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NTP: Accountability (California)
California state road 91• 10-mile, four-lane toll project located within the median of an existing eight-lane freeway• $130 million privately financed• It build high-occupancy vehicle lanes (carpool or HOV lanes) in the median of the existing highway• 35-year plan• peak/off-peak road pricing (congestion pricing)• tolls are collected electronically• tolls can go as high as $10 one way• The toll road collected enough revenue ($10 million) by August 1998 to cover operation expenses and debtservice. Travelers made an average of weekday 32,000 trips.Chicago Skyway
NTP: Accountability (Chicago)
Chicago Skyway• 7.8 mile toll bridge• Concessionaire has the right to collect all toll revenue, subject to toll limits (the govt set them inthe contract)• bid $1.82 billion for a 99 year lease.• In 2004, the Skyway’s operating revenue was $43.2 million, generating over $33 million in surplus orprofit after operating expenses were deducted.• some risks/cons of PPPs
Challenges/Disadvantages to privatizing
- Incomplete Contracts- Contract cannot be written to accommodate or plan for every possible risk orcontingency
- .• More states must enact or employ legislation that allow for PPPs to occur.
- Public agencies must create or provide enough financial incentives to encourage private companies toparticipate in PPPs. Public must balance rate of return with maintaining what is best for the publicinterest.• There is a risk of the private partner becoming insolvent and the government must assume responsibilityfor the roadway, usually incurring massive debt in the process
- • PPPs always involve a measure of risk. Risk occurs when the outcome or consequence of any decision isjudged to be uncertain to any degree
- .• The degree of risk assumed is determined by the type of PPP that is pursued
Vehicle Miles Traveled (VMT)
A policy of taxing motorists based on how many miles they travel in a givenperiod of time.- Would replace the traditional gas tax that pays for road infrastructure.
- - Represents the true cost of transportation more than the traditional fuel tax does now. FullCost/True Cost = marginal cost + maintenance + externalities (air quality, etc.) Full Cost oftransportation system varies by time and place.
- - Purpose of trips becomes more important
Vehicle Miles Traveled (PROS)
- Since full costs varies by time and place, atax on VMT is closer to paying fullcost/true cost by eliminating the focus ontime and place by taxing only milestraveled. Time and place no longer rulehow travel can be taxed.
- - More likely to change behaviors- People will drive less with the incentive to do it
Vehicle Miles Traveled (CONS)
- - Administration costs > startup costs >equipment in every car has to be subsidizedif required by government
- .- Burdens the poor/poor end up paying more
- - “Big Brother” state of government >perception of unwarranted intrusion ofprivacy
excise tax imposed on sale of fuel per gallon
- fuel taxes vary by state, currently gas varies around .4/gallon in Florida.
- - Advocates say people should pay for the roads they use, and a gas tax helps move funding towardtransportation infrastructure projects.
Fuel Tax (PROS)
Cheaper than VMT tax system. Currentlyfluctuating around .4/gallon in the FL.
Fuel Tax (CONS:)
- Does not accurately tax for the true cost oftransportation (including maintenancecosts, future changes to accommodateincreased demand, etc)- Demand for gas is relatively inelastic > gastax effective in short run as revenue source> In long run demand is more elastic bcpeople adjust their consumption of gas dueto more fuel efficient cars, public transituse, alternative trans.
- Modes, carpoolingtherefore people will use less gas and therevenue source shrinks.
- Not adjustable for incomes- Diminishes over time
Oregon Case: Oregon Road User Fee Pilot Program
Implemented VMT pilot program in Oregon and found that some households decreased their overallvehicle miles traveled.
- - Evidence that a mileage fee with a variable rate could strengthen interaction btw urban form andtravel decisions. Households in denser neighborhoods with mixed uses charged a peak fee reducedtheir VMT, while households charged the same peak fee in other less dense neighborhoods were lesseffected.
- - Program design sent conflicting incentives to participating households in terms of whether theyshould increase or reduce VMT. Eliminiation of gas taxes lowered gas prices so households chargeda flat VMT fee drove more bc they saw a decrease in gas prices.
- - Overall found that
- 1. Charging a noticeably higher fee for driving in congested conditions cansuccessfully motivate households to reduce VMT in times and places where congestion is a problem.
- 2. Spillover effect less than expected > no evident spillover to off-peak hours on weekdaysindicating households unwilling to change weekday travel patterns.
- 3. VMT system successfully sawhouseholds in all types of neighborhoods reduce their driving in peak-hour and overall travel whilebeing charged a high-rate for peak-hour travel > Highest reductions in driving in higher densitymixed use neighborhoods.
- 4. Mileage fee program that charges high-rate during peak-hour travellikely to strengthen influence of urban form on travel behavior compared to current gas tax system.
Congestion pricing (CP)
* CP is also called value pricing.
system charges drivers for entering an area at a certain time, the result is municipalrevenue, cleaner environment, and decreased traffic congestion
the practice of charging motorists more to use a roadway, bridge, or tunnel during periods of the heaviestuse. Its purpose is to reduce automobile use during periods of peak congestion, thereby easing traffic andencouraging commuters to walk, bicycle, or use mass transit as an alternative.
being considered by more and more regions as a reaction to the challenges of decliningrevenues and increasing congestion. It involves charging a fee to use a lane, road, area, or regional network forthe purposes of revenue generation and congestion mitigation.
called CP when prices are tailored to manage congestion by using a fixed time-of-dayschedule or dynamic algorithm based on congestion levels.
The most common form of CP
is high-occupancy toll (HOT) lanes, where high-occupancy vehicle (HOV)lanes are opened to use for vehicles with lower occupancy for a fee, or express toll lanes where new lanes arebuilt adjacent to existing freeways with the use of these lanes being subject to a toll.
4 types of congestion pricing techniques:
- Variably priced lanes (Lane Pricing)- variable tolls in separated lanes within a highway, such as express tolllanes or high-occupancy (HOT) toll lanes. Low occupancy vehicles charge toll while high occupancy, buses,and emergency vehicles travel free or at reduced rates. Surveys show that low-income respondents tend toexpress support for having priced HOT lanes.
- 2. Variable tolls on entire roadways (Whole Facility Pricing)- flat toll rates on existing toll roads are changed toa variable toll schedule so that the toll is higher during peak hours and lower during off-peak hours. Encouragesmotorists to use the road on off-peak hours. Peak toll rates may be high enough to ensure that traffic flow willnot break down offering motorists a reliable and congestion free trip. Can also be introduced on existingfacilities that are normally toll-free to help manage traffic flow in heavily congested highway segments.
- 3. Zone-based or Cordon charges (Zone Pricing)- Either variable or fixed charges to drive within or into acongested area within a city; usually a city center. Examples include: London, Singapore, and Stockholm
- 4. Area-wide or system-wide charges (Distance Pricing)- Per-mile charges on all roads within an area or on aroadway that may vary by level of congestion. This is like VMT; an example is the Oregon case.
Use of revenue:
A portion of the tolls will be used for operation and maintenance of the toll collection system.* Additional revenues can be used to pay for transportation projects like expansion of roadway facilities or tosupport ST alternatives like public transit subsidies.* The revenue can also solve equity issues regarding low-income individuals by providing toll discounts orcredit or to reduce other taxes or fees such as: fuel tax, registration fees, or sales tax.
To individuals and businesses: reduces delays and stress, increases predictability of trip time, and allows formore deliveries by businesses.* To mass transit: improves transit speeds, reliability of transit service, increases readership, and lowers cost fortransit providers.* State and local governments: improves the quality of transportation services without capital expenditures ortax increases by providing additional revenue source, helps retain businesses and increase tax base, andshortness incident response times for emergency personnel* Society: reduces fuel consumption and vehicle emissions
Three pieces of federal legislation enable congestion pricing
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