Wednesday, 26 January 2011

New York congestion pricing logical, but wont fix underlying fiscal problems

Final plan that was rejected by NY State
New York news media is buzzing with reports that congestion pricing is about to re-appear as a proposal for New York City. 

The New York Daily News is claiming:  "Politicians are quietly resurrecting plans to charge drivers up to $10 to enter lower Manhattan on weekdays" with rather vague claims that politicians who favour the idea and trying to drum up support for it among boroughs and others who waiver.  WCBS is reporting on it with negative comments from those who believe it would damage the economy, whilst Fox notes it could plug a gap in funding for maintenance.

Those who follow New York and road pricing know the idea isn't new.  As Mayor Bloomberg was within a hair's breadth of proceeding with congestion pricing in 2008, until the New York State Assembly vetoed his plans.  Details were published on Streetsblog here.  At the time he sought to impose a US$8 charge to enter downtown Manhattan between 0600 and 1800 on weekdays, south of 60th Street (with tolls on the New Jersey crossings offsetting the charge in that direction).   The plan was approved by New York City Council but needed State approval to access substantial Federal funding to enable the plan to proceed.  The Governor at the time (David Paterson - D) was supportive.   However, the Democratic Party caucus at the State Assembly was overwhelmingly opposed.  In short, the city wanted it, but the state said no.

New York today has a new Governor, Andrew Cuomo, who comes from the left of the Democratic Party (and is probably best known through his famous father long time Governor Mario Cuomo).  His views are ambiguous, as he appears to not want to nail his colours to one side or the other.

Whilst the Bloomberg plan is no more, the problems which catalysed it remain, but one in particular has become more serious.

Congestion in New York remains chronic, and as there are no funds to expand the capacity of any transport networks, better usage of what remains is going to be critical to make any difference.

Air pollution remains a concern, as New York seeks to improve local air quality and there is interest in making the city more pleasant for pedestrians and cyclists, as well as improving its environmental image.

However, most of all the problem is financial.  Put simply, New York cannot afford to maintain its road network sufficiently, nor can it afford to maintain subsidies with existing low fares on public transport.  It will need radical measures to either cut costs or raise revenue.  As such, congestion pricing is seen by many as a way forward to deliver on all these goals.

So it is inherently appealing to ration road space in New York, bearing in mind that all of the crossings from New Jersey into Manhattan are already tolled.  The logical place to start is to toll the crossings of the East River, although there is a serious issue of diversion at the Robert Kennedy Bridge and the question of access from the north.  

There can be little doubt that if designed well, a New York congestion pricing system can have very positive effects on traffic congestion, improve the environment and provide revenue that can be reinvested in the city's transport infrastructure.   These are points well recognised by advocates of alternatives to private car use.  The big political problems in New York are dealing with:
- Low income motorists;
- Coping with modeshift from motorists who choose not to drive;
- Business fears of losing custom;
- Motorist fears of getting nothing in return.

Whilst these are all legitimate concerns, it raises the bigger issue of how congestion pricing needs to be part of a wider strategy that generates net benefits overall for the city.

What does this mean?

1.  Designing a congestion pricing system that is both easy to understand but also targets congestion effectively, by not just having a single blunt price:  That means that each crossing may have slightly different prices at different times, and may charge starting and finishing at different times, and in different directions.  This is all feasible using DSRC technology (e.g. EZ Pass or similar), and can demonstrate both good faith in being congestion focused, but also reduces the impact of pricing on routes serving areas that are not so congested.  This should benefit motorists AND businesses.   Congestion is the "bad" externality, and focusing on that rather than a blunt charge would put New York ahead of London, and closer to Stockholm (where charges vary by time of day) and Singapore (where charges vary by location and time of day).

2. Give simple easy choices for motorists: That means payment options, but also information about alternative ways to travel.  That means enhanced route planner websites that include cycling and walking.  People should know they have options ranging from driving when they want, to driving at different times or on different routes in some cases, public transit, or in some cases active transport modes. 

3. Focus on having standards of service for motorists:  That means sustaining reductions in congestion.  Prices, management of streetworks and incidents and overall network management and information to motorists must be managed in a way that delivers value.  If people pay to access a network they should gain value from that, and that can be seen in treating the New York street network from a customer service point of view.  That will cost money, but the money will come from those benefiting.

4. Net revenues should benefit those paying and those most disadvantaged:  The temptation is to treat such revenue as handy just to plug gaps in budgets, but this wont do.   The first priority should be a plan over a set number of years to fix, reseal and rehabilitate New York's road network up to the standard of a modern city.  That includes everything from surfaces to signage, traffic signals, lighting, lines and street furniture.  That will deliver enormous value in terms of safety, vehicle wear and tear, fuel consumption and in the image of the city.   Public transport, cycling and pedestrian advocates and environmental groups will not want this to be a priority, but it must be.

The second priority must be to deal to those most disadvantaged.  It may be a discount for the disabled motorist, or a limited number of vouchers for the lowest income workers in locations poorly served by other modes.  Regardless of the approach, this should be addressed.  Apparently the Traffic Congestion Mitigation Commission report stated less than 1% of motorists are in the category of low income workers without alternatives.   Other options are to reduce other taxes and charges that wont distort behaviour inefficiently.

Beyond this, net revenue can be used to target improvements in alternative modes.  However, one key option is not to use the government cashflow approach to spending money on improvements, but a cost accounting approach.  As with London and Stockholm, borrow money upfront to make key improvements in advance, using congestion pricing revenue to repay the debt, and allow continuous financing of improvements.

I'd suggest simple steps like fixing key pedestrian links, new cycling corridors and kickstart key improved bus services.  It should also include reseals and improvements to major roads that are visible to motorists.  Much of this will be new work, and wont fix the fiscal problem, but for people to support what is in effect a new tax, they will want to see value in that.

However, it wont fix the colossal hole in the budget by itself, that will require other steps as well.

What it will do is plug a hole in road maintenance funding, and provide some revenue to address transit and active mode funding.   However, a wider investigation is needed to decide on long-run policies that are sustainable for fares and investment in public transit.  Options such as competitively tendered bus franchises (which have delivered significant value in London), fares that recover operating costs, and linking long run congestion pricing/tolls, parking and fares policies, ought to be investigated.

It is tragic that a great city like New York can be so poorly managed over the long term to see its core infrastructure crumble like a withering third world capital.  The contrast with foreign cities with well maintained roads and public transport systems that are older but cleaner, is stark.  The London Underground is a vastly different experience to the New York Subway, reflecting public investment, but also a fares policy that enables services and maintenance to be sustainably funded.

However, I am hoping a rational, well balanced and informed debate can be had about congestion pricing for New York, that focuses on congestion, and using net revenue to benefit motorists, the disadvantaged and to assist in funding complementary transit improvements. 

Congestion pricing can be economically efficient, it can be beneficial to road users, it can be beneficial to users of other modes by allowing infrastructure improvements and reducing delays on roads they use.  It can benefit business if it resolves severe congestion, and revenue is invested in infrastructure used by its inputs and customers.  It can deliver reductions in emissions and improvements in quality of life.   It is all a matter of design.

What New York needs to achieve this is to focus on the principle and the objectives, then let details be addressed through expertise and innovation.  It wont fix the fiscal hole, but it will make a positive contribution towards doing so, and can, if done well, be beneficial to the economy and the residents.

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