WASHINGTON (Dec. 12, 2013) —Road-pricing advocates need to link their proposals to tangible benefits like increased capacity, reduced congestion and improved transit service if they are to overcome political objections to new fees and tolls, R Street Institute Senior Fellow Reihan Salam argues in a new policy study.

Salam notes that road pricing “is the most promising tool we have to improve the produc­tivity of America’s aging surface transportation infrastructure.” In addition to reducing congestion, pricing schemes could help to reduce air pollution, boost economic growth and improve the quality of infrastructure, he adds.

Salam cites National Surface Transportation Infrastructure Commission estimates that it would take $59 billion per year to maintain U.S. transportation infrastructure at current levels and $78 billion per year to meet the design standards set by transportation planners. In addition, congestion costs for urban areas topped $121 billion in lost productivity in 2011.

Local experiments with road pricing demonstrate that some approaches are more likely to find public support than others. For instance, “dynamic pricing” systems deployed in the Atlanta, Los Angeles and Washington, D.C. metropolitan areas in which regular lanes charge modest tolls only during peak periods, while premium lanes n uncongested level of service at all times and would charge demand-based tolls for access.

“At first, only a small number of new lanes would be built, on which demand-based tolls would be imposed,” Salam writes. “If these roads proved popular, the number of premium lanes would gradu­ally expand and, in some cases, they would replace existing regular lanes. Eventually, drivers should be given the option of using a complete HOT network of priced lanes, financed with toll revenues.”

The Oregon Department of Transportation is experimenting with a mileage-based tax, charging drivers 1.5 cents per mile driven. Consumers have the option of report­ing their mileage through a GPS-enabled device, but given privacy concerns, the department has been careful to make the use of such devices voluntary.

On the other hand, the failure of New York City’s congestion-pricing proposal, where voters failed to see a tangible con­nection between the charge and improved transit, suggests that a charge with a more direct tangible benefit — such as lowering or even eliminating transit fares — might stand a better chance of public support, Salam noted. He also proposes potentially “abolishing the federal gasoline tax and devolving responsibility for surface transportation to state governments.”

“In the near term, however, the most powerful impetus for the spread of road pricing in the United States may well be its potential to reduce the federal budget deficit,” Salam writes, noting that user fees in surface transportation could yield $312 billion in deficit reduction over the next decade. “As the costs associated with financing old-age social insur­ance programs increase, and as they threaten to crowd out other vital government functions, road pricing might prove an irresistible ‘win-win’ strategy.”

Text of the full paper can be found here:

http://www.rstreet.org/policy-study/why-road-pricing-matters/

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