Bruce Schaller NYC commissioner says road pricing must benefit motorists for acceptance

Road pricing proposals have to be designed to benefit motorists if they're going to be implemented according to Bruce Schaller, deputy commissioner in the New York City department of transportation. As a senior official in the City's Bloomberg administration Schaller was heavily involved in the 2007 plans to do congestion pricing in Manhattan and - after that failed - proposals in 2008/2009 to toll the East River and Harlem River bridges.

He's writing for the August 2010 issue of Transport Policy magazine. His full paper beautifully documents and dispassionately analyses both pricing efforts. (It contains a disclaimer stating that the views expressed are his own aqnd not those of the City DOT.)

We've posted the full text via a link at the bottom of this article.

Must provide tangible benefit to those charged

"Given the power of even small groups of auto users to block pricing through the political process, pricing proposals need to be perceived as benefiting drivers individually and not simply society at large," is Schaller's major conclusion from the experience.  

Motorists in portions of two of five City boroughs, eastern Queens and southern Brooklyn and their legislative representatives managed to block both sets of proposals despite strong support elsewhere. In the case of the river tolls the same groups were joined by Bronx representatives.

Congestion pricing did succeed in gaining support from key constituencies, and elected officials. City Hall leadership plus an extensive public outreach and education campaign, and strong advocacy from the civic groups, helped get widespread acceptance. The proposals were revised and reshaped over months of intensive public discussion and expert review.

There was clear majority support for the pricing but less clear public confidence that the proceeds of pricing would be well spend, Schaller notes.

And a big hunk of federal money ($354m) was made available in an "urban partnership" grant.

Never gotten to a vote

Nevertheless the congestion pricing scheme for lower and midtown Manhattan could never be gotten to a vote in the state Assembly, although it had passed the City Council and had support of the state Governor and the state Senate.

The bridge tolls proposal a year later had support of the City, the state Governor and the state Assembly, but was blocked in the state Senate.

"Congestion pricing can be thwarted by a relatively small group of people, particularly when it requires approval from several legislative bodies," Schaller observes.

Only about 5% of employed city residents would have paid the congestion tolls as part of their daily commute.

"Getting motorists out of cars" recipe for frustration

Schaller's analysis is completely at odds with the notion that pricing schemes can be designed to get motorists out of their cars - or. in US Secretary LaHood's notorious phrase "coerce them" out of their cars.

Road pricing advocates "will need to convince drivers that they will benefit from the scheme," Schaller says.

Otherwise, they are likely to prevail in opposing the proposals.

Case for motorist benefit not easy to make

But, writes Schaller "the case for driver benefits is not an easy one to make."

 Drivers are unlikely to feel that the value of congestion reduction is worth the fee.

And their view, he says, is "by no means irrational" since pricing usually makes them worse off before the usage of revenues is accounted for.

"Where revenues are used to benefit others (e.g., transit riders), society  may be better off with congestion pricing, but individual drivers are worse off and are thus motivated to block adoption."

Moreover, proposals in which revenues would be devoted to road improvements still need to demonstrate why a select group of drivers should pay, while others do not.  They face an equity complaint that is difficult to reject.

A targeted fee or toll is most readily justified where a facility such as a bridge or tunnel depends on the revenues to pay off construction bonds. It is more difficult, he writes, to justify a targeted fee or toll for a pricing zone unless the revenues are used to uniquely benefit drivers entering that pricing zone.

"These lessons from the New York City experience, supported by experience elsewhere, suggests that it will be very difficult to obtain approval of congestion pricing in U.S. cities."

Road use fees & electric vehicles

A fee based on mileage driven and the amount of gasoline burned may in future come to be viewed by the public as enhancing equity with increased use of electric vehicles, Schaler suggests.

"Such road use fees may be more attractive if the charging equipment also provides extra services like pay-as-you-drive insurance, vehicle location services, real-time traffic alerts and so forth.

"Initial implementation of a road use charge in the U.S. might focus on groups that currently pay substantial road fees, such as truckers who pay state-imposed mileage-weight fees. Benefits for the truckers would be elimination of cumbersome paperwork and leveling the playing field between those who pay and those who currently evade the paper-based charges.

Opt-in

"To gain public acceptance, demonstrations could start with a voluntary opt-in phase, thus showing system benefits before any drivers are required to switch to a mileage-based or other road use charging system.

Motorist benefits from reductions in traffic congestion with only small changes in daily travel have been shown to occur in pilot programs in the Portland and Seattle areas have been demonstrated.

A phased implementation approach "can thus demonstrate the system’s fairness and benefits to drivers – as well as addressing privacy, reliability and cost issues"  – all before any motorist is required to pay such road use fees.

"Ultimately, mileage-based pricing can include a congestion pricing overlay that focuses on the places and times of greatest congestion, more precisely targeting congestion reduction than cordon or area congestion pricing is able to do. A congestion pricing overlay can be charged for all roads in targeted areas, overcoming the very significant public concerns with diversion from congested highways to local roads.

"Because the charge can be specific to individual road segments, mileage-based pricing can directly link motorists’ payments to improvements to roads and transit services. Such linkage can be critical to building public support for pricing and thus for addressing transportation finance needs. The ability to transparently link benefits, revenues and tax rates is likely to be mileage-based pricing’s most significant long-term contribution to the transportation system."

The full text of this important paper is accessible here:

http://www.tollroadsnews.com/sites/default/files/lessonsNYC.pdf

TOLLROADSnews 2010-04-28