‘The genie is somewhat out of the bottle’

The “genie” a Bush appointee at the Department of Transportation is referring to is congestion pricing, or the practice of setting tolls high enough to keep traffic flowing. The quote closed a cover story in today’s Washington Post about both congestion pricing and privatization of the nation’s transportation infrastructure. Long discussed by economists as the preferred solution to highway congestion, the article describes how Bush appointees have provided funding to several congestion pricing pilot programs.

Setting aside the issue of privatization, congestion pricing may prove one of the most-discussed aspects of the debate surrounding Congresses’ next transportation bill. At the hearing where the National Surface Transportation Policy and Revenue Committee unveiled their report the issue was the subject of one of the hearing’s more heated exchanges. The committee’s suggestions include new road capacity, allowing congestion pricing on the interstate system, as well as substantial new investment in mass transit.

Funding the Highway Trust Fund 203684-1 : C-SPAN Video LibraryU.S. Representative Peter DeFazio (D-Oregon) didn’t like what he heard. Roughly 1 hour 37 minutes into the hearing he interrupted the presenters to engage in a lengthy tirade about congestion pricing. “I’m particularly concerned about some of the arguments we’re receiving about congestion pricing, I think there are some very substantial equity issues.” He posed the example of a worker whose commute was impacted by congestion pricing. “What are the alternatives as a consumer if there isn’t a viable mass transit option?” he asked, “What’s your choice? Tell your boss you’re coming in two hours later? … Sell your house? Quit your job?” Representative DeFazio went on to argue he believes congestion pricing won’t reduce traffic, just cause traffic to overload local roads. “What we’re talking about is public infrastructure, a public good,” he said, exasperated, “I can’t see how this is some grand solution when people don’t have alternatives that are comparable.”

While Congressman DeFazio’s argument that congestion pricing was a form of rationing was quickly dispelled by a commission member, the other arguments he raised were not discussed will no doubt be heard many times again. I think he has several misunderstandings:

First, implementing congestion pricing does not necessarily mean tolling all lanes. In some cases existing high-occupancy lanes are converted to allow additional drivers for a congestion toll. Elsewhere, it may be possible to add tolled lanes to an existing highway. (Like this project along I-95 near Baltimore) These solutions wouldn’t impact Congressman DeFazio’s worker, only perhaps ease his commute by removing some private vehicles. It would also have the added benefit if creating new options for all drivers — a faster commute would be available when they were in a hurry.

Second, he doesn’t consider some of the issues I considered when examining the ethics of performance parking. One, we know the wealthy are more likely to own vehicles, more likely to own multiple vehicles per household, and also drive more miles per year. While I have not seen any studies on the matter, these facts suggest congestion tolls may in fact be progressive in the aggregate. Two, existing congestion his very high real costs to all drivers in the form of time, pollution, and fuel. With new congestion pricing, Congressman DeFazio’s hypothetical worker may have to pay more in tolls, but be able to clock more hours on the job or even find he can now commute farther to a higher-paying job. Three, new tolls may have additional unintended effects. Congressman DeFazio seems to consider traffic inelastic, meaning it won’t be impacted by tolls. However, according to the National Household Transportation Survey only 19% of travel is commuting to work, and 30% is for recreational and social purposes. It seems reasonable to expect some of the drivers will drive less in response to higher costs, or even use mass transit.

While Congressman DeFazio’s concern with equity is well meaning, we should consider the complex impacts of new tolls in a sophisticated way. While transportation is and should be considered a public good, as riders of public transportation know that good is often provided at a fee.

> W. Post: “Letting the Market Drive Transportation

Author: Rob Goodspeed