Monday, July 23, 2007

Congestion Pricing Locally: Lessons from New York

With New York's congestion pricing plan back from the dead, it is possible to contemplate a local congestion pricing model despite Alderman Burke's pessimism and loud whining from motorists about recent increases in downtown parking rates that hints at the vociferous response that any congestion pricing system locally is likely to receive.

Poole's Article

In a Sunday op-ed column in Newsday, Robert Poole of the Reason Foundation, a leading proponent of congestion pricing, lays out a more workable model for congestion pricing. His analysis is consistent with other research discussing what is necessary to garner sufficient public and political support for road pricing schemes.

Poole provides a useful definition of congestion pricing: "'Congestion pricing' means charging drivers a toll to use roads at time and places where demand exceeds capacity." He goes on to claim that "in every case, congestion pricing has reduced weekday vehicle counts enough to meaningfully speed up traffic flow, offering time savings for motorists and bus travelers."

Poole cites two major flaws in Mayor Bloomberg's congestion pricing proposal. The first flaw is that the $8 daily charge is too low to reduce traffic significantly. The New York plan projected a 6 percent reduction in Manhattan traffic, far below the 15-20 percent reductions in London and Stockholm, where the congestion charges are higher.

The second flaw, according to Poole, is that the net revenue from the New York congestion charge, "only" a few hundred million dollars annually, would not fund much in the way of better transportation infrastructure. Further, all of that money would be devoted to transit improvements. What this means is that the beneficiaries of the congestion pricing system would not see all that much benefit while those paying the charge, namely, auto drivers, would see no benefit. Hence, support for the New York plan was muted while opposition has been vociferous.

Poole's solution is to increase the efficacy of the system and spread the revenue to mute the opposition from drivers. He proposes that New York should follow the Stockholm model, where the congestion pricing area coverings a relatively large part of the city and where a substantial portion of the net revenues is used to fund highway improvements. According to Poole, when the Swedes starting devoting some of the congestion fees to highway improvements, public support for the system shot up to 67 percent.

Poole thus suggests that the New York plan be revised so the congestion fee is high enough to deter 20-25 percent of the traffic to the Manhattan business district. He estimates that this would take roughly a $16 daily toll. In addition, New York should "devote a major share of that larger revenue to highway projects that offer congestion relief in the other boroughs, which would also benefit commuters from outside the city who have to go through those boroughs to get to town"

Poole closes his article on an optimistic note. He claims that the idea of congestion pricing "is robust enough to be doable without federal financial support" and predicts that if the plan funds suburban transportation improvements that the New York program "could be just as popular throughout the metropolitan area as Stockholm's."

Local Implications

This region is well-situated to implement the kind of broad-based congestion pricing system that Poole recommends. First, there are well known congestion trouble spots outside of the Loop--the Eisenhower, the Circle, the Dan Ryan and I-190 into O'Hare all come to mind with respect to non-tolled roads and the Tollway has trouble spots as well. Second, there are significant transit assets in many of these corridors (e.g., Blue Line in Kennedy and Eisenhower rights of way).

Putting these two together suggests a congestion pricing system installed in such major corridors and supporting both highway and transportation improvements in those corridors. In this way, motorists would see that the tolls they pay would be funding both highway improvements and public transit alternatives. This might mute some of the opposition to the tolls.

Likewise, public transit riders would see improvements both in terms of what money can buy (e.g., banishing slow zones from the Blue Line) and quality (e.g., tolled express lanes allow for fast and reliable express bus service). Muting the opposition from drivers and getting the support of the public transit beneficiaries of congestion pricing is what it will take to implement such a system.

A single, compact congestion zone in the City of Chicago funding public transit gives rise to all sorts wealth transfer and city vs. suburban noise. Instead, think of a mosaic of congestion pricing areas throughout the six-county area. Each area would contain both the pricing zone and a set of visible highway and transit improvements funded by the tolls. A portion of the tolls collected--say 10 percent--would go to the local governments in the area to help them deal with any additional traffic diverted from the tolled highways. Presumably, the easiest way to implement and administer the system would be to extend the Illinois Toll Authority's I-PASS system, which already has several million toll collection units in the area.

From today's perspective of a gridlocked state government, a regional transportation team that can't even make it to the second round of the federal Urban Partnership program competition, and a Chicago city government loathe to use HOV/HOT lanes and the like, such a regional congestion pricing system seems far-fetched. The current fragmented and silo-like approach to regional transportation (mixing metaphors)--IDOT, CDOT and local authorities responsible for highways and the RTA and the service boards responsible for public transit--hinders the intermodal approach to transportation that is needed to implement an effective congestion pricing system.

Yet, current institutional arrangements and political alignments are not forever. Repeat that as your mantra as you wind your way through stop-and-start traffic on the expressway, counting your blessings that you aren't the poor jamoke stuck on the bus or train next to you. Or maybe you are that poor jamoke, in which case you repeat the mantra with even more fervor.


Anonymous said...

You talk about "current institutional arrangements and political alignments are not forever," and yet the Tribune has a post tonight on how Julie Hamos thinks it might help the RTA bailout bill if the city, rather than the RTA, is given the authority to impose the real estate transfer tax in Chicago. With politicians splitting hairs like that, after having dithered 7 months in Springfield, supposedly on comprehensive reform ... .

Justin said...

Hear hear... I agree that congestion charging is a great idea, but a cordon-like system is ill-suited for Chicago. Even the Brits are talking about network-based road pricing as a way to fund transport.

Poole is probably right that turning back the revenues to motorists will win their political support. But theoretically, dedicating the revenues to transit DOES benefit motorists - the 6-20% of former motorists who are "tolled off" the roads! Remaining motorists receive benefits in the form of less congestion. The message to Chicago motorists might be: "we're dedicating the revenues to transit so there'll be room for you when you decide to take the CTA"?

Two quick clarifications:
--The "only" few hundred million dollars is an *annual* revenue stream that one can issue bonds against for larger projects.

--When talking about "traffic reductions," careful to distinguish between reductions of vehicle volumes and congestion/delay levels. In London, a small reduction in vehicle volumes has yielded larger reductions in delays, since the relationship between the two is exponential.

I think network-based road pricing is a clear winner, but my next questions would be about details, rather than political feasibility. Without a cordon, would the RTA/IDOT install GPS transponders on every car like the I-Pass? How would one deal with tolling minor, parallel routes to the highways? How to deal with transponder-less cars - say from out of state? Would the program be compatible with IDOT's open road tolling projects? How does freight fit in? Transport for London spent a great deal of money on these logistics to make sure everything went smoothly in the first months and to pre-empt nay-sayers (more than they ever planned, actually), and I think Chicago would be wise to follow suit.

I have few answers though... Food for thought for this great blog!

Anonymous said...

You really should talk to people from New York (Poole doesn't count) before you analyze the situation there because what you've written is quite misinformed. The support for congestion pricing in NYC is much higher than it was in London or Stockholm before it was introduced in those cities; and the transit ridership levels are higher as well. It's true that the NYC model won't translate to Chicago well, but your analysis is otherwise off. Read for some better insight.

More importantly, your talk of pouring congestion pricing revenues into road improvements misses the whole point of the tool. Making driving easier is only going to encourage more driving, which will require higher prices to manage demand. You're also not thinking about the land use implications of the different forms of congestion pricing in the region. Price the highways and we'll get more sprawl. Use a dowtown cordon and you will probably get more concentrated development around the core. Strategically price on-street and off-street parking throughout the region and you can shape growth as you desire, presumably to reduce sprawl.

You seem so quick to want to make concessions to the small group of hard core drivers without thinking about how a campaign that appeals to the more flexible majority population and decision makers could be operated in Chicago. There's no point in fighting for congestion pricing if it's just going to be used to faciliate more driving. We'll have gotten nowhere.