Congestion Pricing: Overcoming Obstacles to Implementation

In a recent article entitled "The Political Calculus of Congestion Pricing," Professors David King, Michael Manville, and Donald Shoup of the UCLA Department of Urban Planning ponder a issue related to the old adage "if you are so smart how come you ain't rich?" The issue discussed in the article boils down to "if congestion pricing on crowded highways is such a good idea then how come it is so infrequently implemented?"

The good professors have some fun at the expense of themselves and their academic colleagues, who are confounded by such a question. After all, as nearly any economist will tell you, congestion pricing--i.e., forcing people to pay to drive on a highway when and/or where demand is high--is the most efficient way to ration a valuable resource, namely, limited amounts of highway capacity during peak travel periods. Congestion pricing reduces the amount of auto travel, thereby reducing both congestion and air pollution. Less congestion makes public transit more efficient and hence a more attractive alternative to the private auto. Congestion pricing also generates revenue that can be invested in improving the transportation system or for other uses. Yet, confound it, people stubbornly resist what appears to be so good for them.

The authors attempt to explain why. They argue that congestion pricing has widely distributed costs (e.g., toll payers) and widely distributed benefits (e.g., drivers who enjoy less congestion). What congestion pricing lacks is a motivated constituency that can get politicians and the public over the perception that congestion pricing is a burdensome new charge with few tangible benefits.

The authors suggest that congestion pricing revenue be distributed to local governments in the vicinity of a tolled highway rather than kept by the tolling agency or a central transportation authority. They believe that the promise of such revenue will encourage local governments, which wield considerable political clout, to become advocates for congestion pricing.

In its Moving Beyond Congestion Final Report, the RTA advances congestion pricing as one means to raise revenue for the region's public transit system. It appears that the RTA contemplates that such revenue would go to the RTA, which would funnel it to the three service boards, the CTA, Metra and Pace.

The three professors suggest this approach is unlikely to garner sufficient political support to win acceptance:

Freeways have regional benefits, so it might seem sensible to allocate the money to some regional authority--a public transportation or highway agency, for example.

. . . [W]hile there are some good argument for giving the toll revenue to regional agencies, they are not political arguments. A regional agency would be hard-pressed to produce a public servcie that the region's residents considered a reasonable compensation for the loss of free access to the freeways. Even spending the revenue on regional transit improvements may do little to improve the prospects for pricing. In the United States a political weak and unorganized minority rides public transit, which dims the chance of effective political support.

(Pg. 2). Indeed, congestion pricing has been successfully implemented only in cities like London and Stockholm where transit riders make a up a majority of the commuters in the affected areas and presumably have some political strength.

The article suggests that to garner sufficient support for a system of congestion pricing, the revenue should be distributed to the local governments that are in the vicinity of the tolled roads. The authors argue that few restrictions should be placed on local government use of this revenue, but a broad limitation that it be used for transportation purposes--roads, transit, bikeways, etc.--should not dampen local government support for a system of congestion pricing very much. Maybe such a system would create a virtuous cycle--less congestion making transit more efficient generating revenue that local governments can use to improve the transportation system--including local transit--from the ground up.

Professor Shoup, by the way, is the author of a recent book entitled "High Cost of Free Parking," an analysis of the baleful effects of free parking, that has created a buzz in certain planning circles.