efficient
manner. More specifically, the cost of travel, or transportation, is adjusted so that consumers in
the marketplace pay a price for automobile travel that more accurately reflects the actual cost of
driving in terms of air quality (among other societal costs - see Chapters 1 and 2). The pricing
programs reviewed here are classified into the following categories:
• Parking management and pricing;
• Fuel taxes;
• Pay-at-the pump charges;
• VMT fees;
• Emissions fees;
• Road pricing; and
• Modal subsidies.
Each of these pricing strategies is discussed below. In addition, Table 3-1 summarizes the major
transportation pricing programs in place in the United States and abroad. Detailed case studies
are provided for several of these projects in Appendix A.
Parking Pricing
Given that employer-paid parking subsidizes about one-third of all automobile travel, and
about two-thirds of all automobile travel in the morning peak,19 parking pricing has the potential
to be one of the most effective measures in reducing peak-hour congestion. Well over 90
percent of American workers receive free parking at their places of employment, an untaxed
fringe benefit.20 Employers and municipalities can reduce the number of automobile trips into a
given area with parking strategies, thus reducing congestion, VMT, and vehicle emissions.
These strategies can take the form of higher parking prices to account for parking's true cost and
a charge to employees for parking. Parking strategies also include allowing employees to cash
out of their parking benefits, or the choice of a parking space or a transit subsidy equivalent to
the value of the parking space.
19 Shoup, Donald, "An Opportunity to Reduce Minimum Parking Requirements," Journal of the
American Planning Association. Winter, 1995, p. 15.
20 Downs, Anthony, Stuck in Traffic: Coping with Peak-Hour Traffic Congestion. Brookings
Institute/Lincoln Institute, 1992.
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Increasingly, employers are beginning to raise parking costs to bring them closer to
market price in order to discourage the use of single occupancy vehicles (SOV), largely due to
more stringent air quality requirements. In addition to employer-based policies, some cities and
regions are also looking to use area-wide parking strategies to address severe congestion
problems, particularly in large central business districts (CBDs). Some analysts encourage the
development of these policies on a metropolitan scale in order to prevent overflow parking on
residential streets or surrounding lots. Although few region-wide parking pricing programs are
in place, the City of Minneapolis, Minnesota, Portland, Oregon, and King County in
Washington have made efforts to put in place metropolitan-wide policies.
Despite recent discussions, there has been no action to reduce or abolish subsidized
parking's tax-exempt status. There has been recent attention, however, regarding proposals to
allow employers to offer transit subsidies, which can work in conjunction with increased
parking prices to reduce SOV travel as an untaxed fringe benefit. There has also been recent
attention regarding proposals to allow employers to give their employees the option of a parking
space or the equivalent monetary value. This is known as "parking cash-out."21
Parking cash-out was recently made easier by the Tax Relief Act of 1997, which was
signed on August 6, 1997. The new act changes the tax code to permit employees to accept cash
in lieu of parking benefits. Effective during tax years beginning after December 31, 1997,
employees may choose between receiving parking and taxable salary. And employers who want
to offer their employees a choice between free parking or a raise in salary can now do so without
losing the parking tax exemption for those employees who choose to keep their parking spaces
(previously, the Internal Revenue Code provided that if an employer offered commuters the
option to choose cash in lieu of a parking subsidy, the parking subsidy itself ceased to qualify as
a tax-exempt fringe benefit).
This change gives employees greater freedom to choose how they commute to work.
For employees whose only transportation benefit is parking can now accept a salary
enhancement instead and use transit, walk, vanpool, carpool, or ride a bicycle to work. This
greater flexibility may shift single occupant vehicles from our highways and contribute to
reduced congestion.
Case studies suggest that parking pricing strategies are most effective in areas where
transit is already available. However, even where no public transportation exists, higher parking
costs would encourage more ridesharing.22 If rideshare or park-and-ride services are offered in
addition to increased parking prices, this would further promote van- and carpooling.
21 For more information on parking cash-out, see Shoup, Donald, "An Opportunity to Reduce Minimum
Parking Requirements," Journal of American Planning Association. Winter 1995, p. 14.
22 Downs, Anthony, Stuck in Traffic: Coping with Peak-Hour Traffic Congestion. Brookings
Institute/Lincoln Institute, 1992.
Chapter 3 - Examples of Transportation Pricing Programs
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Fuel Taxes
This pricing strategy involves taxing fuel to more accurately reflect the costs associated
with single occupancy vehicle highway travel. The primary goal of fuel taxes is to discourage
private vehicle (principally single occupancy vehicle or SOV) use by effectively and directly
increasing the cost of travel. Fuel consumers (drivers), through their pocketbooks, become more
cognizant of the societal costs or externalities (e.g. air pollution) imposed by SOV travel.
Because driving becomes more costly for all travelers, fuel taxes tend to indirectly affect
mode shift, as well as the frequency and duration of trips. These impacts often lead to decreases
in vehicle miles traveled (VMT). VMT reductions, in turn, can positively impact air quality by
reducing emissions. If the primary goal of a pricing strategy is to reduce air pollution, then
taxing fuel can be viewed as a means of pricing the pollution associated with fuel use.
Fuel taxes have long been used in
this country to recover a portion of road
construction and maintenance costs. In
recent years, however, federal and/or state
fuel taxes have increasingly been viewed
as a potential tool for recovering other
costs as well as for reducing VMT and
encouraging improvements in fuel
efficiency. Proposals to tax fuel based on
carbon emissions, to increase taxes to
cover all road costs, or to use high taxes
to discourage driving in general have all
surfaced. In 1993, fuel taxes made up
approximately 23 percent of fuel prices,
but a very small percentage of total car
ownership costs.23 As fuel tax advocates
point out, American gasoline prices are a
mere fraction of those in other
industrialized nations, most notably Japan
and Italy. Countries such as Sweden may
levy several taxes on fuel alone.
There are significant obstacles to increasing fuel taxes to capture more of the social costs
of driving (e.g., congestion and pollution costs). Most estimates suggest that prices would have
to be raised by more than $1 per gallon to significantly influence driving behavior.24 Public
outrage at higher taxes in itself is probably enough to prevent any proposal from getting very far
23 U.S. Bureau of the Census, Statistical Abstract of the United States: 1993. 1993.
24 MacKenzie, James J., Roger C. Dower, and Donald D. T. Chen, The Going Rate: What It Really
Costs to Drive. World Resources Institute, Washington, DC, 1992. Also, Downs, 1992.
Effect of Fuel Taxes on Motorist Behavior
Advocates of higher fuel taxes point to their ability to
levy the costs at the source of the activity. The oil
crises of the 1970s are often pointed to as an
indication of the enormous response of the American
public to radically increased gasoline prices. Some
economists argue, however, that scarcity played more
of a role in that situation than price. While various
estimates for the elasticity of gasoline demand exist
(see later discussion on elasticity),
it is clear that certain factors can
affect a consumer's response to a
change in the cost of fuel. One
such factor, which is crucial to the
success of most transportation
pricing measures, is the availability
of alternative forms of
transportation in the affected
region.
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without a very thorough public education campaign. In addition, border issues can play an
important role, unless the majority of fuel taxes were levied on the federal level. For these
reasons and others, discussion of higher fuel taxes in this country remains just that for the time
being.
Another fuel tax strategy, which could be used as a transportation pricing strategy, is to
reduce existing taxes for "clean" or alternative fuels. In fact, until the year 2000, a 5.4 cent
exemption from federal gasoline taxes exists for fuels containing at least 10 percent ethanol.
Pay-at-the-Pump Charges
Pay-at-the-pump (PATP) charges are distinguished from fuel taxes in that they are
designed to shift the collection of driving-related costs away from the current system of annual
or semi-annual lump-sum payments, to payments made when gasoline is purchased. In most
scenarios, this measure does not add costs, but simply shifts the point of payment in order to
reinforce the perceived relationship between cost and behavior. As noted by EDF economist
Michael Cameron, "the longer the period between the time people drive and the time when they
must pay the fee, the less impact the fee will likely have on people's decision to drive." The
costs shifted to the pump could include insurance premiums, vehicle registration fees, and
emissions testing and inspection/maintenance fees. Some proposals also suggest that a
surcharge be added to more fully recover the costs of road construction and maintenance.
Although this measure has not been implemented, it closely resembles the widespread use of
fuel taxes to cover a portion of such costs. If implemented, however, this type of PATP charge
would factor in the remaining portion of road costs that are currently not paid for through
gasoline taxes. The most salient distinction between PATP fees and simpler fuel taxes is that
PATP charges could replace emissions testing fees and registration fees, or other costs that
drivers must pay, such as automobile insurance.
PATP charges would generally be levied on a per-gallon basis, therefore discouraging
fuel use, VMT and vehicle emissions. Traffic congestion and the associated air quality impacts
are only indirectly affected (depending on the price of the charge) because peak travel and travel
on crowded roadways is not specifically discouraged. Reductions in both congestion and air
pollution are expected, however, as some travel would be reduced in response to the change in
the collection of the various costs of driving. At least initially, higher fuel prices would result in
motorists cutting down on the most unnecessary or lowest value trips. Work trips, which tend to
fall during peak hours, would likely be the last to go. PATP charges are also expected to
encourage shifts to more fuel-efficient engines, because reducing fuel use could result in a
significant amount of savings.
Chapter 3 - Examples of Transportation Pricing Programs
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Estimates of the elasticity of fuel use in relation to fuel costs range from -0.2 to -0.3 in
the short term, and from -0.05 to -0.22 in the long-term.25 Short-term responses to higher fuel
prices will likely be slight decreases in VMT, while the longer term will bring slightly more
reliance on fuel-efficient engines, depending on the magnitude of the price change. (See sidebar
for further explanation of price elasticity.)
Price Elasticity
Elasticity is a measure of the sensitivity of demand relative to price. Elasticity indicates how
consumers will respond if the price of a product changes. Technically, price elasticity
measures the percentage change in demand for a good relative to a one percent change in the
price of that good. Thus, a price elasticity for fuel of -0.02 indicates that if fuel prices increase
by 10 percent, the demand for gasoline would decrease by 2 percent (-2%/10% = -0.02)
Theoretical estimates for PATP charges, factoring in road construction and maintenance
costs, suggest adding an additional 10 cents per gallon fee to cover these costs.26 If insurance
costs were included, the additional fee would rise to 25 cents per gallon.27 Any large-scale
efforts to shift driving costs to pump charges are likely to include insurance reform. States
considering automobile insurance reform, such as Florida and California, have in fact, tended to
be the ones considering PATP scenarios.
In a PATP insurance scenario, drivers would pay a small premium per gallon of gasoline
that would cover the "actual risk associated with driving the distance that a typical car can travel
on a gallon of gas."28 A similar system can be applied based on the number of vehicle miles
traveled (see below). High-risk vehicles or drivers would most likely be required to pay a
registration or licensing surcharge to make up the difference in their insurance premiums. The
process of obtaining insurance would be simplified, and uninsured portions of the population
(close to 30 percent of drivers in some areas) would be significantly (if not entirely) reduced. In
a California proposal, the money would be collected by the state with the tax money it already
collects at the pump.29 The funds would then be distributed to a series of private insurers
proportional to their coverage. Such a program could save many drivers money by reducing
costs for uninsured motorists and would provide incentives to increase fuel efficiency.
25 Deakin, Elizabeth and Greig Harvey, Transportation Pricing Strategies for California: An
Assessment of Congestion. Emission. Energy and Equity Impacts. Technical Report prepared for the
California Air Resources Board, June, 1995.
26 Cameron, Michael, Efficiency and Fairness on the Road: Strategies for Unsnarling Traffic in
Southern California. Environmental Defense Fund, Oakland, CA,1994; also Downs, 1992.
27 Cameron, 1994.
28 Deakin, 1995.
29 Deakin, 1995.
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Furthermore, PATP charges encourage a reduction in VMT because drivers will be more aware
of how much money they actually spend per mile of travel.
One of the greatest barriers to PATP measures are border issues. PATP charges would
require state or large regional participation in order to make all of the necessary institutional
changes. Residents of jurisdictions that have implemented the program would have significant
incentives to cross jurisdictional lines for cheaper gasoline. As a result, implementation on a
larger scale, whether county, state or federal level, could be useful in reducing side effects that
might result around border communities. Although a growing number of states have begun to
consider PATP charges, this type of measure has not yet been implemented. In addition, public
acceptance of any type of gasoline price increase might make a PATP program difficult to
implement. Thus, any such program would need to be augmented with significant public
education efforts.
VMT Fees
Fees based on the number of vehicle miles traveled (VMT fees), which are levied as a
surcharge on every mile of travel, generally fall into one of several categories depending on
where and when they are levied. If the fees are assessed at the pump as additions to the price of
gasoline (assuming that each gallon represents a certain number of miles traveled), they are
viewed as PATP charges. If they are assessed as per-mile tolls for the use of specific facilities,
they fall under roadway pricing. They may also be attached to registration or emissions fees, in
the form of per-mile surcharges that may vary by the emissions class that a vehicle falls into or
measured emissions.
However they are levied, VMT fees promote reductions of both congestion and
pollution. In contrast to measures such as gasoline taxes, where the costs can be reduced with
more efficient engines, the only way to reduce one's costs under this measure is to drive less,
thus reducing emissions and traffic. Although VMT fees can impact both pollution and
congestion, they are likely to have a lesser effect on either than a fee designed specifically to
reduce vehicle emissions or traffic congestion individually. This is primarily because VMT fees
charge a flat fee for every mile driven, whereas a more specialized fee would vary based on the
emissions characteristics of the vehicle, the air quality conditions during the time of travel or the
traffic conditions during the time of travel. The effect of a VMT fee will depend on the size of
the fee, the types of vehicles currently driven, how the program is administered, and the
availability of travel alternatives in a particular area.
Emissions Fees
Emissions fees (often referred to as "smog fees," particularly in California) propose to
internalize the costs of pollution by charging drivers per pound of gaseous emissions they create.
These fees directly affect emissions by encouraging a shift to cleaner burning engines and
reduced use of higher polluting vehicles. A recent study in Southern California reviewed the
Chapter 3 - Examples of Transportation Pricing Programs
23
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possible impacts of emissions fees and concluded that, when combined with other measures,
emissions fees could reduce emissions and congestion significantly. This and other studies
showed emissions fees to be very effective for reducing gaseous emissions.
The use of emissions-based fees has been considered by several states including
California, where smog fees have been repeatedly proposed, and Maryland, where the state
legislature adopted a system of emissions fees in 1994. The Maryland emissions fee plan was
overturned, however, on the grounds that it violated the State's constitution. Thus, although
emissions tests are required and often associated with testing fees in some parts of the U.S.,
charges on actual emissions have not been implemented.
It is also possible to vary other related fees and taxes, including taxes on the purchase of
an automobile (very high in Scandinavian countries and Singapore) or registration fees, based
on the automobile's fuel efficiency, engine type (diesel, gasoline, alternative fuel), engine size
or power, or vehicle age or weight. These types of fees are related to emissions fees and could
affect the types of vehicles purchased depending on how the fees are determined.
Roadway Pricing
Roadway pricing refers to the use of fees on any road for any purpose. As a
transportation pricing strategy, this measure attempts to cover road costs and can serve to reduce
congestion or travel on specific facilities, roadways, or in general regions by implementing fees
that increase the costs of driving in these areas and/or at specific times of the day. The idea is
that drivers will respond by (1) driving during non-peak hours, thus spreading out traffic more
evenly throughout the day; (2) driving on other, less-congested and perhaps underutilized roads;
(3) telecommuting rather than driving to work; or (4) switching to other modes (such as transit,
bicycle, walking, or higher occupancy vehicles). This measure may also be used to fund road
construction and maintenance. Generally, roadway pricing falls into one of three categories.
• Facility pricing, under which fees are assessed for travel on a bridge, tunnel, or
similarly small, but easily controlled segment of a road. Facility pricing may be
easier to implement on a local level than pricing a longer segment of road.
• Road pricing, which is assessed at one or more points (traditionally, toll booths)
along a specific roadway. This pricing may be more effective in reducing VMT
than facility pricing.
• Cordon pricing, under which fees are assessed for travel within a particular area.
Cordon pricing establishes a series of pricing points in a ring around the
congested area, whether it be a central business district or a greater metropolitan
area. Motorists are then charged as they enter the cordoned area.
24
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Congestion pricing is a type of
roadway pricing that refers to the use of
fees for the specific purpose of reducing
congestion. Under a congestion pricing
strategy, the fees for traveling on a
congested transportation facility or area
may vary by location, time, distance
traveled, or vehicle occupancy according
to the level of congestion. During
periods of congestion, or "peak" periods,
the charges will be higher. Travel during
"off-peak" periods (i.e., periods of lesser
or no congestion) will be less expensive
or free.
Roadway pricing, and particularly
congestion pricing, is the market-based
measure that appears to be receiving the
greatest attention in the United States
(particularly as a result of FHWA's
Congestion Pricing Pilot Project, which
has led to a number of studies, proposals
and actual projects). In addition,
international experience provides further insights into these concepts. The city-state of
Singapore introduced a cordon scheme of congestion pricing in the late 1970s that continues to
expand today. In Norway, the three largest cities have used a similar system to raise funds for
transportation projects, and Sweden will be following through with a series of measures to
combat congestion and pollution in the greater Stockholm area.30
Currently, twenty states have roadway pricing in the form of toll roads, bridges or
tunnels with costs averaging between $0.02 and $0.10 per mile.31 Congestion pricing schemes
greatly increase those rates, but drivers have demonstrated a fairly strong willingness-to-pay
when the fees offer some perceived value, such as time savings or improved road conditions.
This is perhaps why congestion pricing is an increasingly popular form of transportation pricing.
Roadway Pricing and Technology
The use of roadway pricing has been greatly facilitated in
recent years by significant advances in technology, which
reduce operational costs, radically improve traffic
movement (by eliminating the need to stop at toll plazas),
and facilitate toll collection and enforcement. The major
innovations include automatic vehicle identification (AVI),
which utilizes vehicle-mounted transponders and roadside
sensors, and automatic toll collection (ATC), which often
uses pre-paid monthly balances to facilitate billing. Such
technology is in the process of being implemented in
Singapore, and is already in place along California's State
Route 91. Opened in December of 1995, the California SR-
91 Project operates on a 10-mile stretch of highly-
congested highway in the Los Angeles metropolitan area
and is heralded as the world's first entirely automated
congestion pricing program (see Appendix A for more
information on this project). This type of technology is an
enormous boost in the practicality, effectiveness, and
public appeal of congestion pricing.
30 U.S. DOT, Federal Highway Administration, Congestion Pricing Notes, (various from 1996).
31 Deakin, 1995.
Chapter 3 - Examples of Transportation Pricing Programs
25
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Example: The California SR-91 Project and
the San Diego 1-15 Express Lanes Project
California SR-91 is the result of a public-private partnership in which a private company sets up,
maintains and operates a stretch of toll road for profit. The California Department of Transportation
(Caltrans), the main public partner, benefits by gaining additional HOV lanes that could not have
been built without private financial support. Early in the development of this project, public support
was exceedingly low, based on objections to the pricing of an historically free roadway. After an
extensive educational campaign, however, public response improved significantly as road users
understood that the tolls would make possible the construction of new capacity, that congestion was
likely to decline, and that existing lanes would not be charged. A similar situation exists with San
Diego's 1-15 Express Lanes Project. Under this project, SOVs may pay for access to underused
HOV lanes. Surveys found significant support for the San Diego measure and a widespread
willingness-to-pay for reductions in travel time. (See Appendix A for more information on these
Modal Subsidies
Modal subsidies involve providing financial support to alternative modes of transit,
including bus, rail, HOV, or alternative fuel vehicle travel. A subsidy represents a situation
where the amount users pay for a given transportation mode is intentionally set at less than the
cost to the supplier of that service. Subsidies are most often used as a means of encouraging the
use of particular transit modes. Providing subsidies to alternative travel modes can serve to
support increased transit options for citizens as well as increase air quality and decrease
congestion.
Subsidies can take a variety of forms. For example, they can involve the general
underwriting of transit costs, selected transit fare discounts, transit matching subsidies, or
vanpool and paratransit subsidies. Subsidies can target specific groups or a general lowering in
price of a given mode of travel for all citizens. Short term subsidies can be effective by
initiating mode shifts that continue once the subsidy is lifted because users find convenient
alternatives to SOV travel.
The private sector can also play a role in providing subsidies. The following are
examples of private sector subsidies that can serve to promote alternative modes of travel:
• Transit pass subsidies (see discussion on the Milwaukee County "Commuter
Check" program);
• Vanpool operating subsidies;
• Rideshare subsidies;
• Parking cash-out; and
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• Improved convenience for selected travel modes (for example, bicycle lockers
might be provided).
As the summary below indicates, employers in Milwaukee have instituted a "Commuter
Check" program to provide employees with subsidies for transit, including bus and vanpool
travel. This program illustrates that subsidies can serve to both encourage alternative modes of
travel and provide a financial benefit for employees of participating businesses.
Example: Milwaukee County "Commuter Check"
Program
Milwaukee County has elected to work with employers to encourage the use of buses and
vanpools. Employers can purchase "Commuter Checks" or vouchers which are given to
employees and can be applied toward the purchase of bus passes or vanpool fees. The cost of
providing the checks is a tax deductible expense for businesses, and the checks are a tax free
benefit for employees. The program has benefited over 2000 employees from 75 area
employers. Employers also benefit by saving money that would be spent on construction and
maintenance of additional parking spaces. (See Appendix A for more information on this
program.)
The Effects of Transportation Pricing Measures on
Travel and Emissions
While market based pricing strategies are gaining viability as transportation control
measures, they are still in their infancy in the United States. As indicated throughout this
chapter, the projects that are being executed are in very early stages of implementation. As a
result, almost no real-world observations of the effectiveness of these measures in reducing
congestion and emissions are available. As these projects are completed and enter their
evaluation stages, this information should be available.
Despite the lack of case specific information, a number of theoretical studies have
attempted to estimate the impacts of transportation pricing measures, particularly in the more
congested, heavily-polluted areas of the country. Various integrated modeling techniques have
been used to make these projections. Researchers have used travel demand analysis models and
demand elasticity estimates to analyze the effectiveness of transportation pricing on travel
behavior, traffic flow, and emissions. In addition, inferences from limited real-world
experiences with transportation pricing and results of stated preference studies have been used
to estimate the benefits of these measures. Table 3-1 provides a brief summary of the estimated
effects of various transportation pricing measures on vehicle travel and vehicle emissions.
Parking pricing has been one of the more popular measures in the U.S., providing more
certain information as to its effectiveness. Several studies have found that people are fairly
Chapter 3 - Examples of Transportation Pricing Programs
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willing to use alternative modes of travel, such as carpooling and transit, as opposed to SOV
trips, in response to higher parking prices. Price elasticities, in terms of SOV trips, are
estimated to range between -0.1 and -0.2, indicating that, for example, a 100 percent increase in
parking prices would result in a 10 to 20 percent reduction in SOV trips. Therefore, raising
parking prices is a fairly effective way to reduce VMT, congestion, and air pollution. The
projects cited in Table 3-1, almost all of which were conducted by employers of more than 100
people, showed significant impacts on SOV use, with reductions ranging from 66 to 81 percent
at a given worksite. Vehicle trips, a similar indicator, also showed considerable reductions. No
emissions information was available for parking pricing, though it is possible to make
projections based on estimated VMT reduction figures for a specific area.
Estimates suggest that VMT will decline by 2 to 2.5 percent when VMT fees are raised
by 10 percent (representing estimated price elasticity between -0.2 and -0.25). Because they do
not encourage a shift to cleaner burning engines (because every car is charged the same rate per
mile), the effects of VMT fees on gaseous emissions are smaller and more indirect than would
be expected from emissions-based fees. The studies discussed in Table 3-1 found that VMT
fees of $0.01 to $0.05 per mile alone would reduce gaseous emissions and VMT by about 4 to
11 percent, while a VMT fee weighted by emissions was estimated to have a significantly
greater impact on emissions, particularly for VOC and NOx.
Congestion fees are similar to VMT fees. However, according to the studies below, they
tend to have lower air quality impacts but a greater ability to reduce congestion. The reduced
impact on emissions is possibly due to the fact that congestion pricing is more likely to shift
travel from congested periods to less congested periods than to have a significant impact on the
total number of trips. Although the study summarized in Table 3-1 estimates very limited
impacts, congestion pricing programs are being widely embraced under FHWA's Congestion
Pricing Pilot Project Program, in part because congestion is of greater concern than emissions in
this program. Thus, several projects are expected to provide concrete results regarding the
effect of congestion pricing in the next few years.
Just as VMT fees are effective at reducing VMT, emissions fees which vary depending
on how much the vehicle pollutes are estimated to be quite effective at reducing pollutant
emissions, though not as effective at reducing congestion or VMT. Estimates show that a 10
percent increase in an emissions fee would be expected to reduce emissions by 5 percent, but
reduce VMT by only 1.5 percent. One of the primary reasons that emissions fees are not likely
to result in a significant VMT effect is because some drivers can substitute a cleaner car to
offset fees. As a result, however, emissions fees are expected to lead to improvements in
vehicle fleet fuel efficiency over the long term because they give people a financial incentive to
buy cleaner cars.
28
Chapter 3 - Examples of Transportation Pricing Programs
-------
Fuel elasticity estimates vary considerably (ranging between -0.05 and -0.2232).33 In the
short term, a driver's response to fuel taxes would be to eliminate unnecessary trips or VMT,
while over the long term, drivers would shift towards cars with improved fuel efficiency with a
smaller change in VMT. The studies summarized in Table 3-1 estimated very small impacts
from fuel taxes on both emissions and VMT.
Modal subsidies have not received significant attention on their own, as they are usually
applied in tandem with other measures. The existence of alternative modes of transportation,
however, can be extremely important in determining the effect of subsidies on the demand for
vehicle travel.
As projections, the studies summarized in Table 3-1 involve a considerable degree of
uncertainty, relying on a number of significant assumptions about a variety of factors ranging
from shifting demographics to behavioral responses. Nonetheless, the findings of these studies
indicate that transportation pricing measures have the potential to offer substantial reductions in
air pollution, greenhouse gases, and traffic congestion.
A companion document, "Guidance on the Use of Market Mechanisms to Reduce
Transportation Emissions" provides guidance on estimating the emissions reductions and travel
demand changes for a specific transportation pricing program.34
32 Deakin, 1995.
33 Fuel elasticity is defined as the percentage change in quantity of gasoline purchased for each
percentage change in gasoline price.
34 EPA and DOT, forthcoming.
Chapter 3 - Examples of Transportation Pricing Programs
29
-------
Table 3-1
Estimated Effects of Transportation Pricing
Measures on Travel Demand and Emissions
(Results From Various Studies)
Category
Strategy
Source
Scenario
Results
Parking Pricing
Employee
parking
fees35-36-37:
Various projects (both
short and long term)
in which parking fees
were raised.
$1.37 to $2.73/vehicle/day
increase in parking fees.
• 12 to 39 percent reductions in VMT to a
worksite
• 66 to 81 percent decrease in SOVs at a
worksite
Differential
fees38:
Various projects in
which SOV parking
rates were raised or
HOV rates were
lowered.
$1.60 to $5 per vehicle/day
forSOVs;
$0 to $2 per vehicle/day for
carpools;
up to $42/month transit
subsidy;
up to $15/month carpool
subsidy.
• 19 to 31 percent reductions in vehicle trips
community wide
35 Surber, Monica; Donald Shoup, and Martin Wachs, "Effects of Ending Employer Paid Parking for Solo Drivers." Transportation Research
Record 957,1994.
36 Williams, Michael E. and Kathleen Petrait, U-Pass: A Model for Transportation Management that Works, Presented at Transportation
Research Board Annual Meeting, January, 1993.
37 U.S. EPA, Office of Policy, Planning, and Evaluation, Guidance on the Use of Market Mechanisms to Reduce Transportation Emissions.
Almost Final Draft, May 30, 1996.
38 U.S. EPA, 1996.
30
Chapter 3 - Examples of Transportation Pricing Programs
-------
Category
Strategy
Source
Scenario
Results
Fuel Taxes
^ 1 * ~t
-------
Table 3-1, continued
Category
Strategy
Source
Scenario
Results
At the Pump
Charges
VMT
fees42,43:
Various studies
estimating results of
VMT fees in West
Coast metropolitan
areas.
$0.01 to $0.05/mile
• 9.3 to 11 percent decreases in VMT
• 8.6 percent decrease in trips; 10 percent
shift to transit
• 4.5 to 8.6 percent decreases in CO
• 4.1 to 9.1 percent decreases in VOCs
• 5 to 8.6 percent decreases in NOx
• 9.4 percent decrease in C02
• 11 percent decrease in PM10
Pay-as-you-
go car
insurance:
Study estimating
results of a national
PATP scheme.
$0.10 to $0.40/gallon
surcharge on gasoline.
• Estimated 32 MMT/yr reduction in carbon
emissions
Roadway
Pricing
Congestion
pricing fees44:
Study of various rates.
$0.05 to $0.30 per mile of
road, depending on factors
such as the level of
congestion, time of day, etc.
• 5 to 10 percent decrease in peak period
VMT
• No effect to 2 percent decrease in NOx
• No effect to 7 percent decrease in VOC
• 2 to 3 percent decrease in PM10
42 Puget Sound Regional Council, 1994.
43 Cameron, Michael, Efficiency and Fairness on the Road: Strategies for Unsnarling Traffic in Southern California. Environmental Defense
Fund. Oakland, CA, 1994.
44 Puget Sound Regional Council, 1994.
32
Chapter 3 - Examples of Transportation Pricing Programs
-------
"" ' • '• Table3-2-. \ •', / . ; ,
< - Summary of Transportation Pricing Projects
Project
Phase
Coverage
Description
Results
Funding
Berkeley TRIP " "
Project r
* „ <- <¦
% ~
A
Implemented
Public parking
lots and
garages
Parking rates raised to
market price
($3.20/day) Free for
H0V-3s.
N/A
City of Berkeley
and University of
California at
Berkeley.
* California SR 91
*¦ .I'*,
Project s
€ " * * *
f
' s
- <<¦-' , <
* - * ' > i i *' <
f *<• » v ^ 4 V*
? f v •Vr -
"
*
Implemented
1995
10-mile stretch
of SR-91 in
Orange
County; two
priced lanes, in
each direction,
were added in
the median of
the existing
highway.
Congestion pricing fees
vary from $.50 to $2.75
per vehicle, depending
on occupancy and level
of congestion. Frequent
Traveler Program gives
users a $0.50 discount
on each trip for a
$15/month fee. Uses
ATC.
Express traffic has increased
and sales of transponders has
exceeded expectations. 20 to
25 percent of the traffic is
made up of HOV-3+.
Private funding.
^California's ;
Parking ^Cash-Out
Program1 -<
~ ~ it *
i ~
^ v* ^ * -
*"~ . * * X
V 1 - H
¦* 4 >%. ^ + t- "V
' ' • •' - *. ...
Implemented
1993
Employers of
50 or more, in
non-attainment
areas, who
subsidize
parking
California state law
requires development of
parking cash-out
programs for all
employers of 50 or
more, located in
nonattainment areas.
N/A
Self-funded by
employers.
33
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
Coalition for Local
Environmental
Solutions and a
Competitive
Economy
(COALESCE)
Emissions Fee and
Coupon Program
Proposal
Southern
California
Per-mile emissions fees
reflecting true emissions
rates of auto. Yearly
coupon towards vehicle
maintenance or
HOV/transit use.
N/A
COALESCE funds.
Dulles Greenway
Project
Implemented
1995
14-mile stretch
of privately
owned and
operated toll
road in
Louden
County,
Virginia
Built to divert traffic
from heavily congested
Rt. 7 and 28. Current
toll is $1.75 for
complete trip ($0,125
per mile). Antennae
placed in pavement
record tolls for ATC.
Traffic volume for the first
three months was 10,500
vehicles/day ~ lower than
originally expected. Volume
is expected to increase as
more commercial drivers
become aware of the road's
benefits.
Toll Road
Investors
partnership II
(TRIP),Virginia
DOT.
Revenues will fund
HOV lane
construction.
Fort Myers/Lee
County, Florida
, Variable Bridge
Toll Project
Study
concluded
1997
Cape Coral
and Sanibel
Bridges (to be
extended to
the MidPoint
Bridge after
completion)
Phase I - Feasibility and
impact studies.
Phase II - off-peak toll
discounts, 33 percent
peak toll increase.
N/A
Local funds will
make up for
potential lost
revenue from
deferred traffic.
Surpluses will fund
other congestion
mitigation projects.
34
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
GlendaleTMA
' •»
Parking •
Management *-
Program
* *
~ * *
Implemented
Glendale,
California
area;
employees of
Nestle USA,
Inc., and
Commonw'lth
Land Title Co.
Parking pricing at $40
to$50/month. Carpools
park free and receive
$3/day subsidy.
N/A
Public-private
partnership.
GO Boulder „
Program -
_ ^ 1 «• "
^
& *
< ~«.
>~ * >> *
t ™+ t * - i
Under study
(completion
expected in
December
1997)
Boulder, CO
metro area
Congestion pricing
feasibility study.
Various strategies,
forecasting impacts,
public outreach.
Project has been highly
successful in soliciting public
input and involvement. Not
yet implemented.
FHWA Pilot
Project, City of
Boulder, and
Colorado DOT
funds.
Katy Frefeway „ * 4
Priority Lajrie 5
PricingProject,
Houston,* T^xas ~
'1 *V ! v». • -
Under study
(completion
expected in
1997)
13-mile stretch
of I-10 in
Harris County
HOV-2 can buy into
HOV-3+ lanes during
peak periods.
N/A
Texas DOT and
Houston Metro
funds. Texas
Transportation
Institute study.
King Coifnty t . *
FlexPassProgram
* ¦"
^ ~ * "V
x * Z.* * " x + w
Implemented
King County,
Washington
Initiatives for employers
to offer employees
transit subsidies,
voucher incentives, and
flexpass commuting
choices.
After two years, the FlexPass
program led to 30 to 175
percent increases in transit use
for a number of employers.
Self-funded by
employers.
35
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
~Maine Turnpike
Authority (MTA)
Implemented
(study)
Maine
Turnpike
Coupons distributed for
discounts on off-peak
tolls during August
1995 and 1996.
Educational efforts.
Travel time shifts by tourists
were modest, however MTA
hopes to take a more
aggressive approach this year.
Maine Turnpike
Authority.
~Milwaukee County
Transit Service
(MCTS) Parking
Cash-Out
Implemented
1991
Milwaukee
metro area
Monthly transit
subsidies up to
$60/month from local
employers. Tax free
benefit for both
employers and
employees.
Project generated $900,000 in
revenues for MCTS.
Approximately 2,000
employees at 75 companies
participate in the program.
Public-private
partnership.
Portland, Oregon
Regional Pricing
Project
Under study
Portland metro
area
Two year congestion
pricing feasibility study.
Extensive public
education.
N/A
Oregon DOT and
Portland METRO
funds.
Puget Sound,
Washington
Study
discontinued
Puget Sound
Region
Peak-period HOV "buy-
in," when SOVs may
pay for access to under-
used HOV lanes.
N/A
Public-private
partnership.
Revenue will fund
additional 200
miles of HOV
lanes.
i
36
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
*San Diego 1-15 -
Express Lanes
.Project • J
' * * ~ «*< '
<* * >¦ - • „
'< 1 ' <" *
*/« ** * ,r- -L-"v
Implemented
1996
I -15 in North
San Diego
SOV and HOV-2 can
buy into H0V-3+ lanes
for a fixed monthly fee;
fees varying with level
of congestion will be
implemented in late
1997. Uses ATC.
May lead to decreases in
congestion. Since other cars
can buy-in to HOV-3+ lanes,
this project may not decrease
SOV VMT greatly.
FHWA Pilot
Project.
Revenue will fund
additional mass
transit in the
corridor.
San Francisco.f
. Oakland Bay ,
Bridge :
• *i ; -¦ : -» -
3 » 1 ¦# '
. "-T-
Expected
to be
implemented
1997
San Francisco
- Oakland Bay
Bridge
$3 peak period toll,
keeping off-peak at
current $1 for SOV and
HOV-2 vehicles
(constitutes 80 percent
of peak traffic). Uses
AVI.
N/A
FHWA Pilot
Project.
Revenue will fund
transit alternatives
and improvements.
.'*So«thern! V 7 c!
California r :
Association of"
Governments
C * * * - " \ v - *Z x -
" ' \ - J-t.
«*;"> V*
r 4 ' ,--i
. " r »•
>: . \ i * i
' - '
Under study
Los Angeles
metro area
Pre-project study of 24
congestion pricing,
VMT, emissions fees,
and other pricing
strategies. Extensive
social
research/outreach.
Coordination between a
number of government
and private agencies and
institutions.
Study found that a number of
strategies can achieve
significant pollution and
congestion decreases,
especially a modest approach
of am/pm peak period
congestion pricing coupled
with emission fees.
FHWA Pilot
Project, SCAG,
and COALESCE
funds.
37
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
Tacoma Narrows
Public-Private
Bridge Project
Under study
Tacoma
Narrows
Bridge
Congestion pricing.
N/A
Public-private
partnership with
Washington DOT.
Tolls will finance
enhancement of
bridge and other
mobility issues in
corridor.
Tappen Zee Bridge
Variable Toll
Project
Under study
Tappen Zee
Bridge, New
York
Congestion pricing
feasibility study.
Various tolls and transit
improvements.
Outreach.
N/A
FHWA Pilot
Project, New York
State Thruway
Authority and New
York DOT funds.
Twin Cities
Congestion Pricing
Study
Under study
Proposed
Highway 212
Study of mechanisms
such as VMT fees and
congestion pricing.
Studying Highway 212
peak-hour fees.
N/A
FHWA Pilot
Project and
Minnesota DOT
funds.
* Washington State
Commute Trip
Reduction taw
Implemented
1991
Washington
State
Employers of 100 or
more persons in
counties with
populations over
150,000 must make
good faith efforts to
reduce SOV/VMT to
the workplace.
By 1995, two thirds of the
sites reduced SOV/VMT; one
third by 15 percent.
Approximately 80 million
VMT were eliminated; C02
emissions decreased by 33,000
tons/year and gas consumption
by 4.5 million gallons/year.
Some state funding
to help localities
design guidelines.
Individual
programs are
privately funded.
38
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
w +
xf
- ' *;
, . ' , International Programs ; „ * •'
Al Lillfe-Paris
Motorway Project
1 ~ » ' 1 ^
* u * ,
* w *
<*• ^ j> 4 ~
* K > «
* „ 4> " ?
f * *
v-, ~
*- j
Implemented
April 1992
A1 from Paris
to Lille (120
miles)
Tolls are 25 percent
higher than normal
during peak periods
(Sunday, 4:30 to 8:30
pm); before and after
peak periods, tolls are
25 percent lower than
normal.
Up to 15 percent of normal
peak Sunday evening traffic
has shifted to off-peak hours.
SANEF (quasi-
commercial
government-owned
toll road operator).
Cambridge,
England Congestion
Pricing Project
* ft ¦> f
Proposal
Inner and
central London
Three year research
project looking at
technology, public
opinion and travel
behavior.
N/A
United Kingdom
DOT.
Hong Kong Road -
PricirigExperimerit
K • \' r " 1 I "t
*• > ^
Implemented
and
discontinued
City of Hong
Kong
Two year experiment
with electronic number
plates and automatic
tolling.
N/A
Government of
Hong Kong.
39
Chapter 3 - Examples of Transportation Pricing Programs
-------
Table 3-2, continued
Project
Phase
Coverage
Description
Results
Funding
Melbourne City
Link, Australia
Under
development
Melbourne
metro area
Will link 3 major
freeways. UsesATC
and traffic management
equipment. Tolls will
vary for passenger and
commercial vehicles.
N/A
Private funding.
Norwegian Toll
Roads
t- - > ~ I
*
Implemented
Bergen: 1986
Oslo: 1990
Trondheim:
1991
Downtown
Trondheim,
Bergen and
Oslo
Toll rings using
advance vehicle
identification (AVI) to
assess fees during peak
hours. 70 percent of
motorists in Oslo and
80 percent in
Trondheim use AVI.
Users are charged as
they cross the ring.
After implementation, traffic
decreased by 10 percent in
Bergen (not taking into
consideration outside factors).
Traffic fell by 4 percent in the
first four months in Oslo, but
has since returned to original
levels. Relatively little impact
on traffic levels in Trondheim.
Overall, experts argue that the
tolls collected are too low to
successfully decreasing traffic
levels in these areas.
Local
governments. Toll
rings are primarily
revenue-generating
schemes.
Randstadt Peak
Charging Proposal,
The Netherlands
< * 1
Proposal
Main arterial
road system in
Randstadt
region
Daily license for travel
within system at
$2.85/day. Fees
assessed between 6 and
10 a.m.
N/A
Dutch government.
40
Chapter 3 - Examples of Transportation Pricing Programs
-------
Project
Phase
Coverage
Description
Results
Funding
K
Singapore Area
LicenseScheme
* S ¦*
* A. f K ^
A * * i ^
~ 1 * 4 ¦* , - '
f * ' *s ~ *e
\ " *
+ '
• ' -\, """* »
£ " \ ^ -/ y
X ^ *¦
V ~ ^ y \ r
- =? * F
Implemented
1975;
Updated
1989
Two square
mile area in
Singapore
(eventually
will cover
entire island)
Cordon pricing during
peak periods: Monday
to Friday morning and
evenings; Saturday
mornings. Daily fees
are approximately $2.00
to enter the zone during
peak periods; monthly
pass available for
approximately $50.
Soon fees will vary with
congestion.
Peak hour vehicle trips into
the city center have decreased
from 23 to 56 percent and
have remained at this level
since the project was updated.
Singaporian
government.
V «* ' y ~
" Stockholm's Dennis
Package
^ * w ~
^ •* <*•< + T
S> " % ^
¦*¦ * ~ ~f
r - _ 1 r
~ * c A
* * „ A * -* * ~
** j-
" * k-*., *•r i'
H *
V * >*
i » *
•f *
t ^^ *
' - .«> . ' - > "
Proposal
Stockholm
metro area
Public transit
improvements, bypass
roads, and road pricing.
Toll ring road in city
with fees at $2.50 per
day or $50 per month.
Eventually will use AVI
and vary fees by time of
day and vehicle
emissions.
N/A
Swedish
government. Goal
is to generate
revenues, 70
percent of which
will be used for
transit
improvements and
30 percent for auto
travel
improvements.
41
-------
Intentionally Blank Page
-------
Chapter 4
Institutional Relationships
Transportation pricing programs often require the cooperation of various public and
private sector entities. Most of the programs that have been implemented thus far in the United
States are highway- or corridor-specific, although parking management strategies are often
implemented on a regional basis. The geographic coverage of programs often dictates the
institutional relationships that must be developed and fostered during the design, development,
testing, implementation, monitoring, evaluation, and enforcement phases of the program, as do
the sources of funding used to finance a project.
The relationships necessary for successful program implementation depend on the type
of program, how that program is initiated, and the manner in which the program is executed
during the implementation and management stages and the legal structure in that area.
Implementing agencies often face institutional barriers as a result of jurisdictional authority
related to program implementation, monitoring, and enforcement. An important aspect of
many of the successful programs is the active solicitation of program partners, both public and
private.
The purpose of this chapter is to review the types of institutional issues that must be
addressed during the various phases of project design and implementation. Often, institutional
issues that arise in the early stages of program development are driven by dynamic and pre-
established relationships among local agencies and can set the stage for the program's outcome
during the implementation and operation phases.
This chapter reviews the relevant institutional issues associated with program initiation,
the selection of a lead agency, and the coordination of effort between multiple agencies and
levels of government in the design, development, and implementation of a successful
transportation pricing program.
Program Initiation
Although economists have promoted the use of market-based incentive programs to
address transportation problems and reduce pollution from mobile sources for some time,
public officials have only recently considered using these approaches. In the case studies
reviewed, there were generally two methods by which market-based incentive programs were
introduced:
(1) The local or state legislature passed laws mandating the program; or
(2) The local transportation and/or air authority developed the program to address
transportation problems related to congestion, air quality, or other issues.
Chapter 4 - Institutional Relationships
43
-------
The method by which a program is introduced sets its tone and influences the institutional
issues that a program may encounter.
Programs initiated at the state legislature usually involve the introduction of new laws
that require regions to develop strategies for addressing transportation problems. State-
mandated programs have the benefit of requiring public agencies and private entities to comply
with the law. Yet, when these laws are developed into programs, the participation of other
agencies, local governments, and private entities is critical for success.
In other cases, the program concept was initiated in the local legislature or regulatory
body in response to a specific transportation need or related issue, such as air quality. For
instance, San Diego 1-15 Express Lanes Project was initiated on the suggestion of a local
legislator to address congestion on the interstate.
Selecting a Lead Agency
As programs are initiated by state-mandated laws or local efforts, the first step is to
identify a lead agency, agencies, or parties to implement and manage the program. In many
cases, a number of different agencies participate throughout the program, and often more than
one agency will lead the program at different stages. In determining which agency should lead a
project, many factors need to be considered, including, but not limited to:
• Jurisdictional lines;
• Level of government or other parties/agencies that would have the best success
in implementing the program;
• The possibility that a new authority might better administer the program; and
• Levels of government that should participate.
In selecting a lead agency, a key question is the agency's authority to conduct the program. The
lead agency will most likely need to have the authority to implement and enforce the program,
collect revenue, and spend funds. If an agency does not have the necessary authority, enabling
legislation may need to be considered, or another agency might be considered to serve as the
lead agency.
The jurisdictional authority of the lead agency should correspond to the scope of the
measure being implemented. For example, a state-mandated program is probably best
implemented by a state-level agency, which can ensure consistent implementation of the
measure across the state. An area-specific measure, on the other hand, might best be developed
and implemented by a local authority who might better understand the specific concerns and
constraints of the area. It is possible to have a state-level agency or a regional-authority
mandate a program in a specific area, such as a nonattainment area. However, more often than
not, the geographic scope of the problem being addressed, such as congestion or air quality in a
nonattainment area or areas, will determine the scope of the measure to be implemented and,
thus, jurisdictional authority of the lead agency.
44
Chapter 4 - Institutional Relationships
-------
Determining the appropriate level of government to lead a program can be a difficult
process, particularly in governmentally-fragmented and decentralized metropolitan areas. Over
the last 35 years, government institutions at the municipal and special district levels have
increased in number, resulting in more government entities managing the same geographic
area. This not only complicates the selection of a lead agency but also increases the number of
institutions that must be considered and included in the decision-making process.
Potential Lead Agencies and
Participating Agencies/Organizations
• State Agencies: The benefit of having a state agency serve as the lead agency is
that it can apply a program across a broad geographic area, often covering a
complete metropolitan area (with exceptions for metropolitan areas that span
more than one state) or an entire state. This helps to ensure that a program is
consistently implemented across different jurisdictions. A second benefit
comes in the state's authority (either legislative or regulatory authority) to
mandate a program. A mandated program might have greater success than a
voluntary program implemented at the local or regional level. A state-level
agency will have limited success implementing a transportation program,
however, if the program is inflexible in its consideration of local concerns. The
Washington Commute Trip Reduction (CTR) program incorporated local
concerns by organizing a task force, which included local government
representatives, business leaders, and citizens, to develop the program
guidelines.
• Local and Regional Agencies or Special Districts: These agencies are often in
touch with local perspectives and can customize a transportation pricing
program to the region. A benefit of the metropolitan planning organization
(MPO) being the lead agency is that they are the agency responsible for
transportation planning and understanding the transportation needs of the
region. Local or regional agencies may be at a disadvantage, however, if they
lack legislative or regulatory authority.
• New Public Entities: The option of creating a new entity to implement, operate,
and manage a program has primarily been discussed in the literature on
transportation pricing programs. A new entity is suggested when existing local
agencies do not have authority over the jurisdiction of the project area. In
actuality, no new entities have been created, but this continues to be an option as
institutional arrangements are explored.
• Private Companies: Using a private company to manage a program resolves
authority issues, in particular with respect to collecting revenues across local
and regional jurisdictions. A state may need to establish a franchise to allow
private entities to manage a portion of an interstate or state road. There may
also be restrictions on the type of funds available for the development and
implementation of certain projects, as some state and federal funds may not be
Chapter 4 - Institutional Relationships
45
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used to finance roads that restrict access. However, there might be public
concern about a private firm seeking to raise revenues and increase profit as
opposed to a state or local governmental agency.
California Private Transportation Corporation's (CPTC)
Role in Transportation Pricing Projects
A private entity, the California Private Transportation Corporation (CPTC), has played an
important (if not crucial) role in two of the case studies:
• Under a partnership with the California Department of Transportation (Caltrans), CPTC
planned, constructed, and runs the California SR 91 Project. It did extensive public
education, outreach, and marketing work, organizing meetings with local legislatures and
community groups to solicit input from and educate the different interest groups about the
projects components and goals.
• Under a partnership with another private entity, United Infrastructure, CPTC is responsible
for the management of the San Diego 1-15 Express Lanes Pricing Project, including such
activities as toll collection, billing, and other day-to-day management duties.
In both cases, the public-private partnership has proven to be beneficial for all involved parties,
however, initially there were concerns about the objectives of CPTC (to raise revenues) in relation
to those of the State of California (to reduce congestion, and maximize non-paying HOV traffic).
According to CPTC, the goals of all the involved parties have been aligned and all groups are
realizing the maximum benefits. (See Appendix A for more information on these projects)
Federal Agencies: Although federal agencies do not have the authority to
develop and implement transportation pricing programs, federal participation
could lead to the designation of a project as a model or pilot program, which
could provide additional funding.
Affected Businesses/Parties: Participation of the affected parties in the initial
stages of a transportation pricing project can help the project avoid pitfalls later
and lends support. Examples of affected parties may including businesses with
a certain number of employees, companies that own parking facilities, gas
stations, and businesses along a priced route.
46
Chapter 4 - Institutional Relationships
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Promoting Coordination Among Multiple Agencies,
Organizations, and Levels of Government
Regardless of which entity serves as the lead agency, a successful program will require
coordination with institutions at multiple levels of government, including state and local
legislators and regulators, as well as state and local industry and citizen groups. (See also
Chapter 5 - Public Involvement and Acceptance.) Involving all potential stakeholders in the
development and implementation of a program and partnering with agencies at multiple levels
of government serves many goals in that it:
• Ensures broader support for the project;
• Facilitates funding;
• Provides access to additional staff to help implement the program; and
• Helps to identify and resolve problems.
Coordination Promotes Support. Establishing strong institutional relationships during
the early stages of a project can help in building support for a program by ensuring that the
needs and concerns of different parties are identified and addressed. The lack of coordination
between different institutional entities can have a devastating impact on a transportation pricing
program.
Coordination Provides Access to Additional Staff. If multiple organizations are
involved, each entity may take responsibility for a distinct aspect of a project, thus distributing
the program resource requirements among staff of multiple agencies. Access to staff within
different agencies or levels of government can be particularly helpful by providing access to
Coordination Between Agencies, Organizations and Government
Promoting Support for Transportation Pricing Projects:
Case Studies
After the Maine Transportation Authority proposed to increase peak-hour tolls on the
turnpike to reduce congestion, the tourism industry pressed the state legislature to prevent toll
increases. Consequently, the program now offers discounts during off-peak hours, but has left
peak-hour tolls unchanged. The unfortunate result of the program was an increase in off-peak
travel and no change in congestion during peak periods.
Chapter 4 - Institutional Relationships
47
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Coordination Between Agencies, Organizations and Government
Promoting Support for Transportation Pricing Projects:
Case Studies, continued
The Washington State (CTR) Law, which requires all affected employers to make a "good
faith" attempt to try to the reduce both the number of employees who commute in single
occupancy vehicles (SOVs) and the total vehicle mile traveled (VMT) by employees, was
successful in developing support among local agencies. Under the CTR program, a task force
composed of county, city, and transit personnel, private employers, state agencies, and citizens,
was formed to develop the guidelines that each local agency would follow to implement and
manage the program. The task force held regular public meetings to receive input. The guidelines
were so well-received by all public agencies that they were approved as written. After completing
the guidelines, the state named a technical assistance team to aid local governments in
implementation. Finally, the task force continues to help the state by making additional
recommendations as the guidelines are tested in practice.
Likewise for the San Diego 1-15 Express Lanes Project, partnerships were formed in the
early stages between Federal, state, and local agencies, leading to a smooth implementation and
transition of responsibilities. Those involved in the
project team included the San Diego Association of
Governments (SANDAG), Caltrans, the Federal
Highway Administration (FHWA), the Federal Transit
Administration (FTA), the California Highway Patrol,
local politicians, and local transit agencies. In the early
stages of program development, the process was open
to all agencies interested in participating. The open
process encouraged participation and helped divide the
responsibilities of program implementation.
Ultimately, program management will be handled by a
private entity. (See Appendix A for more information
of all of these projects).
different agencies with different areas of expertise. It can also aid in the enforcement of a
program and the collection or distribution of funds. Often some activities required under the
transportation pricing program can be conducted at the same time as other enforcement (e.g.,
inspections) or collection (e.g., registration or toll collection) activities.
Coordination Can Identify and Resolve Problems. There is always the potential for
problems associated with any new program, including a transportation pricing program, many of
which will be unique to the specific program and area implementing the program. Coordination
between the various interested parties involved and affected by the proposed pricing program
can help to ensure that potential problems are identified early and resolved in a way that ensures
success of the program.
48
Chapter 4 - Institutional Relationships
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Coordination Between Geographic Areas
Competition between affected rural, urban and metropolitan areas for economic
development is a potential problem that can affect how transportation pricing programs are
developed and implemented. A jurisdiction that might otherwise have been interested in a
transportation pricing program may be apprehensive if it believes that economic
development would be slowed or that existing businesses may relocate to other locations.
In cases where neighboring cities, towns and other urban areas have competing goals, a
regional authority with power over the local jurisdictions might be a better choice as the
lead agency to implement the program and resolve disputes between the local jurisdictions.
Table 4-1 discusses the likely institution(s) for initiating and implementing each major
type of transportation pricing measure and identifies institutions and groups with which the
lead agency should coordinate and develop an institutional relationship to facilitate the
development and implementation of the program. Table 4-2 provides this information for
several specific projects (also discussed in Appendix A).
The California's Parking Cash-Out program is an example of a program that had limited
coordination between agencies and private participants. Initially, the program was well-received
by employers, who could deduct any expenses associated with the program from their State
income tax. However, under the previous Federal tax code, once employers allowed employees
to cash out, all parking subsidies became taxable. As a result, employers lost their incentive to
implement the program. Although all affected employers are required by law to comply with
the cash-out program, the program is designed to be self-enforcing, and many employers are not
actively participating. A recent change to the tax code made in 1997 has resolved this problem
(see the section in chapter 3, "Parking Pricing" and Appendix A for more information).
Problems due to Lack of Coordination:
California's Parking Cash-Out Program
49
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Table 4-1
Potential Lead Agencies and Institutional Relationships for
Various Transportation Pricing Measures
Transportation Pricing
Measure
Possible
Initiating
Agencies
Possible
Lead
Agencies
Potentially Useful
Institutional Relationships
Fuel Taxes/Pay-at-the-Pump Charges
Federal/State
Legislation
State/Regional
Agency
State/local politicians, Fuel industry
regulators and representatives,
Citizen/stakeholder groups.
VMT/Emissions/Use Fees
State/local Legislation,
State/local Regulatory
Body
State/Regional
Agency
State/local politicians, State agencies
(including DOT), Citizen/stakeholder
groups.
Road Tolls/Congestion Pricing
State/local Legislation,
State/local Regulatory
Body
Regional/local
Authority, State
DOT, Private
Company
Regional/local transit authorities, State
DOT, Regional/local politicians,
Citizen/stakeholder groups.
Parking Pricing/ Parking Cash-Out
State/regional/local
Legislation, State/local
Regulatory Body
Regional/local
Authority
Regional/local transit authorities,
Regional/local politicians, Regional/local
companies (workplaces, shopping
centers), Citizen/stakeholder groups.
Transit Subsidies
State/regional/local
Legislation, State/local
Regulatory Body,
Transit Authority
Regional/local
Authority, Transit
Authority
Regional/local transit authorities,
Regional/local politicians, Regional/local
companies (workplaces, shopping
centers), Citizen/stakeholder groups.
ChaDter 4 - Institutional Relationships
-------
/— «V;:j Table4-2 .¦' •<*;i
\.V'^ - / V* .EXAKfl&H&O^
;• TransportationPrigmgProGtRams ; 4 *
Transportation
Pricing Program
Lead
Agency(ies)
OtherInvolved
Agencies/Groups
Institutional Relationships
San Diego 1-15 Express Lanes
Project
sandag
Caltrans, FHWA, FTA,
California Highway Patrol,
local politicians, local
transit agency officials,
CPTC (private firm);
Citizens Advisory
Committee.
All of the agencies were involved in the
project from its onset, and each agency was
assigned specific responsibilities. This
measured ensured that everything got done
and that there were no disagreements over
who had what roles.
California's Parking Cash-Out
Program
California State
Law
CARB
The law is meant to be self enforcing, with
minimal oversight and involvement from
CARB. There were no institutional
relationships associated with this program.
California SR-91 Project
Partnership
between Caltrans
and CPTC
(private firm)
FHWA; FTA; California
Polytechnic State
University; local Chambers
of Commerce, legislatures,
city councils, transportation
organizations, citizens
groups, etc.
The public-private partnership has proven to
be beneficial for the development and
implementation of the program, however
there have been differences in what CPTC
and Caltrans see as the objectives and goals
of the program. Public outreach and
marketing efforts solicited input and
involvement from a wide variety of local and
state agencies in addition to the general
public.
51
Chapter 4 - Institutional Relationships
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Table 4-2, continued
Transportation
Pricing Program
Lead
Agency(ies)
Other Involved
Agencies/Groups
Institutional Relationships
Southern California
Association of Governments
(SCAG) Study
SCAG
Caltrans, SCAQMD,
COALESCE, REACH
Task Force
The involved agencies have had to learn to
work with and trust each other in
experimenting with new ideas and in guiding
the development of the project through a
number of different phases. This preliminary
work should facilitate the development of
institutional relationships with local
governments and agencies and private
interests in the future when the studied
projects are implemented.
GO Boulder Program
City of Boulder
Colorado DOT, key staff
from both the City of
Boulder and other local
governments
The agencies are working together to define
the congestion problems in Boulder, and to
organize and implement innovative public
outreach and involvement activities.
The Dulles Toll Road
Toll Road
Investors
Partnership II
(TRIP) (private
partnership)
The State of Virginia
The public-private partnership made the
development, implementation and
maintenance of the road financially feasible.
The road was the first privately built and
operated highway in modern times in the
United States.
52
Chapter 4 - Institutional Relationships
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Transportation
Pricing Program
Lead
Agency(ies)
OtherInvolved
Agencies/Groups
Institutional Relationships
San Francisco-Oakland Bay
Bridge Project •
Metropolitan
Transportation
Commission
(MTC), Caltrans
Focus groups, community
and media outreach
No institutional barriers were encountered
between MCT and Caltrans, however MTC
learned that it is essential for any
governmental entity proposing congestion
pricing to build a coalition of
non-governmental support groups in the
beginning of the program so the application
has broad-based support.
53
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54
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Chapter 5
Public Involvement and Acceptance
A large part of the success of a project aimed at changing existing patterns and
behaviors, including those related to transportation issues, depends on the level of public
acceptance and support for the project. One common thread running through successful
transportation pricing programs has been an aggressive public education, awareness and
involvement program. An expert from the Hubert Humphrey Institute of Public Affairs goes so
far as to state that "citizen understanding and support will be essential to introducing
transportation pricing in an urban area."45 The ability of planners and developers to recognize
and involve the public in the development and implementation phases of a program is crucial
for the success of a program.
This chapter discusses the role of public involvement in the success of a transportation
pricing program by defining the elements of a successful public education and outreach
program, examining specific initiatives, and reviewing current research in this area. The first
section defines public involvement and discusses the benefits of gaining strong public
involvement and acceptance for a program. The next section identifies and discusses the
various elements of a successful public education and outreach initiative, drawing on the
experience of several initiatives and current research. The third section explores the various
techniques that can be employed to involve the public and gain acceptance for a program.
Finally, this chapter considers methods for measuring the success of a public education and
outreach campaign.
What is Public Involvement and Why Does It
Matter?
Public involvement is two-way
communication between the public and
transportation planners aimed at
incorporating the views, concerns, and
issues of the public in the decision-making
process. A public outreach campaign
might also involve one-way
communication in the form of public
education, public relations, and marketing.
Public education can be a vital component
of public involvement by informing the public of critical issues to ensure that their input is
45 Munnich, Lee, et al, Institutional and Political Issues in Congestion Pricing: New Models for Federal.
State and Local Cooperation in Infrastructure Investment. Hubert Humphrey Institute of Public Affairs,
University of Minnesota, Minneapolis, Minnesota, p. 6.
Public Involvement
Public Acceptance
Education and Outreach
Chapter 5 - Public Involvement and Acceptance
55
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most effective. Public relations and marketing can be used to identify the means of interaction
that work best for a given sub-group of the population, identify the issues of greatest concern,
and influence the public's perception or opinion on a subject and possibly lead to behavioral
changes.
Effective public education and
involvement is important in the
transportation planning process
because it results in decisions and
programs that are generally more
acceptable to the public and therefore,
more easily implemented. People are
more likely to accept a new program or
plan when they understand it and have
had a part in its development and
implementation. In addition, several
laws, regulations, and agencies require
that the public be involved in
transportation planning.
Lessons on Public Acceptance
Based on lessons learned from the
Twin Cities Congestion Pricing Study in
Minneapolis-St. Paul, Minnesota, and other
congestion pricing programs, Lee Munnich of the
Humphrey Institute emphasized a number of key
issues which any congestion pricing program must
address.
• Elected officials' support, not necessarily as
advocates, but as enablers is essential.
The public, including the business
community, environmental organizations
and neighborhood groups, must understand
the proposals and be involved in the process.
Initially, many planners do not
have a clear idea of the kind of public
outreach or education program that
should be implemented in conjunction
with a proposed transportation pricing
program. Determining the most
appropriate and effective methods for
addressing and publicizing the goals of
the pricing project can be difficult. All
public outreach and education
programs should have clearly defined
goals and a strategy to meet them. A
program must also be flexible so that it
can be modified and adapted to address new developments or problems. The following
sections describe a number of factors which must be taken into consideration when developing
and implementing a public outreach and education program. These factors can also be used to
help determine what kind of public education program best compliments a proposed pricing
project. By recognizing and addressing these same factors, planners can better define the goals,
audience and other elements of their pricing program. This in turn will facilitate the selection
of a public education program that will work with the proposed transportation pricing project.
• A great deal of attention must be paid to
marketing and media strategies, involving
the media in the process from the onset and
fostering a positive relationship.
Source: Munnich, Lee, Summary of Proceedings:
FHWA Midwestern Region Congestion Pricing
Workshop. Chicago, EL, 1995.
56
Chapter 5 - Public Involvement and Acceptance
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Elements of a Successful Public Education and
Outreach Campaign
Perhaps the single most important component of a successful public outreach campaign
is credibility, both institutional and personal. The public must trust that their concerns are
being taken seriously and that they have a significant role in the decision-making process. In
addition to credibility, a number of other factors must be taken into consideration when
developing a public involvement and outreach campaign. These include:
• Defining the audience;
• Defining the area of concern;
• Recognizing the present situation;
• Defining the goals of the project;
• Educating all interested and affected parties;
• Involving the public; and
• Anticipating common issues and concerns.
This section discusses these factors which are central to determining the success of a public
involvement and education program.
Define the Audience
It is important that the "public" be correctly defined. The "public" includes any person
or group that is affected by the transportation program (even if they are not aware that they are
affected) as well as any person or group that thinks that they are affected (even if they are not
actually affected). Thus, exactly who represents the stakeholders or the "public" with respect
to a public education and involvement campaign will depend, to a great extent, on the nature
and scope of the program and the area for which it is being developed. The stakeholders may
also vary depending on the phase (such as planning or development) of the decision-making
process.
It is also important to recognize that the "public" is not a single entity with one uniform
opinion. In reality, it consists of a wide variety of persons, each with their own opinions,
needs, wants, and motivations. These individuals come from all walks of life and have varied
levels of education and income. It is essential to recognize these differences and to address
them accordingly because they will influence people's reactions to and concerns about a
proposed transportation pricing project. The public or stakeholders can include:
• Residents of the affected geographic area;
• Non-governmental organizations, such as environmental, health, citizen,
neighborhood, and civic groups;
• Businesses;
• Traditionally under-served communities, including low-income, racial and
ethnic minorities, people with disabilities, the elderly, and youth;
Chapter 5 - Public Involvement and Acceptance
57
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• Transportation professionals and service providers;
• Members of academia;
• Government agencies, including transportation and air agencies; and
• Politicians.
Planners must also recognize that the residents of the immediate community are not the only
people who may be affected and, therefore, need to be informed of the program's goals.
Persons who live outside the metropolitan area but who use the transportation system on a
Example: Twin Cities Congestion Pricing Study
The benefits of soliciting the support of various groups have been realized by a number of
successful transportation pricing programs. Under this program, the Minnesota Department of
Transportation (MNDOT) conducted a feasibility study of different congestion pricing programs,
including a proposal for the construction of a new Highway 212 with peak-hour fees. The project
included a great deal of public outreach efforts to different special interest and other affected
groups. For the Twin Cities Congestion Pricing Study, each group was able to identify specific
benefits from the project:
• Local community and environmental groups viewed transportation pricing as a tool
which could be used to help reduce the probability of future congestion problems as the
region's population growth led to increased urban sprawl and therefore increased traffic
problems.
• Businesses found benefits in the increased transportation efficiency and decreases in
taxes that would result from such a program.
• Community leaders focused on the opportunities that the project provided for improved
transit services.
• Transportation professionals were interested in using transportation pricing as a tool for
managing traffic problems and influencing modal shifts.
• Local elected officials recognized all of the above benefits, as well as the potential for
such a program to increase revenues while, at the same time, improving the efficiency of
land and energy usage.
Source: Munnich, Lee, et al. p. 3.
semi-regular to regular basis for commuting or other travel purposes should also be included in
the definition of the "public." For a public outreach campaign to be successful, it must be able
to connect with all of the affected groups and integrate their concerns, needs and wants into the
program.
Businesses: The support of and leadership from the business community can be
extremely important for the success of a transportation pricing program. Businesses
tend to be concerned about issues related to the movement of goods, access to delivery
58
Chapter 5 - Public Involvement and Acceptance
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and services, accessibility to and from other suburban-based operations, access to
skilled labor, and reducing the commuting time for employees. The planners must,
therefore, convince businesses that the proposed mechanisms will not adversely affect
business and that the changes will reduce current traffic problems, such as reducing the
costs of time delays. In the past, business leaders have generally favored transportation
programs and funding that will increase the efficiency and reliability of travel on the
area's highways and transit system, and contribute to the area's economic productivity.
Community Groups: Groups such as environmental organizations, neighborhood
groups and transit advocates, are another public sector whose support must be gained
for a transportation pricing project to be successfully adopted. At the local level, these
organizations are concerned with improving traffic problems, reducing pollution,
increasing the accessibility of public transit for all population groups, and improving
community vitality and the overall quality of life. If planners can show them that these
ends can be achieved through the means of a market-based transportation program, they
will most likely be able to gain broad-based local community support.
Government Officials: The leadership and support of local elected governmental
officials and their staff are also necessary for a transportation pricing program to move
forward. Despite the uncertainty surrounding such mechanisms, Lee Munnich of the
Humphrey Institute of Public Affairs found that state and local officials from many
government agencies tend to be interested in, and occasionally strong supporters of,
transportation pricing programs.46 Senator Sandra Pappas, a political advocate of
transportation pricing who has been directly involved in the Twin Cities Congestion
Pricing Study, stressed the need for "coalition building of legislators" and broad-based
political support. At the Federal Highway Administration's (FHWA's) Chicago
Workshop, she stated that, "while it is important to have the support of an elected
official, congestion pricing needs more than one champion."47
Define the Area of Concern
As part of identifying the full audience for a public outreach campaign, it is essential to
define the geographic area that will be affected. As with defining the public, planners should
not ignore any sectors of the population who might be affected by these proposed changes. It is
essential to look not only at the metropolitan area which will be directly affected, but also at
suburban or other adjoining areas whose traffic and residential patterns could be affected by
changes in transportation policy. These parameters will help to shape both the audience and
the definition of the public.
46 Munnich, Lee, et al, p. 6.
47 Midwestern Region Congestion Pricing Workshop: Summary of Proceedings, Developing Political
and Public Support, Chicago, IL, May, 1996, Hubert H. Humphrey Institute of Public Affairs web site:
http://www.hhh.umd.edu/Centers/SLP/Conpric/chicago.htm.
Chapter 5 - Public Involvement and Acceptance
59
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Recognizing the Present Situation
For a transportation pricing program to be successful, it has to be compatible with the
current transportation structure. This includes infrastructure (e.g., the current roadways,
bridges and tunnels), availability of public transit, any transportation pricing programs currently
in effect, and the attitude of the public towards the status quo. Planners must recognize the
limitations that the present structure would place on certain program possibilities and be able to
identify those sections where transportation pricing mechanisms could be successfully
implemented.
Define the Goal of the
Outreach Effort
Public education and outreach programs will differ considerably from place to place as
well as over the life of a project. The aim of the education and outreach program will depend
on several factors:
• The ultimate goals and scope of the program;
• How the public is defined (i.e., who is the intended audience - this may vary for
each activity under the outreach program);
• The stage of the project (e.g, scoping, planning, development or
implementation); and
• To what extent the public is already a participant in the overall process.
In some cases, planners may be more concerned with keeping the public informed of
developments through education and outreach efforts. Other projects may rely heavily on the
use of education and public involvement to change public opinion on certain issues or promote
the acceptance of controversial solutions. Planners might also want the public to be actively
involved in the development of goals and criteria, and the design and implementation of the
program, and therefore might want to solicit feedback or input through more interactive
approaches.
Educate the Interested Parties
Define the Problems with the Current Transportation System
Before solutions can be developed to deal with access problems affecting an area,
current and possible future concerns must first be clearly identified and defined. For people to
be willing to accept changes in their behavior and in the pricing associated with travel, they
must first be aware that problems exist within the present system. The problems associated
with traffic, congestion and air pollution tend to be regional, and may differ considerably
between metropolitan areas. In some areas, citizens may believe that the present transportation
system is adequate or, when viewed in relation to other urban areas, believe that traffic and air
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Chapter 5 - Public Involvement and Acceptance
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quality are not major issues. Other areas may face major deficiencies in air quality, the current
transportation system, or increased levels of traffic. It is also important to:
• Identify how affected interest groups view the current transportation structure;
• Determine the major issues which a proposed program would need to address;
and
• Identify all barriers to the implementation of a proposed program.
This information may help to identify people's willingness to accept changes in the
transportation system and potential problems that might arise in the future with implementing
new programs.
Explain the New Policy or Program and How it Addresses Specific
Problems or Concerns
The reasons for pursuing a transportation pricing program over other available options
must be made clear to all segments of the public. Judson Bryant, a citizen activist from
Houston, Texas, stressed the need for transportation pricing advocates to "define and
thoroughly explain the overall benefits of [transportation] pricing to the public and the press."48
The potential benefits of many transportation pricing programs are not widely understood
because these techniques are relatively new and have not been widely implemented. As a
result, planners will need to educate people on the true costs of transportation and the benefits
of a market-based method. One approach is to explain market-based pricing mechanisms using
a familiar context to illustrate that these methods are currently used to determine the prices of a
number of goods and services. Examples
include long distance telephone service,
whose fees vary depending on the time of
day, and airline ticket prices, which vary
depending on when the ticket was
purchased and the time of day, the day of
the week, and the time of year.
The goals of any new transportation
pricing program must be clearly defined and
planners should demonstrate how the
proposed changes will specifically address
those problems that citizens and all other
affected parties view as important. In
addition, the relationship between the
transportation pricing program and any other programs currently in effect must be established.
For example, it may be necessary to consider and explain how the new pricing program will
mesh with the scope and level of tolls currently collected, how the new program will affect the
availability of alternate modes of transportation or whether there is enough infrastructure
Example: Twin Cities Congestion
Pricing Study
In the Twin Cities Congestion Pricing Study,
the Metropolitan Council, Citizens League and
other task forces published newsletters featuring
articles and studies explaining the concepts of
market-based transportation policies and
advocating their benefits. These publications
helped educate the public, shape the views of
policy makers, and inform interested parties on
the issues.
48 Midwestern Region Congestion Pricing Workshop: Summary of Proceedings, Developing Political
and Public Support, p. 7.
Chapter 5 - Public Involvement and Acceptance
61
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available to handle the increased demand for alternatives. The level of acceptance for a new
technique, policy, or program will depend greatly on how well it addresses current problems, to
what extent it makes use of the available infrastructure, and how it works with programs
already in place. The proposed use or return of any funds collected under the transportation
pricing program should also be detailed so the public understands exactly how and where its
money is being spent. By educating the people about a project, planners can clear up a great
deal of uncertainty and the public will tend to be more receptive to the approach.
Involve the Public in the
Decision-Making Process
Transportation planners or other agencies, such as air quality management agencies,
looking at the use of transportation pricing measures, should, whenever possible, involve all
segments of the public in the development and decision-making processes. It is appropriate to
involve the public in the very initial stages of planning and development of a transportation
pricing project. Structured public involvement and input will result in improved decisions that
take into account the concerns of diverse interests, produce decisions that are generally more
acceptable and therefore more easily implemented, and improve relations between the public
and the transportation agency. Involving the public in the planning process of a transportation
pricing program will help to clarify the public's concerns for planners and help to avoid delays
during implementation.
Anticipate Common Issues
and Concerns
Planners must be able to anticipate concerns that the public may have concerning new
transportation policies and be prepared to address them directly. There are several common
issues that are likely to arise with any transportation pricing program, regardless of the
metropolitan area or region. This section highlights several common issues and concerns as
identified in three recent studies examining the reaction of different groups to different
transportation pricing mechanisms. The three studies include:
• A study on public perceptions of various transportation pricing strategies
conducted for the California Air Resources Board.49 This study involved over
100 individuals on eight focus groups held in four different metropolitan areas.
49 Deakin, Elizabeth and Greig Harvey, Transportation Pricing Strategies for California: An
Assessment of Congestion. Emission. Energy and Equity Impacts, Technical Report prepared for the
California Air Resources Board, June, 1995, p. 10-2.
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• A case study on the pricing program for the San Francisco-Oakland Bay Bridge
Project.50
• A citizen jury created to evaluate and comment on traffic congestion pricing in
the Twin Cities Congestion Pricing Study.51
Issue: ''Roads should be free''
People in general often feel that an implied or specific covenant exists that roads should
be free, because they are already paid for through gasoline and other taxes, and that if tolls are
being collected, they should be removed once construction costs have been repaid. Members
of all three study groups believed that other techniques should be able to decrease congestion
problems without making people pay to travel. To address this issue, planners need to educate
people on the full costs of vehicle transportation, illustrate the inefficiencies of cost vs. use
inherent in the current system, and demonstrate that transportation pricing is the best approach
for correcting these problems.
Issue: '' The public should vote for any new fees'1
The public may generally believe that any increases in taxes or fees, as well as the
allocation of any collected revenues, should be decided on by the voters, not by elected
officials. It may be possible to provide the public the opportunity to vote on the design of a
transportation pricing program. Alternatively, planners could look for other methods for
obtaining and incorporating the public's opinions into program decisions.
Issue: "There are inadequate alternatives to single-occupancy vehicles"
Few people believe that adequate alternatives to commuting by single occupant vehicles
(SOVs) are available. This issue may be addressed by the transportation pricing program by
increasing awareness of the current alternatives to single-occupancy vehicle travel, and by
making additional funds available to increase the availability of transit and other travel
alternatives.
Issue: "These policies benefit the rich at the expense of the poor and middle class"
Pricing proposals are often seen as disproportionately benefiting the wealthy, who can
afford to pay for special services, at the expense of the poor and middle class. To address this
50 Dittmar, Hank, Karen Frick, and David Tannehill, "Institutional and Political Challenges in
Implementing Congestion Pricing: Case Study of the San Francisco Bay Area," Curbing Gridlock: Peak
Period Fees to Relieve Traffic Congestion. National Academy Press, Washington D.C. Special Report
242, Volume 2, 1994: pp. 300-317.
51 Van Hattum, David; Sether, Laura. Citizen Jury on Traffic Congestion Pricing. Saint Paul.
Minnesota June 6-10. 1996. Context. Hubert H. Humphrey Institute for Public Affairs web site.
http://www.hhh.umn.edu/Centers/SLP/Conpric/citjur.htm.
Chapter 5 - Public Involvement and Acceptance 63
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concern, planners need to pay special attention to potential inequities of all transportation
decisions and educate the public on how a specific transportation pricing strategy would also
benefit the poor, disadvantaged, other under-represented group as well as the middle class. For
example, by offering access to special uncongested lanes for a fee, some drivers will opt to pay
for the use of those lanes. This will help to reduce congestion levels on the normal lanes,
thereby indirectly benefiting all drivers who either choose not to, or are not able to buy into the
special lanes.
Transportation pricing programs can remove or mitigate the inequity found in the
current transportation system, especially if the fees collected through the program replace
revenue generated in other ways. For example, fuel taxes are a more equitable way of paying
for road construction and maintenance than a general sales tax. People who pay a fuel tax will
be certainly drive on roads, and therefore are paying for road use. They will pay more the more
they drive. In contrast, if a general sales tax is used to pay for roads, a person must pay them
regardless of whether that person owns a car. Proponents of a planned transportation pricing
program need to think about whether the program will mitigate current inequities, and if so,
inform the public of the benefits. Planners could also tailor the program to directly benefit
underprivileged groups to counteract any inequity brought about by the program itself.
Issue: "Certain fees might be okay if they address specific problems and improve
transportation efficiency "
Although people are rarely enthusiastic about paying more for goods or services, several
studies have found that people are often more open to such suggestions when it can be shown
that such increases would most likely lead to decreases in undesirable factors. In general, the
participants of the focus groups in California were willing to consider paying higher
transportation prices if they could be assured that the funds raised would be devoted to
improving transportation efficiency, and that the persons administering these funds would be
accountable to the public. In relation to congestion pricing or other market-based pricing
mechanisms, participants said that, on occasion, they would be willing to pay a fee during peak
periods to avoid congestion, however, very few people stated that they would be willing to pay
such a fee on a regular basis, as part of their daily commute.
An increase in fuel taxes was the strategy most widely accepted by the California focus
group. The focus group and other recent studies suggest that people are more willing to
support transportation pricing strategies if they are familiar.
There was also consistent agreement among focus group members that any revenues
generated from a transportation pricing program should be earmarked for improvements in
alternative modes of transportation, especially transit systems. Thus, if planners take into
account how the public would like to see the additional funds spent and provide adequate
assurances regarding the use of these funds, the public is likely to be more willing to accept a
transportation pricing policy.
Issue: "How will fees and fuel taxes affect driving behavior and emissions?"
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People will often have a difficult time seeing the connection between fuel consumption
and traffic conditions or emissions levels. People are also likely to have difficulty
understanding how some transportation pricing strategies would achieve their goals. For
example, participants in the California focus groups did not think vehicle emissions reduction
fees would be a plausible or efficient mechanism for reducing congestion and improving air
quality. Some participants thought that an at the pump gasoline tax could, in the short run,
alter drivers behavior. Most members of the focus groups, however, believed that an increase
in the price of gasoline would have to be significant, upwards of fifty cents a gallon, to have
any noticeable impact on consumption. Overall, the focus group members believed that at the
pump charges could be an effective tool to increase revenues, but that they would not be an
effective instrument in reducing levels of congestion, emissions, and improving air quality.
Although the public generally has difficulties seeing the connection between
transportation pricing measures and decreased levels of congestion and pollution, they tend to
have a basic understanding of some issues (e.g, that appropriate pricing measures must be
applied to affect the behavior of targeted groups). Planners must recognize and build upon
these basic understandings, engaging different interest groups in discussions to clarify the
objectives of transportation pricing programs, and identifying and communicating the potential
impacts any program might have on the current transportation structure. This will give the
people the necessary tools to reach informed conclusions about the different transportation
pricing mechanisms. Focus groups or community meetings can provide a forum where the
public can articulate their views and perspectives to planners and decision makers.
Issue: "Such a program is unnecessary and/or would not be cost-effective"
The reactions of the study participants towards transportation pricing policies varied
widely; those persons who lived in areas which tended to be highly congested with poor air
quality thought the transportation pricing policies might possibly be effective, while those
living in areas with only slight congestion and relatively better air quality thought such policies
had little importance.
Given the current state of the technology and the levels of enforcement and surveillance
that would be necessary to implement some transportation pricing programs, the public may
believe that such a program would not be cost-effective or feasible. Although opinions will
differ between metropolitan regions, the participants in the Twin Cities Congestion Pricing
Study's "citizens jury" suggested that planners would "need to quantify the monetary benefits
of congestion relief under a [congestion] pricing scenario relative to imposition of a gas tax
increase or a mileage-based tax" in order for people to accept the program.
Chapter 5 - Public Involvement and Acceptance
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A Successful Public Involvement Program:
• Defines the audience and the area of concern;
• Recognizes and addresses current issues and
concerns;
• Clearly defines the goals of the project;
• Educates all interested and affected parties;
• Involves the public in the decision-making
process;
• Incorporates public feedback; and
• Anticipates and addresses common issues and concerns.
Techniques for Effective Public Education and
Involvement
Planners should seek out and make use of a variety of tools to educate and inform
different interest groups of the program's goals and developments. This section identifies a
number of different techniques that have been used by planners to inform and educate the
public. These techniques are broken into two general categories: (1) techniques primarily
intended to educate, inform, or persuade those affected by the program; and (2) techniques
designed to actively involve the public in the decision-making process. It is important to
realize, however, that some forums used to educate and inform people can also be used to
receive feedback, and many techniques used to research the opinions or obtain input from
different interest groups also serve to educate. In addition to the information provided here,
planners might also consult the U.S. Department of Transportation's Public Involvement for
Transportation Decision Making or the Hubert H. Humphrey Institute for Public Affairs
website.52'53
Education and Outreach
The availability of substantial and accurate and relevant information enhances peoples'
understanding of a project or a plan and encourages more people to participate in the planning
and decision-making process. In addition, well-informed individuals bring issues and concerns
to planners that are thoughtful and insightful, and that often lead to better decisions by those
implementing the program.
52 U.S. Department of Transportation, Public Involvement Techniques for Transportation Decision
Making. Federal Highway Administration; Federal Transit Authority, Pub.#FHWA-PD-96-31; HEP-
30/9-96(4M)QE, September 1996.
53 Hubert H. Humphrey Institute of Public Affairs web site:
http://www.hhh.umd.edu/Centers/SLP/Conpric/conpric.htm.
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Written Informational Materials
Written materials are one of the best
techniques for educating your audience and
providing detailed information on a
transportation pricing plan or program.
Examples of written materials include:
• Fact Sheets or Brochures
• Newsletters
• Public Notices
• Letters to Specific Individuals or
Organizations
• Surveys
Providing written materials allows planners to
deliver a uniform message to all stakeholders
and also helps to alleviate the spread of
misinformation that can create a barrier to
successful implementation of a transportation
pricing project. Written materials should be
written in simple language and format and in
appropriate languages to ensure that all affected
individuals can understand the information.
Graphics should be used to enhance any written
materials distributed to the public. Charts,
graphs and other illustrations can be helpful in
describing the organization and goals of a
program, emphasizing key concepts and points,
or showing expected changes and benefits to the
present transportation system.
In addition, materials targeted at a
specific group of stakeholders that explain how
a program would benefit, impact or address the
special needs of their constituency can also be
beneficial. By narrowing the audience, planners
can address, in detail, those issues that are most
relevant to special interest groups or their
community as a whole. When used in
conjunction with uniform messages, such
slightly different, targeted messages can
contribute to a program's success.
Example: California SR 91
Project
The California Private Transportation
Corporation (CPTC) conducted an extensive
public education and involvement campaign
for the congestion pricing project on
California SR-91. The project consists of
tolls on four new express lanes, opened in
December 1995, which vary by congestion
level and vehicle
occupancy; no tolls on
existing lanes (see
appendix for more
information). The tolls are
assessed with the use of
transponders mounted in
the cars. Six weeks prior to the projects'
implementation, the CPTC undertook a
massive media campaign, which included
direct mailings to residents, radio
announcements, billboards and print
advertisements. These efforts helped to
keep the public informed of events, educate
them on the issues and benefits associated
with the proposed
project and gain their
support for the project.
The California SR 91
Project also held
public meetings as part of their public
outreach program. Significant marketing
and outreach efforts were made both to local
governments, including Chambers of
Commerce, and citizen organizations as
early as two years prior to the adoption of
the program. These parties were invited to
and hosted a series of presentations on the
project throughout its development stage.
The primary goals of these meetings were to
assess the knowledge and perceptions of
affected tax payers on the issue of toll roads
and to educate them on the benefits of the
SR-91 project.
Chapter 5 - Public Involvement and Acceptance 67
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Mass Media
Forms of mass media, such as radio, television and print, have proven to be very
influential in educating and informing the general public. Through the publication of press
releases or purchase of air time on local television and radio stations, planners can reach out to
a wide base of people. Planners should concentrate on the following when dealing with the
media:
Develop a good relationship early on;
Maintain open and honest communications; and
Always have useful facts available.
fSSz* Example:
0 0 u1,?"-"' GO Boulder Project
The City of Boulder and Colorado DOT are working
together to conduct a study on the feasibility of
congestion pricing in the metropolitan area. The
Congestion Relief Study, which is part of the GO
Boulder Project is expected to be completed in
December, 1997. A combination of several public
outreach strategies and techniques are being used in
this program to involve the citizens of the Boulder
region in resolving issues related to traffic congestion.
In addition to general forms of public education, a large
number of neighborhood meetings have been held
throughout the affected area, and local residents have
been polled on their opinions. These techniques are
being used to create a foundation of public awareness
and support and to gather continuous public feedback.
In addition, the City is proposing to leverage existing
regional opportunities, such as the Boulder County
Consortium of Cities and the Boulder County Health
Communities Initiative, to further engage neighborhood
communities in discussions of regional transportation
problems and potential solutions.
Source: 1995 Listserv Discussions. Boulder, CO—
Congestion Relief Study Update. Hubert H.
Humphrey Institute of Public Affairs.
www.hhh.umn.edu/Centers/SLP/Conpric/1995.htm
Of the different types of media,
the press is one of the most influential
and visible to the general public. It is
important to develop a good relationship
with the press early on in a project's
development. Due to the controversial
nature of transportation pricing policies,
the press may initially be hostile to the
proposed policy. If planners have "the
facts" available, and deal honestly and
openly with the media and other groups
which raise concerns about the program,
the support of such groups should not be
difficult to secure.54 Not only would
such a relationship help to guard against
the release of biased or false
information about the program, but it
can also help to ensure that the major
concerns of all potentially affected
parties are addressed. If the support of
the press and other forms of media can
be secured, the planners will have an
influential tool with which they can
inform and educate a broad base of
people on all aspects of a transportation
pricing project.
S4 Munnich, Lee et al., p. 7.
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Public Forums
In addition to keeping the different interest groups informed through the use of
informational materials and mass media, it is also essential to connect with groups on a more
personal level. Public forums, such as transportation fairs, open houses, public and
neighborhood meetings, and public hearings, provide the opportunity for planners to speak
directly to the persons potentially affected by changes in transportation patterns. These types of
activities allow the public to learn about the project and ask questions. Public forums also
provide an avenue through which planners can collect a great deal of uncensored feedback,
both positive and negative, on the proposed changes. By soliciting input through public
meetings and other forums, and incorporating such feedback into a proposed project,
developers can help to ensure the successful adoption and implementation of a transportation
pricing program.
Obtaining Public Input
This section discusses some techniques available, in addition to public meetings, for
involving the public and obtaining their input. As discussed earlier, involving people in the
decision-making process increases the chances of successfully implementing a transportation
pricing project.
Citizen surveys
Citizen surveys can be a helpful tool for planners to gain a better understanding of what
people think about a proposed transportation pricing project and what the citizens think are the
primary issues of concern with respect to implementing such a project. In using surveys, it is
important to remember that the information received will be more useful if the citizens have a
better understanding of the current situation and the proposed project. Thus, surveys most
often will be combined with some sort of educational technique, such as enclosing written
informational materials or distributing the survey to attendees at public meetings. It is also
important to recognize, however, that surveys are subject to bias, depending on the selection of
participants, the educational materials distributed, how the questions are framed, and the
overall aim of the survey.
Focus Groups
Focus groups provide an environment in
which planners and group members can focus
on specific issues of concern. As a result, focus
groups are often used to identify specific issues
with respect to the development or
implementation of a program or to educate the
public on more detailed or technical topics. For
example, the GO Boulder project is working to
The Family Budget Trial
The GO-Boulder Project has embarked on
an innovative case-study program called the
Family Budget Trial. Under this program,
six households in the Boulder area were
selected to work with a "personal trainer."
The trainer works together with the family
to calculate the present costs of travel
incurred by the family and to estimate how
these costs would change under different
transportation pricing scenarios.
Chapter 5 - Public Involvement and Acceptance
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educate the citizens and other affected parties on the more technical issues associated with
transportation pricing strategies, namely how market-based techniques can affect driver
behavior, traffic flow, and the environment through a combination of small focus groups and
specific case studies.55 Planners hope to use the results of the case study program (see sidebar)
to directly educate the citizens on the impacts of transportation pricing and illustrate how travel
behavior can be altered by using market-based approaches to address transportation problems.
Task Forces
Task forces and citizen or civic advisory committees provide a formal opportunity to
bring together representatives from the many stakeholder groups affected by a transportation
pricing program to identify, discuss, and resolve issues regarding the design, development,
implementation, and operation of such a program. Task forces and similar groups have been
used successfully in many situations, including a variety of transportation issues.
Example: Washington Commute Trip Reduction Task Force
The State of Washington solicited a great deal of public input when it was developing the
framework for its Commute Trip Reduction (CTR) Law in 1991 (see appendix for more
information). The state relied heavily on the input from a 22-member task force, made up
of County, City, and Transit Agency personnel, private employers, State agencies and
citizens at large, all appointed by the Governor of Washington. This task force was
responsible for the guidelines of the program and played an important role their
implementation. The task force held meetings with City Chambers of Commerce and
employer groups, set up focus groups for citizens and employers, and held forums where
the issues could be discussed with affected parties. The task force used this input to
formulate guidelines for a model local ordinance, from which local governments could
mold their individual programs. They were so successful in integrating the public's
feedback into their proposed guidelines that almost every local
government adopted the model with few changes. Now that the
program has been successfully implemented, the role of the task force
has changed. At this time, they are working in a review capacity,
making recommendations to the State legislature on guidelines which
are not working or that need to be amended as well as proposing
changes which should be made.
In addition to the success of the Commute Trip Reduction (CTR) Task Force in Washington
state (see sidebar), the City of Boulder has also set up a task force and other interactive
community groups to address the issues and concerns associated with its proposed
transportation pricing program. To date, the City of Boulder has set up over 45 focus groups
and formed a Transportation Advisory Board, made up of representatives from a variety of
55 Midwestern Region Congestion Pricing Workshop, Boulder Project.
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stakeholder groups.56 The goal of these efforts is to bring together public officials, private
citizens, businesses and other groups to discuss difficult and controversial issues, build
consensus between otherwise disparate groups, and reach compromises on appropriate
solutions and approaches.
Reporting Back to the Public
Planners should report back to the public on a regular basis to keep them informed of
new developments, changes in plans, and ultimately the end result of the program. The Task
Force created to develop the Washington State CTR Law was particularly successful in
achieving this goal. Not only were people informed of changes being made to the guidelines,
but their feedback was solicited after the law was passed and is being integrated into
improvements to the current guidelines.
In addition to using a variety of approaches to involve the public, the GO Boulder
Project, in Boulder, Colorado also published "A Cost of Travel Report" at the beginning of
1996, to help keep people informed on the development of the project. This report, which
included information collected from a number of community meetings and focus groups held
throughout the development phase of the project, also helped to assure the public that their
input was valued and being taken into consideration.
Utilizing Coalitions
and Partnerships
In addition to working with the public to gain broad-based support, developing a
coalition of community and government leaders can help ensure a project's successful
development and implementation. As Lee Munnich advises, a coalition should, at a minimum,
include the major institutional advocates from three areas: transportation policy, business, and
community organizations.57 Task forces, initially formed to obtain public input and
involvement, may lead to the building of new consensus between groups that have traditionally
had diverse interests and different objectives.
In addition to coalitions between local interest groups, existing coalitions and
partnerships between like organizations should be targeted. Transportation organizations, such
as the State DOTs, metropolitan planning organizations (MPO), and other authorities, are more
likely to support transportation pricing mechanisms if the revenues realized from such
programs could be used to help finance the improvement of current roads and transit routes.
Air quality and other environmental offices and organizations should be targeted due to the
environmental benefits derived from decreased levels of travel. Organizing and involving
various stakeholder organizations in the program's technical, financial and institutional issues
56 1995 Listserv Discussions, Boulder. CO—Congestion Relief Study Update.
57 Munnich, Lee et al., p. 5.
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as early as possible will help ensure that all parties understand the potential benefits and pitfalls
associated with the program. Chapter 4 provides a more in-depth discussion of the important
role of institutional relationships.
Evaluating the Success of the Public Outreach and
Involvement Effort
An important component of a public education and involvement campaign that is often
neglected is the evaluation of the success of the campaign. It is important to decide upon the
structure of the evaluation component of a public outreach and education program before the
program is undertaken. One should also plan to evaluate the public involvement effort
throughout the process and to make adjustments as necessary to improve the public outreach
campaign. These actions will help establish a baseline by which to measure the success of the
program.
There are two key elements to evaluating a public outreach campaign:
(1) Defining the success criteria; and
(2) Building in milestones during the public involvement process to review the
status of the public outreach and involvement activities against the objectives of
the process and the success criteria.
By building in evaluation components into a public education and involvement plan,
transportation planners can determine how successful the program has been and make any
adjustments that might be necessary to improve the program.
Approaches for evaluating a public outreach and involvement effort include:
• Obtaining feedback from the people on their satisfaction with the decision-
making process and their understanding of and involvement in that process;
• Documenting how the participants influenced the decision(s), highlighting areas
where public input changed the final decision;
• Repeating some of the steps undertaken initially to define the audience and
issues to determine if the outreach and involvement program is effectively
reaching the full audience and addressing all of the relevant issues;
• Summarizing the lessons learned and providing feedback to participants that
demonstrates what input was received and how it was used; and
• Conducting before and after surveys to assess changes in public attitudes toward
the transportation pricing initiative.
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Public input can be obtained through a number of means including mail-in responses
distributed through newsletters, and evaluation forms completed by participants of focus
groups, public meetings, and peer review panels. The amount and scope of feedback obtained
will depend on the nature and/or structure of the evaluation form used.
Conclusion
In general, people are wary of any new techniques or mechanisms that will claim to
reduce inefficiencies through unfamiliar practices. How people ultimately respond to any
proposal to change existing transportation patterns and regulations will, to a large extent,
depend on how successful the public outreach program is in educating and involving all
affected groups and individuals.
Numerous studies and demonstration programs have shown that for a market-based
transportation program to be successful, the citizens and potentially affected parties must be
involved in the planning process, they must be educated on the issues at hand and the proposed
solutions, and their input must be taken into consideration in developing a final plan. The level
of public acceptance for a transportation pricing initiative will vary considerably depending on
what changes have been proposed, the transportation system presently in place, and how well
the project planners have adapted to and incorporated the public's views. Only through broad
based support from all affected groups can a transportation pricing program successfully
achieve its goals.
Chapter 5 - Public Involvement and Acceptance
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Chapter 6
Equity and Transportation Pricing
Equity is an important consideration in any transportation pricing program, whether it
be a parking cash-out program, an emissions-based vehicle fee, or any other pricing strategy.
The recognition that various groups and individuals are affected differently by such measures is
vital to the success of any transportation pricing program. However, equity can be enhanced
greatly by pricing programs. Since the aim of these programs is to have people pay the costs
they create, they are likely to be inherently more fair than current financing systems. This
principle has been characterized as "paying for what you get, getting what you pay for" (in
California's Transportation Future, December, 1995, California Market-based Transportation
Strategies Working Group). EPA considers this a highly appropriate principle to follow.
Some people assume that if anyone has to pay more under a new pricing program that
this indicates inequity. That is not the case. Many people are subsidized now while many
others pay a disproportionate share of the costs. Reducing subsidies and increasing the
connection between the costs people create and what they pay should create a fairer system.
This chapter examines equity in transportation pricing programs. The first section
presents an overview of the equity issue. In order to provide a baseline against which
transportation pricing programs can be weighed, the second section briefly assesses the equity
and inequities of the current transportation financing system. The third section discusses
various equity issues relevant to transportation pricing programs. The last section discusses
specific ways to increase equity through new transportation pricing systems.
Overview of the Equity Issue
Equity with respect to a transportation system is both an issue of the distribution of
costs and benefits among groups and a question of access and mobility for all individuals.
Developing and implementing an equitable transportation system only means that all groups
should be treated fairly. It also means that each individual should be able to adequately meet
his or her transportation needs while paying for them fairly. Paying for them fairly needs to
include the recognition that not everyone can necessarily pay their full share and that society
benefits if they are assisted. Realizing these goals in an efficient manner is at the heart of the
equity issue. Equity has traditionally been defined in terms of the allocation of benefits and
costs between income classes and races. But considering the equity of the transportation
system for other groups may be just as important. These other groups include the disabled, the
elderly, the young, women, those who drive little or not at all, those who live near traffic,
businesses, rural and urban residents, current and future travelers, peak-period users and those
who do not travel at the peaks.
Equity is very difficult to define. Different people may have different ideas. These
include some of the following possibilities:
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1. Equal shares: everyone gets an equal share of the benefits.
2. Greatest good: seek the "greatest good for the greatest number."
3. Minimize inequities in outcome: seek to ensure satisfactory benefits first for
those with the least.
4. Fair share: each person gets what s/he pay for and pays for what s/he gets,
without concern for those who are disadvantaged.
It should be noted that we have a transportation pricing system now that it has its own
equity impacts. Creating new fees to improve the extent to which prices reflect costs imposed
will not initiate pricing or equity issues. Another important point is that new fees do not
necessarily mean more charges. Many studies have included options for returning the new fees
by lowering taxes that are inequitable, lowering other fees, providing tax rebates, etc. Just
changing the way in which costs are paid can significantly reduce air pollution by connecting
consumers' choices with the actual fees they pay.
As noted above, the distribution of costs and benefits between individuals or between
groups is central to the equity issue. Pricing programs are intended to link payment more
closely to those choices which create costs.
Also central to the issue of equity is the ability of each individual to achieve his or her
desired level of mobility while paying for it fairly. Although equity concerns are often
expressed in ethical or moral terms, society as a whole also benefits socially and economically
when each person has access to transportation. Milwaukee's bus system provides an
interesting example of the benefits that can result when transportation accessibility is
improved.
Example: Milwaukee County Transit System
Society's economic prosperity may well be enhanced through improved equity in the
transportation system. In the Milwaukee area, public transit limitations often kept individuals
from accepting certain jobs. A number of employers in the suburbs of Milwaukee had
difficulty hiring the workers they needed, largely because of limited public transportation. To
alleviate this problem, the county worked with employers to extend the Milwaukee bus system
into underserved areas. The net result of this action was that individuals who resided in the
city could take public transportation to a place of work in the
suburbs, increasing both the availability of labor for these businesses
and the availability of employment for people living in the city.
Equity and the Current Transportation System
The current transportation financing system in the United States is inequitable for a
variety of reasons:
Social Costs. As noted earlier in this document, some of the costs of automobile use
(particularly some of the costs of the public road network) are paid by drivers through
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gasoline taxes and tolls. However, these payments are not sufficient to cover all of the costs of
automobile use. The remainder of the costs are paid in several different ways. The additional
direct costs of building and maintaining roads are paid indirectly through property, sales and
income taxes. Indirect costs of supporting vehicles by local governments are paid for in the
same way. These include the costs of providing police and fire services, public works and more
general government operations that support private vehicles (planning, etc.) The more general
social costs of pollution, nuisances, etc. are borne by people and society in the form of
additional health costs, poor environmental quality, disease and discomfort, congestion, and
other unpleasant effects. As a result, the current transportation system unfairly forces those
members of society who do not drive or drive relatively little to help pay for the cost of heavy
automobile use by others. Subsidies also encourage a level of driving that exceeds what people
would actually choose if they had to pay the costs. This increases costs and negative effects for
everyone above a desirable level. Some people pay a disproportionate share of those costs.
It is worth noting, that everyone benefits from the public road network, as well as
suffering from the use of it. This is because most goods and services are available to
consumers as a result in part of the public road network and because buses and bicycles
also use the roads.
Marginal Costs. Besides the issue of getting drivers to pay more of the costs they are
responsible for, there is an issue that some drivers are responsible for much more cost
because of when and where they drive. Those who drive in congested areas at peak
periods impose heavy costs on others by the delays they contribute to. They also create
demand for widening roads, which is has very high economic and environmental costs. It
is more fair that those who drive at peak periods should pay for the costs of widening
roads and of delaying others. Congestion pricing seeks to enhance equity by charging
those who create the costs these "marginal" costs, as opposed to averaging the costs of
road building over all drivers or taxpayers, even those who do not create much of the
demand.
Private Costs. In the U.S., households spent an average of $6,044 on transportation-
related services in 1995.58 While those with lower incomes may pay less than this per
year, they still may not be able to afford an automobile. Without a car, such individuals
and families often achieve limited mobility because other options are not readily
available.
Access. Not all individuals have equal access to employment and services. This is due,
in part, to a lack of access to transportation sources and to land use patterns that are
auto-supporting and that arise from current transportation pricing policies. This denies
people economic opportunities, as well as access to shopping, services, social
opportunities, etc.
58 U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Statistics
Annual Report. 1996. Washington, D.C., 1996, p. 45.
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Parking. The current system provides
free or reduced prices for parking at
most work places, shopping and public
areas. This subsidizes automobile
travel and provides a disproportionate
benefit to upper- and middle-income
individuals who are more likely to
drive. It penalizes those who do not
drive by charging them higher prices
to cover the costs of parking. Parking
spaces cost money: one report
indicated a cost of $2,500 to build a
surface space and $1,066 per year to
maintain it, with the comparable costs
of $18,000 initially and $1,300-4,600 a
year for multi-level spaces.59
Underground spaces can be much
more expensive. "Free" parking
mandated by city ordinances with minimum parking requirements is also likely to have
negative effects on lower-income residents because of the hidden costs associated with
meeting the requirements. Minimum parking requirements raise the price of housing
because more land and materials are consumed. Developers, in turn, often respond to
such parking requirements by building larger and more expensive units.60 This results in
a smaller supply of housing at increased prices. If there are fewer and larger units due to
minimum parking requirements, low-income people are hurt, as are many middle-income
people. Because housing is made more expensive as a consequence of minimum parking
requirements, the poor pay for parking even if they do not own cars. In addition, lower
housing density also tends to lower transit feasibility, thereby hurting the poor and many
others. Lower density has many costs for society as a whole, including the additional
costs of government and utilities in lower-density areas.
The Elderly, Disabled and Young. The elderly, disabled, and the young are particularly
affected by limited public transit and reliance on the automobile for mobility. Unless
they live near a public transit stop with good, affordable access to key destinations, these
individuals often have to depend on family, friends, and neighbors for transportation
and/or be deprived.
Minorities. Minority groups are often disproportionately affected by the inequity of the
current transportation system because they tend to represent a relatively large percentage
of the lower income population. In addition, they may be more likely to be subject to the
health risks and annoyance of having major roads near their homes.
59 Parking costs are for Stanford University, referenced in Blueprint for a Sustainable Bay Area. Urban
Ecology, 1996.
60 Shoup, Donald C., "An Opportunity to Reduce Minimum Parking Requirements," Journal of the
American Planning Association. Winter 1995, p. 25.
. .. ..
Transportation-Related
Expenditures by Households in 1994
(1997 dollars)
All Transportation:
$6,044 ^
Vehicle Purchases:
$2,725
Gas and Oil:
$986
Other Vehicle
Expenditures:
$1,953
Purchased
Transportation Services:
$389
Source: U.S. Department of
Transportation, 1996, p. 45.
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Geography. Geographic disparities are another significant factor in the current system.
Urban residents are often exposed to higher levels of mobile source pollution than
suburban residents because many people drive into the city from the suburbs for work.
Although it may be desirable to base the "price" of driving, at least in part, on the number
of vehicle miles traveled, it may be necessary to consider issues such as a driver's
contribution to congestion and air pollution as well. For example, although those living
in rural areas are particularly reliant on the automobile for travel and also tend to drive
more miles than urban residents, these individuals may have little impact on air quality or
congestion in urban areas.
Transit Fees. Most transit fees do not vary by income level and, thus, represent a greater
percentage of income for those with lower incomes (this is true for many goods and
services purchased). In addition, individuals at the lowest income level use public
transportation nearly three times as much as those at the highest income levels, yet
because transit fares do not vary greatly with distance traveled, higher-income individuals
generally pay less per mile to use public transportation. (This result is largely due to the
fact that higher-income individuals rely more heavily on commuter transit services,
which provide travel over longer distances and are often more heavily subsidized.)61
The Equity Effects of Transportation Pricing
Programs
Although transportation pricing programs can be used to address the inequities of the
current transportation system (and also to reduce traffic congestion and improve air quality), it
is important to consider their equity effects as well. While many of these programs may not be
entirely equitable, they may nevertheless improve upon the current system and generate
significant benefits for society if carefully designed and implemented.
There are a number of important equity considerations that should be taken into account
when designing and implementing a transportation pricing program:
• How will individuals in different groups be affected?
• Have individuals in these groups been given a voice in the program development
process?
• Will the program increase mobility?
• How will funds generated from the program be utilized?
• Is there a more equitable means of achieving the program's goals?
Addressing these questions, particularly during the program development stage, will provide
for a more equitable policy and ensure that individuals in different classifications (urban, rural,
minorities, different income levels, etc.) are treated fairly.
61 U.S. Department of Transportation, 1996. p.14.
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In evaluating a transportation pricing program from an equity perspective, one must keep
in mind that higher-income people tend to drive more than lower-income people. Those in the
lowest income levels tend to use the highway system very little and to drive very little during
congested periods. As a result, transportation pricing programs aimed at highway travel will
likely affect a greater proportion of higher-income people than low-income people. In
discussing the impact of pricing programs on low-income people, it is also important to note
that minorities, women, and young people tend to be disproportionately represented in
lower-income categories.
The remainder of this section discusses specific equity issues of transportation pricing
measures. To simplify the discussion, transportation pricing measures are divided into two
general categories: (1) taxes, tolls, and fees, and (2) direct subsidies and parking cash-out
programs. These two categories differ in that one takes money away from transportation
consumers while the other gives money to certain consumers.
Tolls, Fees, and Taxes
Tolls, fees and taxes will affect different income groups in different ways. Under a
pricing scheme, those with high-incomes enjoy the benefits of less congested roads (e.g.,
shorter commutes) and may only need to eliminate "discretionary" driving. Higher-income
groups are much more likely to be affected by new transportation fees, but also have the
greatest ability to pay for them. In general, road users who value time savings over increased
expense, such as commercial delivery services, are likely to benefit from reduced congestion.62
Furthermore, in the case of peak-pricing or time-of-day tolls, higher-income people are often
better able to alter their travel schedules and take advantage of less expensive fares.
While lower-income individuals tend to drive (and park) less than higher-income
individuals, transportation pricing measures such as tolls, fees, and taxes have a greater impact
for low-income groups if they do have to pay them. Low-income people may be forced to
forgo "necessary" trips. Those most likely to be hurt are those who are employed in 9-to-5 jobs
with inflexible schedules. Those who are unemployed, or who work during later shifts will not
be affected to the same degree.
In addition to tolls, fees, and taxes that are designed to reduce congestion (i.e., by
reducing trips), pricing programs that are based on the emission rates of vehicles, such as an
emissions fee program, can potentially have differential effects on individuals at different
income levels. This is because individuals with lower incomes are somewhat more likely to
drive older vehicles that pollute at relatively high levels and they have less ability to repair
them. As a result, an emissions-based vehicle tax may impact lower-income individuals more
significantly if they do not have other options for achieving their required level of mobility.
62 Congestion costs (i.e., potential value of time savings) to an individual depend on the amount of time
spent in traffic delay and the value of his or her time. Congestion costs, therefore, are higher for high-
income individuals ($1,570 per year) compared to low-income individuals ($60 per year) because high-
income individuals generally spend more time traveling and because their wage rate is higher. U.S.
Department of Transportation, 1996. p. 16-17.
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For this reason many such proposals include lifeline components, where the charge is based oil
the ability to pay.
Pay-at-the-pump charges represent somewhat of an exception to the general rule that is
applicable under tolls, fees, and taxes. A pay-at-the-pump insurance program,63 for example,
would clearly benefit lower-income individuals if they currently have insurance. Since they
drive less, their total cost per trip would decrease if insurance costs are based on miles driven.64
The same is true for other drivers who currently drive less than average. Drivers who travel
long distances, such as higher-income people and commercial drivers, may pay more for
insurance than they currently pay, which is more equitable. They may, however, receive some
benefit from the program, particularly in terms of reduced congestion and pollution, as well as
a reduction in the number of uninsured motorists.
The lower- and middle-income sectors of the population may be most likely to respond to
transportation pricing measures such as tolls, fees, and taxes by switching to mass transit. (See
sidebar.) Individuals who already rely on mass transit for transportation may benefit from
transportation pricing programs if they lead to increased transit ridership. This is because
increased ridership could make transit more efficient and therefore less expensive, and/or it
could facilitate an increase in transit options and service frequency.
In addition to examining the relative effects of transportation pricing on different income
groups, it is also important to consider the equity implications based on geographic
distribution. If transportation pricing is implemented on a region-wide basis, those who live in
denser, urban core areas have more options to avoid the new charges than their suburban
counterparts. Urban dwellers generally have greater access to transit, and to a larger variety of
services and amenities that can be reached via walking, bicycling, transit, and short drives. For
example, it has been estimated that there are at least 700 restaurants within walking distance of
residences in the North Beach neighborhood of San Francisco.
Tolls and parking fees may affect people and businesses in downtown areas differently
than those in suburban areas. If tolls are instituted on highways that link people to inner cities,
people may choose to avoid the added travel expense and shop in suburban areas. Downtown
businesses may also experience a loss of employees to suburban competitors due to the added
cost of tolls or parking for employees. Suburban areas may therefore see more congestion if
people avoid tolls and choose to shop in less congested areas. Additionally, these businesses
may benefit from drawing employees out of downtown areas because they can offer a cheaper
commute. This may adversely impact people who live in urban areas if their employers move
their businesses to suburban areas. Only six percent of welfare recipients have cars, yet two-
63
Instead of paying a fixed rate for insurance that is largely independent of the number of miles traveled, a
pay-at-the-pump program would allow motorists to "pay as they go" when they fill up their tank with gas.
64
The total cost of driving on a per-mile basis includes the fixed cost of insurance divided by total mileage
driven.
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thirds of the new jobs being created are outside of the urban core.65 In addition, roughly a third
of the population is not licensed to drive, and 13 percent of the driving age population do not
have driver's licences.66
On the other hand, if transportation pricing revenues are used to reduce other taxes in
downtown areas, downtown businesses could be more competitive. Parking pricing would be
likely to free up parking, making more available for shopping and also reducing the costs of
doing business and increasing the number of destinations accessible via transit and walking.
Reducing space devoted to parking tends to enhance the attractiveness of downtown areas and
make them more appealing for both shopping and businesses.
Parking fees and transit infrastructure are important considerations in any transportation
plan. While charging for parking in urban areas may serve to limit congestion and pollution,
alternative forms of transportation should be made available to ensure easy access to downtown
areas. Increasing parking fees in congested downtown areas may also have a "spillover
effect," as people park in unregulated areas if those areas do not price their parking
appropriately. Regional parking pricing may offer the potential to level the playing field
between downtown and suburban areas.
Direct Subsidies and Parking
Cash-Out Programs
Adding new subsidies is not necessarily more equitable. Alio wing, even more travel
without paying the full costs is not a particularly desirable approach. Nevertheless, given the
current transportation system, subsidies may be an appropriate step to level the playing field for
individuals with limited mobility and income. Transportation pricing programs that subsidize
public transit may improve the overall equity of the area's transportation system because
lower-income and minority individuals are more likely to benefit from such programs. Of
course, how such a subsidy program is funded may undermine the benefits to lower-income
and minority individuals if it relies on regressive fund-raising mechanisms such as sales taxes.
However, the pricing ideas discussed in this report are all designed to increase the equity of
financing, perhaps in part by replacing unfair taxes and fees.
One transportation pricing measure that may benefit lower-income and minority people in
both downtown and suburban areas is the employer parking "cash-out" system. This policy
gives employees the option of receiving cash instead of subsidized parking. Although not
everyone will choose the cash instead of free parking, it is predicted that many people would
65 Linton, Gordon, Administrator, Federal Transit Administration, spoken remarks at Southeastern
Michigan Council of Governments' conference "Building Livable Communities Through
Transportation," University of Detroit - Mercy, June 3, 1997.
66 U.S. Department of Transportation, Highway Statistics 1991. Federal Highway Administration, 1992,
p.31.
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select the taxable cash in a cash-out program.67 If this is the case, cash-out programs may
benefit low-income employees the most, because the cash allowance would be larger in
proportion to their income than it would be for employees earning a higher income and they are
more likely to forego parking. A cash-out policy would also benefit disabled workers who are
unable to drive a car to work.
Using Transportation Pricing to Address
Equity Concerns
As noted earlier in this chapter, the current transportation system is inequitable for a
variety of reasons. In addition, there may be equity concerns associated with a specific
transportation pricing program. If carefully designed with equity as a particular consideration,
however, transportation pricing programs can be made more equitable and at the same time can
be used to actually reduce the inequities found in the current transportation system. Examples
of how this can be achieved are discussed below.
Lifeline Pricing and Similar
Variable Pricing Options
Lifeline pricing is the concept that, rather than charging all individuals the same rate,
those with lower incomes should get a lower rate for at least some of their costs. Often the
lower rate applies for a limited service. Lifeline fees are already used to provide heating and
telephone and other basic services to low-income families. Using this type of pricing scheme
for transportation services would serve to provide at least a basic level of mobility and
accessibility to many people.
Improvement of Alternative
Transportation Services
Another means of employing transportation pricing in an efficient and equitable manner
may be to use the funds generated from such measures to improve or increase transit service.
This is a simple yet effective method of addressing some of the equity concerns raised by
pricing mechanisms. By increasing or improving the level of service or by lowering the cost of
transit, individuals with lower incomes benefit. In addition, people who cannot drive a car,
such as some disabled and elderly individuals and those too young to drive benefit as well.
However, one of the other virtues of equitable pricing programs is that they encourage the
market itself to provide alternatives. If driving subsidies are reduced, then it improves the
67 The recent tax code legislation has changed the tax status of cash received in programs such as
parking cash-out.
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opportunities for private companies to provide shuttle service, deliveries, telecommunications
alternatives, neighborhood stores and other alternatives to driving.
Rebates or Subsidies to
Lower-Income Individuals
Another transportation pricing approach
that could be successful in addressing equity
concerns is a voucher system whereby
individuals with lower incomes receive a
voucher or rebate for transportation services.
The U.S. currently provides food stamps for
low-income individuals and families to ensure
that all citizens have a basic level of
sustenance. The same concept might be
applied to mobility. One recent study strongly
supports the idea of a rebate system, noting that
the way transportation revenues are distributed
significantly impacts the equitableness of a
transporation fee.68 This study compared the
distributional impact of five uses of revenue
from a hypothetical $0.05 per mile VMT fee
(see sidebar).
When the impacts of these five alternatives were compared across income quintiles, the
study found that all of the alternatives to the status quo led to increased benefits for the lowest
income quintile. The second lowest income quintile also fared the same or better under all
scenarios except the revenue neutral scheme (using fees to eliminate existing transportation
taxes). A VMT-fee rebate system where rebates are made or fees eliminate other charges
would create an incentive to drive less, thereby reducing pollution levels, and depending on
how it is structured, can also result in increased benefits for lower income groups. Open
discussion of the merits and drawbacks of various fee-rebate scenarios, how they compare to
the current transportation financing system, and their potential impacts on different groups
should lead to the best choice for each area. Those whose current benefits would be reduced by
a transportation pricing program will likely reject such a program. Public education could play
an important role by illustrating that much of the true costs of automobile transportation,
including pollution and congestion, are currently not paid by consumers, and that a per-capita
VMT-fee rebate would help to remedy this situation.
Alternative Revenue Distribution
Policies Examined
1. Retain the status quo or current
transportation system;
2. Distribute fee revenues to drivers in
each income quintile proportional to
VMT fees paid by that quintile;
3. Distribute a per-capita rebate where
each income quintile would receive
twenty percent of the fee revenues;
4. Eliminate and pay for transit fares
through VMT-fee revenue; and
5. Use fee revenues to eliminate existing
transportation taxes.
68 Cameron, Michael. Efficiency and Fairness on the Road: Strategies for Unsnarling Traffic in
Southern California. Environmental Defense Fund. Oakland, CA. 1994., p. 42.
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Conclusion
While issues such as feasibility, economics, and political realities play a vital role in the
design of any transportation pricing program, it is important to include considerations of equity
as well. Incorporating equity concerns early on in the development of a pricing program, as
opposed to addressing them as they arise in the course of implementation, will result in a more
effective program. In short, if equity concerns are addressed up front, a transportation pricing
program will be more successful at resolving the equity problems inherent in the current
transportation system.
The significant amount of revenue that may be generated by a transportation pricing
program will be sought after by many agencies and groups. The use of revenues from pricing
programs may be one of the most important factors affecting equity. Without making
provisions to insure accessibility for all individuals, regulatory and market-based strategies run
the risk of excluding a substantial segment of the population. Yet one of the key advantages of
market-based transportation pricing programs is that they allow a great deal of flexibility and
therefore provide the opportunity to address equity concerns. Prices can be varied to increase
opportunities for low-income individuals and others who are not served well by current
transportation policies. Revenues can be used to improve transportation accessibility, increase
efficiency, and reduce the cost of public transit.
Chapter 6 - Equity and Transportation Pricing
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Chapter 7
Funding Sources
Earlier chapters of this report have focused on issues that drive the feasibility of
implementing transportation pricing programs for a specific highway, corridor, locality, or
region. For example, Chapter 4 investigated the institutional relationships that are necessary
for successful program implementation, while Chapters 5 and 6 discussed the importance of
public acceptance and the need to account for equity in program design, development, testing,
and implementation. Although these issues are critical to the successful implementation of
transportation pricing programs, public and private sector decision makers will also need to
address issues related to program funding. Without sufficient funds to design, develop, test,
and implement transportation pricing measures, issues such as institutional relationships, public
acceptance, and equity may not be adequately addressed in the process, thereby compromising
the overall success of the project.
The objectives of this chapter are (1) to review the manner in which existing
transportation pricing programs have been funded, and (2) to identify potential funding sources
available to new transportation pricing initiatives. The chapter is organized into three general
sections. The first section reviews federal funding sources stemming from the Intermodal
Surface Transportation Efficiency Act of 1991 (ISTEA) that have been (or could be) employed
to fund existing programs. The second section address other funding sources and discusses the
role of state and local governments in financing the design, development, testing, and
implementation of such programs. This section also discusses private sector funding initiatives
and innovative financing strategies available to the public sector that can be used to fund future
transportation pricing programs. The third section presents a summary table of possible
funding sources.
Federal Funding Sources
General federal financial assistance for the planning, development, and improvement of
the nation's surface transportation system is provided to states and local governments through
several programs, including, for example, the Surface Transportation Program (STP), the Transit
Block Grant Program, and the Bridge Replacement and Rehabilitation Program. The funding
programs for highway activities are known collectively as the Federal-Aid Highway Program
(FAHP), through which funds are distributed to the states. Funding for the FAHP is made
available through periodic surface transportation legislation, the most recent of which is ISTEA.
It is important to note that ISTEA is up for reauthorization in 1997 and, although the potential
outcome of this reauthorization is still uncertain, early indications are that at least some of the
flexible funding opportunities provided under ISTEA will remain under its successor. Therefore,
this section discusses the current funding options under ISTEA. Later, the chapter discusses some
specific changes proposed under the reauthorization.
Chapter 7 - Funding Sources
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ISTEA authorized $121 billion for highway related activities under Title I (Surface
Transportation). This title contains various funding provisions that states and localities
potentially could use to finance transportation pricing initiatives. Likewise, Title III (Federal
Transit Act Amendments of 1991) and Title VI (Research) of ISTEA include funding programs
that could potentially be used to finance transportation pricing programs. For instance, the
Federal Transit Administration (FTA) has been actively involved in various pilot projects, such as
the California SR-91 Project and the San Diego 1-15 Express Lanes Project. The major federal-
aid programs under Titles I, in, and VI that can be used to finance transportation pricing projects
are discussed below.
Title I - Surface Transportation
Congestion Pricing Pilot Program
Authorized under Section 1012(b) of ISTEA, the objective of the Congestion Pricing Pilot
Program was to encourage the testing and evaluation of congestion pricing projects in a variety of
settings nationwide on an experimental, or pilot, basis. Under the Pilot Program, the Federal
Highway Administration (FHWA) was authorized to enter into cooperative agreements with up to
five state or local governments, or other public authorities, to establish, maintain, and monitor
congestion pricing projects. Up to three of these cooperative agreements could involve the use of
tolls on the Interstate Highway System. In addition, pre-project studies, including public
outreach, project design, and related activities, could be supported with Pilot Program funds.
The Pilot Program gave special attention to formulating plans for monitoring and
evaluating the impacts of congestion pricing projects, including those related to travel behavior,
environmental quality, equity, and economic development. Federal funds were available to
support pilot projects for a period of at least one year, or until such time as the project was
generating sufficient revenues to fund its operations without federal participation. However, no
pilot project could be funded by FHWA for more than three years after implementation.
Revenues generated by congestion pricing pilot projects were to be used for project operating
costs and other Title 23 United States Code purposes, such as costs associated with expanding
travel alternatives in the affected area.69
Originally, ISTEA funded the Pilot Program at an annual stipend of $25 million over the
period from 1992 to 1997. However, Congress rescinded $50 million of the unused balance of
Pilot Program funds in FY 1995. The National Highway System Designation Act of 1995
rescinded the remaining balance of the Pilot Program funds authorized through 1995, and
transferred authorizations for 1996 and 1997 to other purposes. Thus, unless additional funds are
made available for congestion pricing projects, there will be no further funds available to current
Pilot Program participants for activities planned under future phases, or to new applicants.
69 Title 23 of the United States Code is titled "Highways" and includes most of the laws that govern the
Federal-Aid Highway Program.
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Chapter 7 - Funding Sources
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Funding of Implementation Projects
Under the Congestion Pricing Pilot Program
• San Diego 1-15 Express Lanes Project. Categorized as an implementation project, this
project was accepted under the Pilot Program in 1995 and will receive $7.96 million over
the course of three years (1995,1996, and 1997). Other project funds include $1.99 million
in local matching funds and $115,000 in Phase I funding from FTA (these funding sources
are discussed in more detail in other sections of this chapter). (See Appendix A for more
information on this project.)
• Fort Myers/Lee County, Florida Variable Bridge Toll Project. This project involves the
implementation of off-peak toll discounts in combination with the 33 percent increase in
tolls already implemented on the Cape Coral and Sanibel Bridges in Lee County, Florida.
This pricing scheme will also apply to the MidPoint Bridge, which is currently under
construction. The innovative financing element of this implementation project is the use of
Pilot Program funds to support the establishment of a "revenue reserve fund" that will be
available to replace potential revenue loss associated with the adoption of the congestion
pricing strategy. Current funding for this project is $20 million, of which 80 percent is
federal, 10 percent is from the State of Florida, and 10 percent is from Lee County.
• California SR-91 Project. This implementation project is a partnership between the
California Department of Transportation (Caltrans) and the California Private
Transportation Corporation (CPTC), a private company that planned, constructed, and
operates the variable tolls facility. Since this is not a federal-aid highway project, however,
it is not formally a pilot project under the Pilot Program. Nevertheless, because the
operation of this private facility will provide many valuable lessons for the rest of the
country, Pilot Program funds are being used to support a monitoring and evaluation study of
the project in the post-implementation phase. (See Appendix A for more information on
this project).
Since 1992, approximately $31 million in Pilot Program funds have been obligated to
support local congestion project planning and implementation activities. Two projects were
initiated during the period between 1992 and 1994, and eight new agreements were negotiated in
1995. Of the ten projects, three are classified as implementation projects (see box above). In
addition to the implementation programs being partly funded by the Pilot Program, seven pre-
project studies have been supported with these federal funds:
1. The San Francisco-Oakland Bay Bridge Project developed by a consortium of
public and private entities headed by the Metropolitan Transportation
Commission;
2. The Twin Cities Congestion Pricing Study conducted by the Minnesota
Department of Transportation, which relied on $640,000 from the Pilot Program;
3. The Southern California Association of Governments (SCAG) Study under a
partnership of the SCAG, Caltrans, the South Coast Air Quality Management
Chapter 7 - Funding Sources
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District (SCAQMD), and the Coalition for Local Environmental Solutions (COALESCE),
which is being funded primarily with Pilot Program monies ($1.5 million) and by a local
match of $300,000 from SCAG and COALESCE (see Appendix A for more information
on this study);
4. The GO Boulder Congestion Relief Project (part of the GO Boulder Program)
being developed by the City of Boulder and the Colorado Department of
Transportation and funded with $492,000 from the Pilot Program, $221,400 from
the City of Boulder, and $50,000 from the Colorado Office of Energy
Conservation;
5. The Portland, Oregon Regional Pricing Project headed by the Portland Metro and
Oregon Department of Transportation;
6. The Houston, Texas Express Lanes Pricing Project led by the Texas Department
of Transportation, with support from Houston Metro, and funded with $400,000
from the Pilot Program; and
7. The Tappen Zee Bridge Variable Toll Project being conducted by the New York
State Thruway Authority in cooperation with the New York Department of
Transportation.
The future of these pre-project studies is uncertain, given that Congress rescinded the
unused balance of the Pilot Program funds through passage of the National Highway System
Designation Act. The result is that only two of the projects discussed above, the San Diego 1-15
Express Lanes Project and the Fort Myers/Lee County, Florida Variable Bridge Toll Project, will
have sufficient Pilot Program funds available to fully implement their congestion pricing
programs (note that the National Highway System Designation Act does not affect Pilot Program
disbursements for the evaluation study of the California SR-91 Project). However, the FY 1997
Department of Transportation (DOT) budget proposes to reserve $15 million in obligation
limitation to be used for congestion pricing projects.70
Surface Transportation Program (STP)
The STP is a new block grant program authorized under Title I of ISTEA that may be
used by states and localities for any roads, including the National Highway System, that are not
functionally classified as local or rural minor collectors. These roads are now collectively
referred to as federal-aid roads. Potential uses of funds under the STP include the following:
• Construction or improvement of roads and bridges;
• Construction of bicycle facilities and pedestrian walkways;
• Development and implementation of carpool and vanpool projects;
70 The term "obligation limitation" refers to the limit to which states can commit federal-aid highway
dollars to their transportation improvement program (TIP) projects resulting from the ceiling imposed by
the annual appropriations bill.
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• Funding of capital and operating costs for traffic management and control;
• Funding of projects related to safety improvements; and
• Funding of wetland mitigation projects.
The total funding authorized for the STP over the period from 1991 to 1997 is $23.9 billion.
To date, states and localities have not used this financing vehicle to partly or fully fund a
transportation pricing project. Various issues related with the formula for the distribution of
funds and constraints on the use of such funds may diminish the attractiveness of this financing
vehicle for such projects. Specifically, the formula for distribution of funds is based on each
state's FY 1987 to 1991 share of total national funding, with an appropriate adjustment for
Interstate Maintenance and Bridge apportionments. Once the funds are distributed to the states,
the following restrictions govern the types of projects that these monies can fund:
• Each state must set aside 10 percent for safety construction activities and 10
percent for transportation enhancements, which encompass a broad range of
environment-related activities;
• A state must divide 50 percent of the funds by population between each of its
areas with populations greater than 200,000 and the remaining areas of the state
(i.e., areas with populations less than 200,000);
• The remaining 30 percent of the funds can be used in any area of the state; and
• Areas with populations of 5,000 or less must receive at least 110 percent of the
amount apportioned to the state in FY 1991 for the old federal-aid secondaiy
highway system (i.e., rural arterial and collector roads).
Given these constraints, the types of projects that these monies are targeted for, and the
limited financial resources at the state and local levels, states have not used STP funds to fund
transportation pricing projects.
Congestion Mitigation and Air Quality Improvement Program (CMAQ)
CMAQ directs funds toward transportation projects in Clean Air Act nonattainment areas
for ozone, carbon monoxide, and particulate matter. If a state does not contain any nonattainment
areas for ozone, carbon monoxide, or particulate matter, the funds may be used as if they were
STP funds.
Total funding for the CMAQ program is $6 billion over the period from 1991 to 1997.
Funding is distributed based on each state's share of total population located within an air quality
nonattainment area weighted by the severity of the air quality problem in each area. A minimum
of one-half of a percent apportionment is guaranteed to each state. States with ozone or carbon
monoxide (and, under certain conditions, PM10) nonattainment areas may only use CMAQ funds
for projects that are likely to contribute to the attainment of the national ambient air quality
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standards (NAAQS). CMAQ projects can generally be classified in one of the categories
described below.
• Transit Improvements. Possible projects in this category relate to system/service
expansion for bus and rail services, operational improvements, or demand/market
strategies to increase the attractiveness of transit.
• Shared-Ride Services. Typical shared-ride projects include the establishment of
vanpool or carpool programs, parking areas for travelers using these services, and
programs to match drivers and riders.
• Traffic Flow Improvements. Eligible highway/road projects include those that
improve air quality by reducing congestion without adding lane mileage.
Examples include signalization to improve traffic flow; traffic
management/control, such as incident management and ramp metering;
improvements at intersections, such as the addition of turn lanes; and the
construction or dedication of high-occupancy vehicle (HOV) lanes. However,
increasing concern has developed that flow improvements are not good CMAQ
investments because they encourage more vehicle use and make walking and
bicycling more dangerous and unpleasant.
• Demand Management Strategies. Typical projects under this category include
employee trip reduction programs and "auto-free zones." Projects under this
category most closely resemble
transportation pricing strategies.
(See sidebar for an example
project.)
• Pedestrian and Bicycle
Programs. Possible programs for
CMAQ funding include the
creation of trails and bicycle
storage facilities, as well as
promotional activities designed to
encourage the use of non-
motorized modes of
transportation.
• Inspection and Maintenance
Programs. CMAQ funds can be
used for activities related to
emissions testing and control
programs that detect and repair
high-emitting vehicles. Funds can
be used for projects related to
updating quality assurance
Example: Demand Management
Project Under CMAQ
In a public-private partnership with the
Glendale (California) Transportation
Management Associates (TMA), Nestle
USA and Commonwealth Land Title .
Company participated in a demonstration
program that rewarded employees who
voluntarily chose alternatives to driving
alone (e.g., carpools, vanpools, transit,
walking, etc.). The program combined a
graduated parking charge for all employees
with incentives such as prizes, awards, and
guaranteed rides home for participating
employees. Ultimately, the demonstration
project (of which $48.7 thousand was
funded using CMAQ funds and $55.3
thousand was matched by the private sector)
will produce information that planners can
use to compare parking management
strategies with other transportation demand
management strategies.
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software, developing mechanic training curricula, constructing high-tech
diagnostic facilities, and other related activities.
• Other Projects and Programs. For example, feasibility studies necessary to
provide environmental documentation for a project are eligible for CMAQ
funding, although general planning studies, traffic data collection activities, and
similar assessments are not.
In this manner, improvements to transportation system efficiency, reductions in vehicle
use or travel, and most other measures that directly or indirectly reduce motor vehicle emissions
may be funded under CMAQ by documenting the projected air quality improvement. In addition,
transportation projects that already are part of an approved state implementation plan (SIP) are
eligible for CMAQ funding. No projects that provide new capacity for single-occupancy vehicles
(SOVs) may be funded with CMAQ funds unless the project is an HOV facility open to SOVs
solely during off-peak travel times.
Assuming that CMAQ maintains its funding under the new ISTEA legislation, states and
localities will continue to be able to use CMAQ funds to help finance transportation pricing
projects. Although to date CMAQ funds have not been used extensively in the area of
transportation pricing, projects such as the Glendale TMA Parking Management Program (see
box, previous page) have shown that CMAQ can be an effective mechanism for funding
transportation pricing projects.
Special Financing for Toll Roads
Under Title I of ISTEA, toll roads on federal-aid facilities (i.e., roads, bridges, and
tunnels) are permitted to a much greater degree than in the past. The types of toll road project
work that can be funded under ISTEA authorizations include the following:
• Initial construction of toll facilities (except on interstate highways);
• Rehabilitation, restoration, resurfacing, and reconstruction highway projects on
toll facilities;
• Reconstruction or replacement of free bridges or tunnels and their conversion to
toll facilities;
• Reconstruction of free highways (except interstate highways) to convert to toll
facilities; and
• Preliminary studies to determine the feasibility of the work described above.
For the first time, federal legislation allows ownership of toll facilities by private entities.
However, the applicable public authority, regardless of ownership, must ensure that the Title 23
requirements are being carried out. A state may loan the federal share of a project's cost to
another public or private entity constructing the project. Funds repaid to the state under the loan
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agreement may be used for any of the purposes that fall under the original category from which
the loan monies were drawn.
In addition to the toll road financing opportunities discussed above, FHWA launched a
new initiative in 1995 to allow the use of Pilot Program funds by toll authorities to replace lost
revenue resulting from a pilot test of variable pricing. The fact that the Pilot Program is the only
federal program under which localities can introduce tolls on interstate highway segments is
likely to generate continued interest and participation in this program. The availability of funds
for this purpose will help to assure toll authorities that the revenue stream associated with a toll
facility will not be jeopardized by the adoption of a transportation pricing toll strategy. As in the
case of the Fort Myers/Lee County, Florida Variable Bridge Toll Project, reserve funds remaining
after completion of the congestion pricing pilot test may be used for other congestion relief
projects. This serves to further induce the adoption of variable toll strategies.
Perhaps even more significant, however, is ISTEA's promulgation of policies that provide
private sector entities with the ability to own toll facilities. This facilitates public/private sector
partnerships that help to diversify the financial risks that may be associated with transportation
pricing programs. Such relationships can also help to generate much needed funds for the
development and implementation of projects that (because of constraints) cannot be fully funded
with public sector resources. This change in policy contributed significantly to the success of the
California SR-91 Project, which is generally heralded as not only the first congestion pricing
project in the United States, but also as the first fully automated congestion pricing project in the
world. In fact, the California Private Transportation Corporation's franchise was the first
awarded by Caltrans under the provisions of Assembly Bill 680, California's innovative program
to encourage public/private partnerships to finance needed transportation improvements.
Title HI -- Federal Transit Act
Amendments of 1991
Under ISTEA, the transit formula and discretionary program requirements and structure
remain basically unchanged from previous law. ISTEA achieves important objectives, however,
such as providing additional transit and highway funding flexibility, thereby facilitating the use of
FTA funds for transportation pricing projects. ISTEA also allows for identical matching shares of
federal funds by states, rail modernization funding via a specified formula, increased use of the
trust fund for multimodal projects, and an expanded research program (e.g., the Transit
Cooperative Research Program). A total of $31.5 billion has been authorized over the six-year
period of ISTEA for these programs. Of this amount, $18.2 billion is to come from the Mass
Transit Account of the Highway Trust Fund, while the remaining $13.3 billion is to come from
the general fund.
The most significant change in the law from the perspective of transportation pricing
programs is greater flexibility in the use of funds under ISTEA for transit-related activities and
highway-related activities. For example, it is theoretically possible for state and local
governments to use up to 70 percent of the highway funds for transit projects and/or about one-
third of the transit funds for highway projects.
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Example of Increased Flexibility in the Use of Funds Under ISTEA
An example of how ISTEA introduces flexibility into the use of funds is the Transit Block Grant
(Section 9) Program. The basic transit program provides capital and operating assistance to
urbanized areas with populations of 50,000 or more. Section 9 funds are apportioned by a statutory
formula based on population and population density for areas under 200,000 in population and on
population, population density, and transportation data for areas over 200,000 in population.
Section 9 capital-only funds can be used for highway projects in Transportation Management Areas
(TMAs) if the metropolitan planning organization (MPO) approves and requirements under the
Americans with Disabilities Act have been met. Funds used from the matching share can be used
for either highway or transit projects.
Flexibility in the use of transit-targeted funds presents an additional financing option to
states and localities interested in developing, testing, and implementing transportation pricing
programs. For example, FTA has actively participated in the financing the San Diego 1-15
Express Lanes Project and the California SR-91 Project.
Title VI — Research (Part B,
Intelligent Vehicle Highway
Systems Act)
ISTEA established an Intelligent Vehicle-Highway Systems Act, now commonly referred
to as Intelligent Transportation Systems (ITS), requiring the promotion of compatible standards
and protocols to streamline widespread use of ITS technologies, user services, and products.
ISTEA authorized approximately $660 million for this purpose.
To date, federal ITS funds have been predominantly used to fund field operational tests
and research related to the direct and indirect impacts of technology deployment. Various ITS
technologies, especially advanced vehicle identification (AVI) systems and smart cards, can help
to enable transportation pricing measures. The California SR-91 Project, for example, uses
FastTrak transponders programmed with individual account numbers and real time variable
message signs to facilitate the fare setting and collection aspects of the program. Although the
California SR-91 Project did not rely on ITS-designated funds, states and localities can use ITS
funds for technology testing and deployment to help finance transportation pricing measures.
ISTEA Reauthorization
The future of many of the federal transportation programs reviewed above is uncertain
depending on the outcome of the ISTEA reauthorization process slated for 1997. For instance,
many states view the CMAQ program to be problematic and support its elimination from the new
transportation legislation. Likewise, the future of FHWA's Congestion Pricing Pilot Program is
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uncertain, particularly given the decision by Congress to rescind remaining funds in 1995.
Currently, transportation stakeholders are jockeying for position to influence the types of
programs that will be supported by the next version of ISTEA. At this stage, however, it is
difficult to assess with any degree of certainty how the new transportation law will affect the
design, evaluation, and implementation of transportation pricing programs.
As part of the ISTEA reauthorization process, the Clinton Administration proposed the
National Economic Crossroads Transportation Efficiency Act (NEXTEA) in March 1997.
NEXTEA is a six-year, $175 billion plan that attempts to improve on ISTEA while keeping the
general intent of ISTEA intact. The future of transportation pricing looks promising under
NEXTEA, as the proposal includes an 11 percent overall increase in ISTEA funding and an a 30
percent increase in CMAQ funding. In addition, CMAQ funding eligibility would be expanded
under NEXTEA, and an ITS Incentives Program would be created to promote integration of ITS
in both urban and rural areas.
In addition to NEXTEA, several other proposals are being considered in the ISTEA
reauthorization process. These proposals, some of which have not yet been formally introduced,
include the following:
• The 'Truth in Budgeting Act," which would place the Highway Trust Fund and
three other trust funds "off-budget" in order to authorize more expenditure in the
reauthorization of ISTEA;
• The "Surface Transportation Authority and Regulatory Streamlining Act (STARS
2000)," which would increase annual highway spending from the Highway Trust
Fund to $26 billion;
• The "ISTEA Integrity Restoration Act," which would replace ISTEA's funding
categories with two programs, the Streamlined Surface Transportation Program
and the National Highway System, which would receive 60 percent and 40 percent
of funding, respectively;
• A shift of the portion of the 18.3-cent federal gasoline tax that is dedicated to
deficit reduction (i.e., 4.3 cents) to the Highway Trust Fund; and
• A proposal that aims to (1) retain most of the principles and programs of ISTEA,
(2) base the funding formula on need, system usage, and historic distribution
patterns, (3) allocate the maximum feasible funding amount to ISTEA programs,
(4) maintain the partnerships developed under ISTEA, and (5) reduce
"unnecessary regulatory burden" at both the federal and state levels.
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Other Funding Sources
State, Local, and Private
Financing
In addition to funds available through the various federal programs described above,
states, localities, and private organizations have been actively involved in the provision of
financing for transportation pricing programs. As highlighted in Chapter 3, most programs have
relied on cooperative agreements between state, local, and federal agencies for the development,
implementation, evaluation, and funding of projects.
Transportation Pricing Programs Funded Through Cooperative Agreements
Between Different Government and Private Agencies
• The California SR-91 Project, which is being funded by FHWA, FTA, Caltrans, and
CPTC, a private organization.
• The SCAG study, which is being funded by FHWA, SCAG, and COALESCE, an
organization comprised of private businesses.
• The San Diego 1-15 Express Lanes Project, which is being funded by FHWA, FTA, and
local matching funds.
As discussed in Chapter 4, a project's geographic coverage and stage of implementation
often dictate the types of institutional relationships that must be developed. Geographic coverage
and institutional relationships, in turn, may also determine the funding pool available for
implementation and management of a project. In general, those projects that involve roadway
pricing, such as congestion pricing, must rely on a consortium of funding sources for the various
facets of implementation and enforcement. Other transportation pricing programs, however,
often rely solely on state or local funding or on the private sector.
Parking management programs have traditionally relied on private businesses to provide
the necessary financing for project implementation. However, most of these programs also
incorporate incentives (e.g., tax credits) for businesses that offset, at least partially, their
expenditures on these programs. In this way, state agencies indirectly subsidize parking
management programs through reductions in state revenues (e.g., tax revenues).
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Transportation Pricing Programs Using State, Local, or Private Funding
• The Maine Turnpike Authority Project is funded entirely by the Authority, which in turn is
funded by toll revenues.
• The Washington State Commute Trip Reduction (CTR) program is funded entirely by state
funds appropriated through Clean Air Act provisions.
• California's parking cash-out program relies on the private sector and the State's tax code
to provide the necessary funding for the program.
• The California SR-91 Project relies exclusively on the private sector to finance the
construction, operation, and management of facilities.
(See Appendix A for more information on these programs.)
TE-045 Innovative Financing
Project Initiative
Under traditional funding procedures, the share of federal funds for a surface
transportation project is not differentiated by the stage of the project (i.e., pre-construction,
construction, and operation). As a result, a state may have difficulty funding certain elements of a
project (e.g., feasibility studies, environmental assessments), which could be problematic if the
state hopes to bring the project to the private capital markets. One of the principal objectives of
innovative finance is to attract capital to transportation infrastructure from new sources. Often,
debt instruments can capitalize the necessary funds to undertake a project, but only if the potential
investors are confident that the project will be completed on time and on budget and that the
revenue stream dedicated to service the debt will materialize. The closer a project is to actual
construction, the lower the risk to potential investors, especially if engineering, environmental,
and other potential hurdles have already been cleared. Consequently, before a project reaches this
stage, the state will have difficulty attracting financing and will rely more on available grant
monies, such as federal assistance.
The TE-045 Innovative Financing Project initiative is the first stage of a new effort by
FHWA to move the current transportation financing process from a "grant reimbursement" basis
to a diversified approach that provides new options drawn from the most innovative financing
concepts developed by both the public and private sectors. By creating incentives and removing
barriers, FHWA hopes to increase states' use of the flexibility introduced under ISTEA and to
allow states to leverage capital for needed investments more effectively across funding sources.
As a result of this initiative,-a number of states have proposed innovative financing strategies that
will improve both physical and operational investments on highways and bridges. The various
financing innovations developed to date include the following:
• Innovative management of federal funds. New consideration is being given to
innovations that will remove procedural barriers to project finance, with the goal
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of improving the ability of state and local governments to leverage federal funds
more effectively, thereby accelerating projects and avoiding increasing costs. For
instance, phased funding allows states to begin projects before they have
accumulated the full budget capacity to cover the federal reimbursement of total
project costs. Likewise, tapering allows states to more effectively manage federal
contributions by allowing these contributions to vary from year-to-year.
• Bonds and other forms of debt financing. Increasingly, states are using federal
apportionments as a secondary source to support revenues pledged for bond
payments (e.g., tolls and fees). The use of federal apportionments as credit
enhancements would make it easier for states to raise private capital for projects.
• Expanded matching opportunities. In an effort to maximize the use of all
available resources, projects in the innovative financing program may count
private donations and local in-kind contributions toward the 20 percent non-
federal matching requirement. Furthermore, local capital, in addition to cash, is
considered for non-federal matching purposes. A number of state proposals also
use private capital as the required match.
• New leveraging tools, including revolving funds. Under the innovative financing
initiative and ISTEA Section 1012, federal funds can now be used for eligible
projects, which include facilities with revenue-generating potential such as toll
highways,-tunnels, and bridges; loans made to projects regardless of whether the
sponsor is a public, quasi-public, or private entity; and other credit enhancement -
arrangements, such as lines of credit or contingent loans.
• Innovative income generation schemes. To shift the burden of transportation
funding away from traditional funding generated from taxes, states are being
encouraged to identify and capitalize on available commercial income resources.
States can now earn revenue through a Variety of methods, including (in some
cases) leasing public facilities and/or rights-of-way to private entities, profit
sharing, and the sale of advertising space.
The implications of innovative financing mechanisms for the development and
implementation of transportation pricing programs are significant. Although these mechanisms
do not represent formal funding sources per se, they provide state and local governments with a
completely new array of financing options that are especially well suited for such programs. For
instance, the flexibility to better leverage federal funds and develop income generation schemes -
with private sector participation creates an attractive environment for transportation pricing
projects that may have been previously viewed as low-priority and risky endeavors. State and
local agencies can now employ innovative mechanisms to minimize the risk inherent in such
projects, such as by entering into partnerships with private organizations. The California SR-91
Project is the best example of this type of arrangement and will likely be the first of many similar
projects in the future.
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Summary
This chapter has reviewed the funding sources that have been used to finance existing
transportation pricing programs, and has identified other sources of funds that potentially may be
used for transportation pricing programs in the future. The funding sources discussed in this
chapter are summarized in Table 7-1 below.
Table 7-1
Summary of Funding Sources
Type of Funds
Funding Source
Federal
Title I of ISTEA
• Congestion Pricing Pilot Program (no longer
available)
• Surface Transportation Program
• Congestion Mitigation and Air Quality Improvement
Program
• Special Financing for Toll Roads
Title EI of ISTEA
Title VI of ISTEA
Non-Federal
State Financing
Local Financing
Private Financing
Cooperative Agreements
TE-045 Innovative Financing Project Initiative
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Appendix A
Case Studies
California's Parking Cash-Out Program
Contact: Jeff Weir
Associate Transportation Planner
California Air Resources Board (CARB)
Telephone: (916) 445-0098
I. General Description
California's parking cash-out program, which became effective in January of 1993,
requires certain employers to offer commuters the option of receiving cash in lieu of any
parking subsidy offered. Its goal was to level the commute subsidy playing field between
people who drive alone to work and people who rideshare or take public transit. The theory is
that when an employee has the choice between cash and a subsidized parking space, some
employees will take the cash and not drive to work alone. All California employers who are
located in a nonattainment area, have 50 or more employees, and subsidize employee parking
are required to establish a parking cash-out program. The law applies only to employers who
do not own the parking spaces they are subsidizing. It does not apply to employers with
parking spaces subject to existing leases as of January 1, 1993, unless the terms of the lease
allow the number of leased spaces to be reduced. With the exception of several counties in
Northern California, nearly all of California is in nonattainment for at least one criteria
pollutant.
Employers who offer parking cash-out may deduct program expenses as ordinary and
necessary business expenses on their state income tax returns. Any cash allowances received
by employees, except for any portion of the allowance used for tax-exempt ridesharing
purposes, are considered gross income and therefore subject to state income taxation.
n. Institutional Issues
Donald Shoup, a professor of Urban Planning in the UCLA School of Public Policy and
Social Research, developed the concept behind this law. His initial theoretical study on
parking cash-out was funded by the U.S. Department of Transportation (DOT). Shoup passed
the idea on to Assemblyman Richard Katz, the chairman of the Assembly Transportation
Committee. Katz liked the idea and crafted a bill, AB 2109, which made the cash-out program
a law under the California Health and Safety Code, under the General Administration of the
California Air Resources Board (CARB).
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The parking cash-out statute is self-implementing, meaning that no action is required of
administrative agencies in order to implement the law. Actual enforcement by CARB is
limited to the filing of a civil suit for penalties. CARB has not exercised its authority to seek
civil penalties, nor has it been requested to do so by any party. A recent California Attorney
General opinion excludes enforcement of the parking cash-out law by local air districts. One
important result of the law is that an increased focus was placed on parking and, in particular,
the effects of free parking on transportation and environmental issues.
in. Barriers
Although the program offers State tax benefits for employees, it conflicted with the
previous federal tax code. This was the largest barrier to implementation. Under the previous
tax code employee parking subsidies qualified as a tax-exempt fringe benefit. However, if an
employer offered employees the option to choose taxable cash in lieu of a parking subsidy, the
parking subsidy itself became taxable income to employees who continue to take parking.
(This is because the parking subsidy was provided in lieu of, and not in addition to,
compensation otherwise payable to the employee.) Therefore, if an employer offered cash as
an alternative to a parking subsidy, commuters who continued to take the parking had to pay
income tax on the full market value of the parking. This negative tax consequence deterred
employers from offering the option to cash out a parking subsidy.
However, recent tax code legislation (August 1997) has eliminated this problem.
Beginning in 1998, employers will be able to offer the choice between subsidized parking and
cash without the disincentive of making all parking benefits taxable. Hopefully this change
will increase the program's implementation in 1998 and beyond.
IV. Equity
One of the primary reasons the law was passed is that it was viewed as leveling the playing
field between drivers and individuals who take public transit, carpool or walk to work. The tax
revenues generated from the program are placed in the state's general tax fund and therefore do
not disproportionately benefit any one group. Although downtown areas are most affected by
this law, the structure of the program is such that they tend to participate in the program to the
greatest degree and realize the largest benefits.
V. Public Education, Outreach and Marketing Strategies
The Air Resources Board has developed an implementation guide for employers, has
spoken to many rideshare and employer groups, and has staff available to answer employer
inquiries. Parking cash-out is also promoted by many local air districts and ridesharing
agencies as an effective transportation demand management tool.
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VI. Effects and Benefits
The parking cash-out law includes many exemptions which limit its scope. One survey of
employers in Southern California in 1993 indicated that about 13 percent had some parking
subject to the law. A more detailed survey in 1995 found that only three percent of the
employers surveyed were subject to the law. In addition, most employers with cash-out
eligible parking have put the implementation of parking cash-out "on hold" due to the
unfavorable tax implications, estimated administrative costs, and lack of enforcement of the
provision.
The only emission or vehicle miles traveled (VMT) reduction estimates are from Shoup's
study of eight employers currently participating in the program, conducted in 1996. Although
these eight employers may not be representative of all employers, Shoup found that, on
average:
• VMT, per employee, per year decreased by 12 percent; the greatest single decrease was
realized by a company in Downtown LA whose VMT decreased by 24 percent.
• Single occupancy vehicles (SOVs) decreased 13 percent, from 76 percent of employees
to 63 percent.
• Carpooling increased from 14 percent to 23 percent of employees.
• C02 emissions were reduced by 12 percent.
• 26 gallons of gas, per employee, per year, was saved.
The program has a number of important advantages. First, it shows commuters that there
is an opportunity cost for free parking, i.e., the cash they decline in return for continued use of
the parking space. Since parking costs tend to be higher in areas where congestion is also high,
the option to receive cash instead of subsidized parking creates a strong incentive to rideshare
or use public transit in areas where this is most needed.
Secondly, the program was viewed favorably by employees because it provides them with
a new choice. This offer clearly benefits those who select the cash, but not at any direct cost to
those that elect to use subsidized parking. The number of employees who opted to take the
cash-out rather than the subsidized parking tended to increase with time. This is largely
attributed to the fact that new employees tended to take the cash-out because they did not have
to undergo a major behavioral change (e.g., they had not yet fallen into a routine of driving so
they did not feel like they were giving up a great deal of convenience).
Third, the program costs the eight employers very little, if anything. The employer is
required to offer the cash-out option only for spaces which are not owned and not part of a
preexisting lease. Therefore, affected employers must simply lease fewer spaces and transfer
the money directly to employees who do not use the parking subsidy. In the Shoup study,
employers saw a 3 percent average increase in total subsidy costs, with the individual costs
ranging from a 59 percent increase to a 74 percent decrease. Most firms indicated that the
administrative costs of overseeing the program were negligible.
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103
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A number of other benefits may result from the program as well. Cashing-out would tend
to benefit low-income and disabled employees because many such employees already take
public transit to work. Urban employees may benefit because it will be easier for them to
switch to public transit since such areas tend to have better access to public transportation.
The cash-out program also may strengthen central business districts and urban areas by
leveling the playing field with suburban areas. Downtown employers would offer more money
in return for employees giving up the parking subsidy, thereby opening up parking spaces to
shoppers, tourists, or other development. Finally, tax-windfall that results from the program
would benefit both the State and Federal government. When a commuter chooses cash instead
of the parking space, this cash is taxable.
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California SR-91 Project
Contact: Ed Sullivan
California Polytechnic State University
Telephone: (805)756-1166
Fax: (805) 756-1702
I. General Project Description
The transportation pricing project on California SR-91 is generally heralded as the first
program in the United States where tolls vary by the level of congestion. Opened in December
of 1995 under the Federal Highway Administration's (FHWA's) Congestion Pricing Pilot
Project Program, this project covers a 10 mile stretch of highly congested road in the Los
Angeles metropolitan area. The road is now fully functional and evaluation is underway.
The stretch of road, which connects the Riverside County suburbs to the Los Angeles
employment centers, was built as a two-way, four-lane toll road where HOV-3+ originally
were exempt from paying tolls. Effective January 1,1997, single occupancy vehicles (SOVs)
and HOV-2s must pay anywhere from $0.50 to $2.75 to access the lanes, while HOV-3+s get
in free. An optional "frequent traveler" program gives users a $0.50 discount on each trip
made for a flat monthly fee of $15. Existing non-tolled lanes will not be affected by the
pricing program, therefore people have a choice. Price varies by congestion, with fees
calculated on the basis of time saved at a rate of $0.22 per minute for a SOV during peak
periods. Westbound, the price peaks at $2.75 at 5 a.m., drops to around $1.50 at 9 a.m., drops
again at 11 a.m., until the afternoon peak period. The price bottoms at $.50 between 10 p.m.
and 4 a.m. For eastbound traffic, an inverse schedule exists, with a $2.75 charge during the
afternoon peak period. FastTrak transponders, programmed with individual account numbers
can be "rented" from CPTC by motorists who maintain a positive pre-paid account balance of
$30. Antennas on the road mark the time of entry on the transponders and exit sensors at the
midpoint facility read the transponders, calculate the toll and transfer the account number to a
business management system that deducts the charge.
The California Private Transportation Corporation (CPTC) has installed a facility at the
road's mid-point from which compliance is constantly monitored. In addition, 35 cameras
along the road monitor traffic levels.
n. Institutional Issues
The California SR-91 Project is the product of a partnership between Caltrans and the
CPTC, the private company that planned, constructed, and maintains the program. Fees are
adjusted to maintain consistent movement and volume along the road. FHWA and Federal
Transit Administration (FTA) are participating in, and financially supporting, the post-
implementation evaluation studies of the road, which are being conducted by researchers at the
California Polytechnic State University. However, the road itself is entirely privately funded
and the owners are permitted to collect a maximum return of 17 - 23 percent in revenues,
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depending on vehicle occupancy and travel volumes. As a result, CPTC reserves the right to
extend charges to HOV-3+s as well (at a discounted rate) if costs are not being recovered by the
proposed fare structure. State money can not be used for road construction or operation (though
local funds are allowed). In thirty years, CPTC's franchise on the road will expire and operation
rights will be transferred to the State.
This public-private partnership clearly provides benefits to both parties - Caltrans gets the
HOV lanes it cannot afford to otherwise build, and CPTC gets to run a profitable business.
However, there is some disparity in the objectives of the two main parties. CPTC's primary
goal is to increase revenue by maximizing tolled traffic. Meanwhile, Caltrans' goal is to
maximize-HOV (non-paying) traffic. It is not clear how these goals will play out in actual
practice. According to Michelle MacDowell of CPTC, the goals of the two organizations are
perfectly aligned at this time.
Within the next few years, another toll road will be constructed nearby which should
reduce SR-91 traffic considerably. It is not clear if the economic viability of SR-91 will be
jeopardized as a result.
III. Barriers
No federal or state funds were available to fund this project, which led the project
developers to look to private sources for funds. The greatest public awareness barrier to this
project seems to have been the perception on the part of taxpayers that they were double-
paying for this road. Education seems to have been a successful response. The greatest barrier
to road usage seems to be the $30 deposit price of the transponder, which some users who pay
in cash find to be excessive.
IV. Equity
According to CPTC, equity was an integral consideration in the development of this
program. A number of different account options are offered so that motorists with different
incomes can participate in a way in which they are comfortable. Accounts for disabled
persons, disabled veterans, motorcyclists, HOV-3s are all offered in addition to standard
accounts. Because no federal or state funds existed for the improvement of this extremely
congested road, CPTC views its role in reducing congestion in the area as an asset to all
motorists, whether or not they will use the express lanes themselves. According to
MacDowell, no one is forced to use the toll portion of the road, yet all lanes benefit from the
reduced congestion. Mass transit from metro buses to private shuttles and carpools, all ride
free in the express lanes.
V. Public Education, Outreach, and Marketing Strategies
CPTC has done extensive work in this area. Marketing efforts in the form of public
perception research began two years before the project opened. The goal of early surveys was
to assess the views of tax-paying voters in the affected area with respect to toll roads. Value of
time studies and traffic modeling research were also conducted to help determine appropriate
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pricing strategies. Significant outreach was made to local legislatures, city councils and local
transportation organizations. These groups as well as local Chambers of Commerce and other
citizens' organizations were invited to and hosted a series of presentations on the project. Six
weeks before the project completion, a mass media campaign was introduced by CPTC which
included direct mailings, radio advertisements, on-road signage, as well as print
advertisements. Since then, CPTC has been deluged with speaking requests from community
organizations, citizens, engineering firms, and a gamut of other interest groups.
Support for the project came from the state legislature (which promulgated the enabling
legislation) as well as the city councils in the area of the project. Two fundamental sources of
resistance were the Riverside County Transportation Commission, which was concerned that
the private company's franchise over the median lanes of SR-91 would preclude the County
extending HOV lanes from Orange County, and from residents of Riverside County, who
thought they were being tolled on a road that had been paid for with their taxes. CPTC
responded with extensive education campaigns explaining that no tax dollars were going into
this project and that private funding was the only way to add capacity to this stretch of road.
MacDowell claims that the outreach was successful. Rather than the projected 30,000
customers, SR-91 currently has over 70,000 customers in only 10 months of operation.
In general, it seems that voters support this measure since it was the only way to get funds
for the construction of HOV lanes. Earlier attempts to issue bonds and introduce a special tax
for that reason were rejected. Currently, surveys of the public are being conducted primarily to
investigate travel patterns and demand. Cal Poly's research team is conducting a 2.5 year
study (beginning with a pre-implementation baseline). The research will include surveys of
area businesses regarding their attitudes toward the project.
VI. Effects and Benefits
The stated goal of the project is to guarantee a smooth-flowing 50 mph ride. Although it is
too early to tell how successful it will be, express traffic has increased weekly from the onset
of the project, and transponder sales have significantly out paced projected rates. After only 10
months, over 70,000 transponders had been sold. The road's location in a severely congested
corridor (with no alternate routes nearby) bodes well for its success. Cal Poly's study will
include observations of traffic conditions, transit ridership, factors that influence day-to-day
use, origin-destination studies, and comparisons to traditional toll facilities. In addition, CPTC
and Caltrans will conduct on-going studies. They have already determined that 20 to 25
percent of daily trips made on this portion of the road are HOV-3+s. This project has also
been endorsed by a prominent environmental organization.
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Maine Turnpike Authority Project
Contact: Dan Paradee
Maine Turnpike Authority
Telephone: (207) 871-7713
Fax: (207) 871-7739
I. General Description
In response to congestion on the Maine Turnpike and to 1991 legislation requiring the
evaluation of alternatives before adding capacity to state roads, the Maine Turnpike Authority
conducted a two-summer demonstration with congestion pricing. The original proposal
involved a $2 peak-period toll surcharge as well as off-peak toll discounts. However, the state
legislature, responding to protests from the tourism industry in the State, precluded the
Authority from increasing tolls on the Turnpike. Instead, the Authority implemented a pricing
scheme which maintained peak-period prices but introduced coupons to be used toward off-
peak tolls. This scheme, which was in effect during a five-week period in the summer of 1995,
involving distributing coupons worth $1.60 (the price for driving from exit 1 in York through 7
in Portland, the most congested leg of the road). Millions of coupons were given out at toll
plazas, in newspapers, and in mailings. The project was repeated again for five weeks in the
summer of 1996. In 1996, however, the coupons were replaced with a reusable "Summer
Smart Pass," which could be scanned at toll booths. Off-peak periods (when the discounts
applied) were defined as 11 a.m. to 1 p.m. and 7 to 9 p.m. on Fridays; 8 to 10 a.m. and 3 to 5
p.m. on Saturdays; and 10 a.m. to 12 p.m. and 7 p.m. to 9 p.m. on Sundays.
The results of this program are now being studied, along with other measures which are
under consideration for future study. A number of other transportation alternatives were
studied and implemented as well, including ridesharing programs and reviews of the viability
of rail and transit in the corridor. In general, this study was found to have very limited success
in influencing drivers' choices of travel times.
II. Institutional Issues
Although the Turnpike Authority is almost solely responsible for the Turnpike's
management, it lost considerable power over its own domain with the State legislature's
preclusion of surcharges. Conflict with the State's prominent tourism industry appeared to be
the greatest institutional barrier in this case. It is not clear if the Authority will make future
efforts to coordinate with potential partners in the public or private sectors. According to Mr.
Paradee, some economic measures will most likely be incorporated into future projects.
This project was funded entirely by the Turnpike Authority, which in turn is funded by toll
revenues. The project was originally intended to be a congestion measure, whereby prices
were raised during peak travel periods in an effort to reduce the number of cars traveling along
the road, thereby reducing the amount of tolls collected and the Authority's revenue and
budget.
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nr. Barriers
No relevant data was given on the barriers associated with the project.
IV. Equity
Equity was not a major issue for this project. According to Mr. Paradee, this project was
merely a study to investigate whether financial incentives could change driver's habits. He
suggested that equity would have come up later if the decision were made to actually
implement a full-fledged pricing program.
V. Public Education, Outreach, and Marketing Strategies
Public outreach for this project primarily involved promotion of the program to local
residents and tourists. Brochures were distributed to everyone driving on the turnpike during
peak hours, advertisements were placed throughout the Boston and Maine areas, and coupons
were widely available. Since upwards of 40 percent of the people driving into this area on
weekends do so every weekend (during the summer), this tourist market was seen as one for
whom this offer would be worthwhile. However, the 1995 study met with limited success.
Educational and promotional efforts were increased in 1996.
VI. Effects and Benefits
The first summer of testing resulted in an increase in off-peak travel, but no noticeable
decrease in peak traffic. A survey of 5,000 peak period weekend travelers found that over two-
thirds were regular weekend users of the Turnpike. Studies for the second summer were
projected to be available at the end of 1996. Over 35,000 Smart Cards were sold in the
summer of 1996. Because the cards represent personal accounts, the follow-up research will
include information regarding origin and destination, how many times each card was used,
what time of day it was used, as well as data on travel habits that will be collected through
phone interviews with card holders. The priority of the study, however, will be to determine
how many drivers moved from peak to non-peak hours.
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Milwaukee County Transit System
"Commuter Check" Program
Contact: Sam Seward
Business Development Coordinator
Telephone: (414) 937-3251
I. General Description
The Milwaukee County Transit System (MCTS) initiated the "Commuter Check" program
in 1991 as a result of policy direction after County board members became aware of the
success of a similar program in New York City. The program has been implemented
throughout the MCTS service area. Participating businesses provide employees with a
voucher, or "Commuter Check," that can only be applied to the purchase of bus passes or
tickets, and VanPool fees. Employers decide which employees are eligible to receive vouchers
and how often they receive them. Each voucher is worth $9 and is mailed directly to
employees who may use them to purchase transit tickets at 300 locations throughout the
metropolitan Milwaukee area. The cost of providing Commuter Checks to employees is a tax
deductible expense for businesses, and the checks are a tax free benefit for employees.
n. Institutional Issues
The MCTS was solely responsible for instituting the program, which is run through a
private contractor, Commuter Check Services Corporation; no other government or private
sector entities participated in its implementation. Initial marketing efforts and the printing of
vouchers constituted most of the up-front costs which totaled approximately $30,000.
Milwaukee County supplied the budget for the program.
HI. Barriers
The most difficult obstacle that the program encountered were recruiting more businesses
for participation and convincing managers that transportation subsidies are an attractive benefit
for their employees. The most common reason for companies choosing not to participate in
the program is the cost of supplying the benefit to employees.
IV. Equity
Because individuals with lower incomes tend to use public transit more than those with
high incomes, the program may have the side affect of improving the level of equity of
transportation in the area. This will, however, be largely dependent on how employers use the
transit vouchers. Because businesses choose which employees receive vouchers, not all
employees may be treated similarly.
V. Public Education, Outreach and Marketing Strategies
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The business development coordinator of the MCTS is responsible for marketing the
program and encouraging businesses to participate. Three main strategies have been used to
increase sales: direct mail, on-bus marketing, and business reply cards; advertising in news
media has not been used. It is important to emphasize that the program was created and
implemented for purely economic reasons — air quality improvement, congestion mitigation,
and equity concerns were not considered.
VI. Effects and Benefits
MCTS instituted the program after experiencing budget cuts as an effort to help generate
much needed revenue. Over the past five years, the program has generated about $900,000 of
revenue for the MCTS (these revenues from the program are not separated from the general
transit fare revenue). Over 2,000 employees from nearly 75 companies have benefited from
the program, and participation increases each year. The success of the program depends on the
participation of large businesses, as evidenced by the fact that 20 percent of the participating
companies account for 80 percent of the volume of vouchers. In addition to the financial
benefits, the program has likely reduced highway congestion during rush hour and improved
air quality — one full bus takes the place of 44 automobiles and eliminates nearly 3,300 pounds
of air pollutants annually.
Employers benefit from the program by saving money in construction and maintenance
costs ordinarily spent on providing parking. Employees, especially those who have used
transit in the past, benefit by receiving the tax-free vouchers. According to the MCTS,
employees who use transit also tend to arrive at work less stressed and more productive than
employees who drive. In addition, the commuter check program is an easy way to provide
transit subsidies in an environment where a number of different transit carriers operate. Under
the program, employers provide the financial support, while leaving the decisions concerning
modes of transit to employees.
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San Dbego 1-15 Express lanes Project
Contact: Michelle King
Project Coordinator
San Diego Association of Governments
Telephone: (619) 595-5603
Fax: (619) 595-5305
I. General Description
In 1988, two reversible high occupancy vehicle (HOV) lanes were built in the median of I-
15, near San Diego, to address the area's severe congestion problem. Use of the lanes by
HOV-3s was so low that the San Diego Association of Governments (SANDAG) decided to
initiated a HOV buy-in demonstration project in an effort to address the under use of the lanes.
The project, which was anticipated to be implemented in December, 1996, would allow single
occupancy vehicles (SOVs) and HOV-2s to pay for access to the existing HOV-3 lanes on an
8.5 mile stretch of 1-15. Although this program weakens the incentive for motorist to
rideshare, the San Diego 1-15 Express Lanes Project is an example of a congestion pricing
program currently in effect.
The first phase of the project was a six month long process, including the preparation of
environmental clearance documents, selection of electronic tolling technology, and
development of a preliminary pricing strategy. The second phase, which began in December,
1996, includes the installation of electronic tolling equipment and the implementation of a
temporary pricing scheme. During this phase, a fixed monthly fee, based on motorist demand
for access to the lanes, will be charged.71 Observations made during the preliminary months
will be used to develop an even more sophisticated pricing scheme during the second and third
years, with fares varying by the time of day and level of congestion. Revenue generated from
the program will be used for transit expansion on 1-15, beginning with two new bus routes and
more frequent bus trips through the corridor.72
The technology used to run the project will also be implemented in phases. Brightly
colored decals (similar to those used in Singapore's area licensing scheme) will initially be
used to indicate which motorists have paid the monthly fee for access to the lanes. The
summer of 1997 will act as a transitional phase, with transponders for electronic toll collection
being mounted on automobiles, while maintaining a monthly fee system. During the second
year of implementation, the entire system will be automated, with charges being assessed on a
per-trip basis. At that time, variable message signs will be used to communicate current fares
to motorists, depending on time of day and level of congestion.
71 The access fee for the month of December was set at $50, with the lanes open Monday through Friday,
6:00 - 9:00 am southbound, and 3:00 - 6:30 pm northbound.
72 Projections suggest that revenues will total $3 to 6 million during the three-year experiment.
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n. Institutional Issues
SAND AG has partnered with the California Department of Transportation (Caltrans), the
Federal Highway Administration (FHWA), the Federal Transit Administration (FTA),
California Highway Patrol, as well as local politicians and transit agency officials to plan and
implement this project. Each participating institution has specific responsibilities:
• SAND AG acts primarily as the contract administrator for the project;
• Caltrans administers the project's design specifications and equipment installation;
• The California Highway Patrol is responsible for law enforcement, with minimum fines
for traffic violations set at $271;
• The Metropolitan Transit Development Board is responsible for implementing related
transit improvements; and
• The Project Management Team, which is made up of members from each of the
institutions involved in the project, reviews and comments on all planning and
implementation issues and concerns.
In addition, a Citizens' Advisory Committee, made up of interest groups and elected officials,
was developed in an effort to both educate and involve the public in the planning of the San
Diego 1-15 Express Lanes Project. Private sector firms and organizations are also involved in
the project. The primary private sector partners are:
• Consultants who aided in the planning process;
• United Infrastructure/CPTC, a private firm, also responsible for the SR-91 project, who
was selected to manage the road. This will include toll collection, billing, and other day-
to-day management duties.
• A second private firm will conduct ongoing monitoring and evaluation of the project.
According to Michelle King, Project Coordinator at SAND AG, coordination among the
various partners and participants has largely been successful, although time-consuming and
challenging. She stressed the importance of establishing relationships between interested and
affected institutions early in the process, and of keeping the project's planning and
development open to anyone who wants to participate. She stated that all of the participants in
the San Diego 1-15 Express Lanes Project were involved from the beginning. This turned out
to be an important factor, particularly given the speed at which the project took off.
An early barrier in this project involved the legality of congestion pricing. Because 1-15 is
an interstate road, this pricing measure could only be introduced under the provisions of the
Intermodal Surface Transportation Efficiency Act of 1991(ISTEA). Within the State of
California, SANDAG had to secure state-level project authorization through enabling
legislation passed in 1994. The project was accepted as a FHWA Congestion Pricing Pilot
Program in 1995, providing $7.96 million over the course of three years. Other project funds
include $1.99 million in local matching funds, and $115,000 in Phase I funding from FTA.
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III. Barriers
This measure is likely not to create much public opposition because it takes nothing away
from the average motorist SOVs are offered a premium service at a reasonable cost. If they
do not wish to pay, they can continue to use the congested lanes. At the very least, those users
will benefit to the extent that congestion is reduced by the availability of the nearby lanes.
HOV users will continue to have access to uncongested lanes at no cost. In addition, the facts
that this project began at the local level and that revenues would be used for transit
improvements meant that it already enjoyed public support.
IV. Equity
While equity has not been a specific component of program development, it will be
addressed as the project continues, particularly in the use of revenues for transit improvements.
Furthermore, three workshops were held to encourage participation of low-income and other
historically under-represented groups.
Area residents who do not have access to automobiles are likely to benefit from the new
transit that will be funded by revenue from this project. In addition, drivers that can afford to
pay the fee for use of the HOV lanes will enjoy some time savings. The average driver should
also experience some improvement in travel time.
V. Public Education, Outreach, and Marketing Strategies
A Citizens' Advisory Committee, made up of interest groups and elected officials, was
created under this program. The committee, which currently holds well-publicized monthly
meetings, has received relatively high participation from the public. The Board of Director
meetings have been open to the public and well-publicized, and "press kits" have been mailed
to area residents to further market the program. The greatest amount of public outreach
involves focus groups and the distribution of surveys, both aimed at estimating potential
demand for the use of the road. Local SOV motorists were the main target of these outreach
efforts. In general, these techniques found significant support for the proposed measures, and a
widespread willingness among motorists to pay for reductions in travel time. Efforts were also
made to inform current express lane users on how the proposed program and the associated
changes would affect them.
VI. Effects and Benefits
Prior to the program's implementation, the existing HOV lanes were extremely under used.
By offering all motorists access to these lanes for a fee, the San Diego 1-15 Express Lanes
Project greatly reduced the incentives for motorists to carpool. Therefore, while the program
may lead to reductions in congestion and traffic, it is unknown whether it will lead to decreases
in VMT, the number of trips taken, or vehicle emissions.
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Southern California Association of Governments (SCAG)
Study
Contact: Deborah Redman
Planning and Policy Department
Southern California Association of Governments
Telephone: (213) 236-1928
Fax: (213)236-1962
I. General Description
For the past two years, the Southern California Association of Governments (SCAG) has
conducted an ongoing pre-project study of 24 pricing strategies that have the potential to
reduce both congestion and pollutant emissions in five counties in southern California. The
study area, made up of Ventura, Los Angeles, Orange, San Bernadino, and Riverside Counties,
and populated by 15 million people, is one of the nation's most congested areas. It is also
home to SR 91 and other market-based transportation control measure (TCM) initiatives. The
SCAG study looked at various combinations of a peak-period congestion fee and an emissions
fee (a vehicle miles traveled (VMT) fee weighted for actual vehicle emissions). The study,
concluded in January, 1997, has been sent to the SCAG Regional Council for approval. It is
anticipated that, feasibility studies will be conducted and an implementation plan produced for
the chosen measures.
According to Deborah Redman of SCAG, the study found that a number of strategies can
achieve significant pollution and congestion reductions. One of the more modest proposals
was a combination of an a.m. and p.m. peak period congestion pricing fee of $0.05 per mile on
less congested portions of roadway and $0.10 on more congested portions, as well as an
emissions fee of (on average) $0,016 per mile (weighted by actual vehicle emissions). In
addition, "HOT lane" demonstration projects (like SR-91) are recommended as a short term
trial stage which will allow fine-tuning of the policy and a chance for the public to experience
the benefits of pricing.
n. Institutional Issues
This project is being conducted under a partnership of SCAG, Caltrans, the South Coast
Air Quality Management District (SCAQMD), and the Coalition for Local Environmental
Solutions and a Competitive Economy (COALESCE). These partners have met monthly to
develop and direct the project through such processes as technology review, workshops, and
strategy subcommittee sessions. Redman describes the partnership as a "very complex, deep
involvement," stressing the importance of this "trust-building effort." Essentially, that effort
has meant that the various partners have had to learn to trust each other in guiding the
development of the project and experimenting with new ideas.
In addition to the major partners, a stakeholder taskforce, known as the REACH Task
Force (Reduce Emissions and Congestion on Highways), consisting of 75 elected officials,
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business and environmental representatives, as well as other interested parties, has participated
in project development over the last year. Once the project moves beyond its study phase, new
partnerships will need to be created with local governments and agencies such as
transportation commissions and the California Highway Patrol.
Funding for this program comes primarily from FHWA's Congestion Pricing Pilot
Project, which contributed $1.5 million. A local match of $300,000 came from SCAG and
COALESCE. If the proposed project is implemented, it is expected to net $3.5 billion per year
(after a 10 percent deduction for administrative costs). It is not yet clear who will be
responsible for the management and implementation of the scheme, but some private
participation seems likely. In any case, some of the revenue will likely be returned to localities
to be used for transit improvements and the creation of other transportation alternatives on
priced corridors. Furthermore, this study investigates possible scenarios for returning money
to local communities. Some possibilities are coupons for discounted car repair, maintenance,
or emissions improvements; transit funding or transit discount coupons; state tax credits; or
reductions in other taxes. Another possible benefit could be that regulations such as the
Commuter Law could be rendered unnecessary in light of the gains made by this program.
While operational and management issues have only begun to be considered, SCAG hopes
to work out many of the details through the trial "HOT lanes" project.
III. Barriers
In Ms. Redman's opinion, the greatest barrier to future implementation will be the fact that
some carpoolers who now ride for free will suddenly be charged. Outreach efforts for these
individuals are now being planned. Another barrier is finding places where a "HOT lane"
project can be implemented without disrupting the State's existing network of high occupancy
vehicle (HOV) lanes. This issue is raising a lot of concern and will have to be addressed if a
"HOT lane" project is approved. Finally, there have been equity concerns, but Ms. Redman
feels they have been dealt with and that most groups will actually benefit from the project
IV. Equity
Equity has been an important consideration throughout this project. Populations that have
been specifically considered have been the area's Latino community, low-income groups, and
the population of 2-person carpoolers who now ride for free but who might have to pay under
some HOT lane scenarios.
Ms. Redman maintains that, while equity concerns have been seriously considered, this
project will actually benefit all groups, particularly since money is proposed to be returned to
individuals in communities in a variety of ways. In addition, transit will be further developed
in the area, and a light rail project is already underway.
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V. Public Education, Outreach and Marketing Strategies
The SCAG study has involved extensive public outreach from its inception. Early focus
groups examined a variety of issues, such as the way people think about congestion pricing,
what they know about it, and whether or not they like it. Information gathered in the focus
groups was used in developing the survey. In January, 1996, a baseline survey was conducted,
followed by a second in August. Both surveys questioned 1700 people in 20 minute
interviews. The August 1996 survey addressed attitudes regarding emissions fees and
congestion fees. Respondents were asked about their driving habits, then shown with the aid
of a computer model how these fees might impact them personally. Each respondent learned
what her/his costs would be as well as what the time savings would be.
The surveys were held both in English and Spanish in order to include the large Latino
population in Southern California. The survey efforts also covered every region within the
five-county area, particularly outlying areas where residents drive the most. Greatest support
for the program was found among Democrats and Independents, as well as Asian and Latino
populations. Women were found to have less fixed positions than men, making up somewhat
of a "swing vote."
The results of these surveys indicated that, in general, area residents liked emissions fees
better than congestion fees; not surprisingly, they liked to receive money back in the form of
some of the rebates discussed above; they had a fairly specific range of optimal costs (with
clear boundaries); and they liked the HOT lanes options, primarily because it is optional.
The REACH Task Force recommendation for HOT lane demonstration projects dovetails
nicely with SCAG's incremental approach of phasing in congestion pricing in such a way that
the public can acclimate to it with minimal difficulty. The existence of projects in the five-
county area, such as SR91, should aid in building public acceptance.
VI. Effects and Benefits
The study's specific goals were to maintain 1990 levels of mobility given a projected 40
percent increase in population. The emissions goal at the beginning of the study was to
achieve the same pollutant reductions that the SCAQMD's Commute Reduction Law
(originally Regulation XV, now Rule 2202) would achieve.
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Washington State
Commute Trip Reduction (CTR) Program
Contact:
Telephone:
Fax:
TJ. Johnson
(360) 705-7508
(360) 705-6862
I. General Description
In 1991, Washington State passed the Commute Trip Reduction (CTR) Law,
which set the parameters and framework for the CTR program. The Law affected major
employers (those with 100 or more full time employees) in counties with populations
greater than 150,000. In all, nine counties were affected, and sixty-two local jurisdictions
therein. The goals of the program are three fold: to reduce air pollution, to decrease energy
consumption and to decrease traffic flow, especially in terms of single-occupancy vehicles
(SOV) and vehicle miles traveled (VMT). Using 1992 as a traffic baseline, the program
hopes to achieve a 15 percent reduction in SOV/VMT by January 1, 1995, 25 percent by
1997, and 35 percent by 1999. Approximately 1/3 of the sites achieved the 15 percent
goal in 1995, and 2/3 of the sites realized reductions. The program planners have been
more concerned with progress in reducing the SOV/VMT than with achieving set
numbers.
A lead agency was appointed at the State level to administer the program.
Originally this was the State Energy Office, however, responsibility was turned over to the
State Department of Transportation (DOT) when the Energy Office was disbanded. A 22
Governor appointed member task force, made up of County, City, and Transit Agency
personnel, private employers, State agencies, and citizens at large developed the
guidelines of the program, which were to be used by local officials to develop their own
local ordinances. A State technical assistance team worked with the affected counties and
jurisdictions to assist them in developing and implementing local programs. CTR has
approximately a $3 million annual budget, 80 percent of which is passed onto counties for
administrative costs and 20 percent which is used for administrative purposes at the State
level. All of the funding for the CTR program comes from the State Air Pollution Control
Account, which is made up of the proceeds from a $2 motor vehicle registration tax.
Under the CTR program, employers are free to develop trip reduction programs
which compliment the needs and characteristics of their individual worksites. This led to
a number of variations in the CTR plans for different employers, some of which include
transportation pricing measures. For example, some employers are offering preferential
parking terms (e.g., lower fares) to those employees who carpool or vanpool to work,
while others are subsidizing the cost of mass transit for their employees. Local
jurisdictions and transit agencies have also gotten involved in the program, offering
incentives such as discounted mass transit fares or passes, and subsidizing the costs
associated with the formation of vanpools.
118
Appendix A - Case Studies
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n. Institutional Issues
The CTR Law requires employers to make a "good faith" attempt to try to reduce
the number of employees who commute to work in SOVs and reduce the overall number
of VMT. In addition, each affected work site is required to fill out a survey once every
two years that measures the progress of the program and details any changes in employee
commute behavior. An annual report of each individual program must also be completed.
These requirements allow the employers, jurisdictions, and State task force to identify
problems with the program, follow trends, and use successful programs from one
jurisdiction as models for others. As long as employers have made a "good faith" attempt,
and have completed the required surveys and reports, regardless of whether they have met
the goals of the program, they have complied with the law. If, however, employers refuse
to comply with the law, the local jurisdictions have the authority to sanction fines.
m. Barriers
The State of Washington ran into some barriers during development and
implementation of the CTR program. Although the program is heavily supported by
employers, they find it difficult to encourage their employees to participate because of the
lack of available public information. The general public must be informed of the
program's goals, why these issues are important, and why CTR is part of the solution.
The project developers realize that a more aggressive, statewide, public education and
outreach program must be developed. The State also recognizes that, in order to do this, it
must involve the media. However, funds for a large scale public outreach program are not
available at this time.
Every affected employer is required to appoint a transportation coordinator to
oversee the implementation of a CTR plan in the office place. The State has developed a
training program, which has been adopted by a number of local jurisdictions, and many
employers try to ensure that their employee transportation coordinators (ETC) receive this
training. However, factors such as employee turnover can lead to difficulties in ensuring
that an employee ETC is properly trained and understands the CTR program. The State
is trying to encourage employers to ensure that their employee ETC is properly trained by
getting the media involved and recognizing those employers who have successful
instituted CTR programs in the workplace. They hope to reward people who are
dedicating time and resources to the project and, in this way, get other employers more
involved in programs, thereby increasing their effectiveness.
Another barrier that the CTR program encountered was the lack of infrastructure
in some areas of the State. Public transit lines do not always cross county boundaries,
which can make cross county commuting very difficult and time consuming. Some areas
of the State do not have extensive transit alternatives to automobile travel. The State
DOT is addressing this issue and is trying to find ways to redirect resources to target
specific regions that are experiencing these sort of problems. They are relying heavily on
employer feedback to tell them where barriers such as these exist and what, at the local
level, needs to be done to help alleviate the situation.
Appendix A - Case Studies
119
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IV. Equity
A number of equity issues are relevant to this CTR program. Geographic location
has been a big concern. The population density of nine counties affected by the Law
range from rural to urban. The more rural areas do not have the same transit, congestion,
or pollution problems as the more urban areas, and therefore question why they must
comply with the same law. In addition, rural areas do not have the same level of transit
infrastructure to accommodate commuters who chose not to drive to work. This makes
the task of reducing SOV/VMT difficult because alternatives to automobile travel do not
always exist. The State is dealing with this by creating zones in each county, based on
1992 population, transit, air quality and other data, and creating goals which are
appropriate for each zone.
All employers with over 100 full time employees must participate in CTR
programs, however much concern has been voiced about smaller firms in close proximity
to one another who are not affected by the CTR Law (e.g., a number of firms whose
individual work forces are below the threshold, but whose combined, concentrated work
force is well over 100). A number of institutional barriers are associated with requiring
small employers to implement CTR programs. Studies found that implementing the CTR
program at smaller employers would lead to increased administrative costs which, in
many cases, would offset any benefits.
V. Public Education, Outreach and Marketing Strategies
The 22-member task force played an important role in the development and
implementation of the program. They held meetings with City Chambers of Commerce
and employer groups, set up focus groups for citizens and employers and held forums
where the issues associated with the Law could be discussed with affected parties. The
input collected from these meetings was used to formulate guidelines for a model local
ordinance from which local governments could mold individual programs. The focus
groups and meetings were so successful in soliciting and incorporating feedback that
almost every local government adopted the model ordinance with only minor changes.
The Task force is currently working in a review capacity, making recommendations to the
State legislature of changes which should be made.
There has not been any broad, statewide public outreach or acceptance program
associated with the CTR Law. The State DOT is in the process of developing a statewide
public outreach and education program to try to increase awareness and participation.
Due to budgetary constraints, however, they cannot implement anything at this point. The
program developers never experienced any major opposition to the program, its goals, or
its content. Employers liked the fact that they were given the guidance of the State, and
local governments but had the flexibility to model a CTR plan to fit the needs of their
workplace.
VI. Effects and Benefits
120
Appendix A - Case Studies
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So far, the CTR law has been very successful. Approximately 900 employers
participate in the program, with 325,000 employees who are directly affected by the CRT
program. To date, only one work site out of the 900 who participate in the program has
refused to cooperate. The jurisdiction fined the employer approximately $6,000, but
instead of collecting the funds, required the firm to use the monies to develop and
implement a work place CTR plan. The aim of the program is not to raise revenues, but
to reduce SOV/VMT.
In 1995, a number of reductions were realized:
• 80 million VMT were eliminated;
• 12,000 vehicles were removed from the roads during commute times;
• C02 emissions were reduced by 33,000 tons per year; and
• gasoline consumption was reduced by 4.5 million gallons.73
These numbers do not show drastic reductions or changes in commuter behavior, but they
do show that the program is in the process of achieving its goals.
The task force is responsible for performing a cost-benefit analyses of the
program. They have collected information from work sites and used State data to
determine that the CTR program costs, on average, $9 per year, per employee. In the
future, they hope to be able to compare the CTR program to other, more traditional
transportation policies, in order to gauge its effectiveness and success.
73 Telephone interview with T.J. Johnson, November 5,1996.
Appendix A - Case Studies
121
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Intentionally Blank Page
122 Appendix A - Case Studies
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Appendix B
List of Acronyms
ATC
automated toll collection
AVI
advanced vehicle identification
Caltrans
California Department of Transportation
CARB
California Air Resources Board
CBDs
central business districts
CMAQ
Congestion Mitigation and Air Quality Improvement Program
COALESCE
Coalition for Local Environmental Solutions
CPTC
California Private Transportation Corporation
CTR
Commute Trip Reduction
DOT
Department of Transportation
EDF
Environmental Defense Fund
EPACT
Energy Policy Act of 1992
ETC
employee transportation coordinator
FAHP
Federal-Aid Highway Program
FHWA
Federal Highway Administration
FTA
Federal Transit Administration
HOV
high-occupancy vehicle
ISTEA
Intermodal Surface Transportation Efficiency Act of 1991
ITS
intelligent transportation systems
MCTS
Milwaukee County Transit System
MNDOT
Minnesota Department of Transportation
MPO
metropolitan planning organization
NAAQS
national ambient air quality standards
PATP
pay-at-the-pump
REACH
Reduce Emissions and Congestion on Highways
SANDAG
San Diego Association of Governments
SCAG
Southern California Association of Governments
SCAQMD
South Coast Air Quality Management District
SIP
state implementation plan
SOV
single-occupancy vehicle -
STP
surface transportation program
TCM
transportation control measure
TMA
transportation management area
VHT
vehicle hours traveled
VMT
vehicle miles traveled
Appendix B - List of Acronyms
123
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Intentionally Blank Page
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"Opportunities to Improve Air Quality through Transportation Pricing"
Errata Sheet
page 2 - Dialogue box - Societal Costs - This section should read
• Increased traffic congestion and travel times
• Increased money spent to construct, maintain, and monitor the transportation system
• Need for additional public services to handle the problems caused by accidents
page 26 - Dialogue box - Last sentence should read (See Appendix A for more information on
these projects.)
page 105 - California SR-91 Project
• This project was not opened as a project under the Federal Highway Administration's
(FHWA) Pilot Programs.
• This facility is privately owned and operated by the California Private Transportation
Company. However, the Federal Highway Administration, Federal Transit
Administration, and Caltrans have jointly funded a monitoring and evaluation study of
this project.
• The program is marketed as FasTrak.
page 112, 114 and Table 3-2 - San Diego 1-15 Express Lanes Project
• Since 1988, the facility has contained two express lanes that are accessible, free of
charge, to high-occupancy vehicles (HOVs) - i.e., vehicles with two or more occupants.
To increase utilization of the express lanes and relieve traffic congestion on the regular
lanes, single-occupancy vehicles (SOVs) are now being given the opportunity to use the
express lanes for a fee/toll. (HOVs will continue tc> pay no toll.)
• This program has not weakened the incentives for motorists to rideshare. HOV usage has
increased by 15% since the facility's inception according the San Diego State
University's Evaluation of the pricing project.
Page 115 - Southern California Association of Governments
• Under sub-heading "Institutional Issues", FHWA is also a partner in this effort.
G \RSPDVMI\PRICCOOCV ORRECT2 WPD
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