Congestion Pricing: Can Tolling Be Fair?

Brilliant.

That’s the word kept crossing my mind as I read this clearly-written report (pdf link) about the Puget Sound Regional Council’s study on using road tolls to fight congestion.  The study found that a well-designed, comprehensive system of congestion-busting tolls could make a major dent in traffic backups in the Puget Sound.  It would also speed up transit, shorten commute times, and reduce gasoline consumption.

But much to its credit,  the report also identifies one critical question that may dominate any public debate over congestion pricing:  Can tolling be fair?

To collect the data for the study, the PSRC outfitted the cars of 275 volunteers with satellite-based tracking devices that could tell if a car was traveling on a highway or major arterial.  These GPS tracking devices work a lot like in-car navigation systems—they can tell precisely which road a car is traveling on.

Initially, the devices collected baseline data about each volunteer’s travel habits.  After setting each family’s baseline, the PSRC gave each family in the study a pot of free money that they could keep at the end of each month. But there was a hitch: the PSRC deducted a per-mile “toll” from the family’s account whenever the the GPS unit found that the car was being driven on a major highway or arterial. Tolls were steeper during peak periods and on the most crowded roads—an automatic incentive to avoid driving when the roads are most congested. (See this pdf for tolling details.)  Since participating drivers could keep any money left in their accounts, the volunteers in the study had a genuine financial incentive to drive less, on less-congested roads, or at less-congested times of day.

The study found that these tolls really worked to fight congestion. The PSRC estimated that the study’s tolling system, if implemented comprehensively, would reduce total vehicle in the Puget Sound travel by about 7 percent.  Between that reduction, and changes to the route and time of travel, tolls would make a significant dent in congestion.

Just as importantly, the study found that the public benefits of  “congestion pricing” (as this sort of system is called) vastly outweighed the costs.  See the graph to the right: over the long haul, congestion pricing saves travel time on the highway, improves transportation reliability, and reduces road operating costs. These benefits save a whopping $8 for every dollar spent on GPS installation, data transmission, and other administrative costs.

But the benefits of tolling aren’t spread around evenly. Instead, congestion pricing would create “winners” and “losers.”  The biggest “winners” would be drivers whose time is worth a lot of money: commercial truckers most of all, but also wealthy private citizens.  (If you make $100 per hour, spending $5 to save 15 minutes is a bargain!)  Transit riders would also win, since they’ll face shorter travel times at no personal cost.

The “losers” would include people priced off the roadway—folks who’d prefer to drive, but can’t afford to—as well as those who would keep on driving, but pay more in tolls than they receive in time benefits.  Perhaps worst-off would be the folks who succumbed to the “drive ’til you qualify” phenomenon:  families who moved to a distant suburb where housing seemed more affordable, but where transit simply isn’t an option and car-dependence is the norm.

But as the PSRC report points out, road tolling creates a stream of revenue that can be used to address these fairness questions head on.  It’s impossible to talk about “winners” and “losers” in the abstract, without also looking at how the tolling revenue will be spent.  If we use the revenue wisely, many of the so-called “losers” could turn into “winners.”

But it’s also important to remember that the current system isn’t fair either. Giving out road space for free also creates winners and losers.  Most importantly, free roads tilt our our transportation and land use system towards sprawl, with dispersed housing and jobs that are inaccessible by transit.  When sprawl is the norm, most families simply can’t get by without a car, and many families choose to have a car for each adult driver.  This kind of car-dependence creates terrible economic burdens for the working poor and the struggling middle class.  It also drains billions of dollars from the region each year pay for oil and cars—things we don’t produce locally.

So in the end, the real debate isn’t be about whether congestion pricing can be fair.  It’s about what kind of unfairness we’re willing to live with. Do we want the perceived unfairness of a system that asks people to pay for a limited resource?  Or do we want the undeniable unfairness of a transportation system that makes it next-to-impossible to get by without a car?

Let the debate begin.

Traffic photo courtesy of Flickr user k2d2vaca under a Creative Commons license.