Thursday 21 July 2011

Further steps to revive "traffic pricing" idea for New York

As was reported here in January, discussions have emerged once more about introducing a form of congestion pricing in New York.  I wrote extensively back then about how I thought New York should proceed, with something easy to understand, which can target congestion effectively (that means different tolls at different crossings), focuses on achieving minimum standards of service for motorists (in terms of customer service, maintaining free flow conditions and fixing poorly maintained roads) and in using net revenues to at least in part benefit those paying, but also those disadvantaged (e.g. offsetting tax cuts or discounts for disabled drivers or vouchers for those priced out of jobs).  I don't intend to repeat these points here.   

The idea is no longer called congestion charging/pricing, but "traffic pricing" (as if this sector didn't have enough overlapping terms).

To reiterate, this time the general proposal is to toll the untolled East River bridges (several crossings are already tolled). The money is intended to be used to improve public transport, reduce the hated payroll tax and possibly reduce fares. Whilst public transport improvements can be seen as an understandable corollary, and certainly reducing other taxes would be a big step forward, reducing public transport fares would be foolish, especially as users don’t pay the cost of services now (and with increased demand, overcrowding would increase too).

However, comments on the CBS local website at the time indicated disdain for the idea, and Republican Senator Skelos is opposed to it as being a new tax.  Obviously unless motorists see value, both in reduced congestion and improved road maintenance, they are unlikely to support it.

The counter from advocates is that the city has forgone US$31 billion in lost revenue by not maintaining tolls on all of the East River bridges which were abolished a century ago. This CBS report quotes a former chief engineer for the city Department of Transportation concerned about the need for maintenance of the bridges, which of course begs the obvious point that the revenue should be used first and foremost for the sustainable long term maintenance of the bridges themselves. Streetsblog has a video about what could be done with that money, which of course raises the hackles of those opposed to new taxes, and another article making the same point.  The revenue potential is obviously significant.  Opposition to it is rooted in a strong objection to new taxes.

Another question could be, what if the payroll tax was partly replaced by it? The benefits from reduced congestion and emissions would be clear, and those paying the payroll tax who don’t drive into Manhatten would all be winners. It could be a simple replacement of taxes and generate benefits from that, but this is unlikely to be supported by the environmentalists and public transport advocates who want to spend new money.   A compromise may well see a partial tax cut, with new money used on the roads (and I'd suggest facilities for cyclists, pedestrians and buses, all being road users) to offset existing spending from elsewhere that could then be used on public transport.

However, while the laudable motivation is to rescue the crumbling New York MTA infrastructure, its problems are more as a result of its dinosaur like procurement, contracting, governance and funding framework. These wont be fixed by congestion pricing, which will only pour good money after bad into something that needs more fundamental reform.

If it were up to me, I’d try to get the tolls introduced with a broad consensus of support to replace the payroll tax, by using the money to finance long term maintenance and renewals of the bridges and Manhatten’s roads, particularly resurfacing, serious long term performance based maintenance, which would also benefit cyclists by allowing for simple cycle lanes to be established.  

The MTA problems are more fundamental, and New York needs to look outside the state, and possibly outside the country for solutions to its problems. The model of city/state owned monopolies for public transit is one closer to that of Moscow than that of a modern thriving capitalist democracy. It is increasingly seen as archaic in Europe and Australasia. In other words, it is time to break up the bus system, privatise it, introduce competitive tendering and realise enormous efficiencies that private commercial management can bring. For the subway and rail systems, long term franchising may be the answer, bringing private capital in and paying it over long periods to deliver performance. When some New York politicians claim congestion pricing is more akin to something you’d see in Cuba than the USA, they might note that the MTA is more akin to something you’d see in Minsk.

UPDATECity Hall assesses the chances of success, as the Democrat Governor Andrew Cuomo persists in fence-sitting on the issue.  At some point he will have to fear splinters and come out one way or another.

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