Washington State Road Usage Charge Pilot Program - documentary

The US State of Washington recently concluded a pilot of light vehicle distance based road usage charging, testing an option to replace fuel tax.

Public television broadcaster TVW recently broadcast a documentary on the Washington Road Usage Charge Pilot Project which I have linked to below.  It includes:

• Comments from two pilot participants; and an
• Extensive interview with Reema Griffith, Executive Director, Washington State Transportation Commission.

It's around 24 minutes long, and is worth watching as it addresses issues such as comparing charges between the gas tax and paying by distance, privacy protection and use of data, as well as policy options going forward.  A full transcript is also available on the website for the documentary.

(Disclaimer: D'Artagnan Consulting advises and has been delivery partner for the Washington State Transport Commission on the Washington Road Usage Charge Pilot Project)

Congestion pricing - the United States awakens

Singapore pioneered a basic form of urban congestion pricing in 1975, and introduced what is still the most sophisticated, economically rational and effective congestion pricing in the world in 1998, called ERP (Electronic Road Pricing).  In 2020 it is transitioning its operating technology to GNSS On Board Units (albeit to initially apply the same mix of corridor and cordon charging as applies today, but with the focus on delivering more information about pricing, traffic, parking and alternative modes through the system).

However, if you've been following the recent very public debates and commentaries about congestion pricing in the USA you'd be excused for thinking it is new and innovative.  Innovative it is, it is just that the US has come a bit late to the concept, but what is driving it is not so much congestion, but the desire to use congestion pricing to raise revenue - typically not for roads.

For many years congestion pricing in the USA has largely been referred to in the context of express/HOT/toll lanes. Although such lanes offer options to pay to bypass congestion on some highways, they are not "comprehensive" in addressing congestion and more importantly are not technically able to be implementing except on roads with limited access. In most cases they have been implemented by converting high occupancy vehicle lanes to HOT/toll lanes. It is rarely economic to build new lanes and charge just for them (because there is insufficient willingness to pay for the capital costs of new capacity, particularly when such capacity may only be utilised for short periods during weekdays), so HOT/toll lanes are rarely seen outside the USA.

The positive example of toll lanes is that they demonstrate that the instrument of price is effective in managing demand so that a road can operate in free flow conditions, but of course such lanes are not practical on most roads and they always have an unpriced alternative.  At best they offer an option in some cases, and demonstrate the concept.

So full congestion pricing has not been seen in the US to date. By that I don't mean having peak pricing on an existing toll road to spread demand on that road (this is seen on many crossings, such as the Golden Gate Bridge, E-407 Toronto and the Sydney Harbour Crossings), but rather pricing of a network or placing a cordon (either on its own or as an area charge) on a zone, with priced access at set times/days.

This isn't common as all. Although there are many low emission zones in European cities (which prohibit or heavily charge vehicles that don't meet low or ultra-low emission standards) and restricted access zones to cities (this is seen in many Italian cities, keen to preserve historic centres of cities ill suited to large volumes of vehicle traffic), the only cities that charge a network or a zone for access on a significant scale are:

- Singapore

- London

- Stockholm

- Gothenburg

- Milan

- Dubai

- Tehran.

There are a handful of smaller examples, Oslo transitioned from a cordon set up for revenue raising to one that has a congestion management purpose now, but by and large congestion pricing is hard to implement.  It's been investigated in multiple cities in the UK (Bristol, Cambridge, Leeds, Manchester, Edinburgh) and elsewhere in Europe (Dublin, Amsterdam, Copenhagen, Helsinki), but has always come up against one major issue - public opposition.


What has woken up the US?

How about the US then? Suddenly cities, states and the media have discovered congestion pricing because of one simple reason - New York is going to do it. This follows previous attempts to introduce it, most notably by former Mayor Michael Bloomberg, who had his proposal for a cordon on lower Manhattan vetoed by the State Legislature.

The New York Senate and Assembly have approved it, along with the State Governor. The details are to be worked out by a new Traffic Mobility Review Board, but it is essentially a cordon that starts at 60th St, excluding FDR Drive and the West Side Highway. All of the net revenue is to spent on the public transport network, specifically the subway, bus network, the Long Island RailRoad and Metro-North. Private cars are only to be charged once a day, whereas ridehailing/sharing and taxi services are already subject to a surcharge of between US$0.75-US$2.75 per trip, depending on the service since 2 February 2019.  Although Charles Komanoff indicates that the effects will be much less than promised (still a 2.5% increase in average traffic speeds is worthwhile).

Some of the details to be worked out include:

· Charge rates (will they vary by vehicle type)

· Area charge (will vehicles be charged for circulating within the cordon as well as or separately from crossing the cordon)

· Direction of charge (will there be a charge for entering AND exiting the cordon)

· Time of operation

· Variation of charge by time of day

· Discounts and exemptions (it might be fair to assume that emergency vehicles and NYC transit vehicles might be exempt, but will the ride hail/share surcharge liable vehicles be exempt too)

· How those entering lower Manhattan on tolled crossings will be treated

New York is basically implementing a simple charge, primarily to raise revenue for other modes, so it will be interesting to see what impact it has and whether it is designed to spread demand by time of day, as much as it is to raise revenue. It will clearly be a trailblazer, although it is unlikely that other US city has either the density of public transport or geography to lend itself to a relatively simple cordon as the solution.

What about the rest of the US?

San Francisco has studied charging before, and looks like pursuing it again. The San Francisco County Transportation Board Authority voted earlier this year to spend US$0.5m on a study of downtown congestion pricing, suggesting that it has already decided that a downtown cordon is worth pursuing. It will be interesting to see what impacts that might have, and particularly how boundary issues are addressed. The San Francisco Mobility Trends report indicated that "vehicular traffic entering San Francisco grew 27% since 2010, although public transport use also rose 5% and cycling by 6%, on a 9% population increase (indicating that the growth in population is pushing a big increase in driving), with a decrease in private car travel speeds by 23%. It's hardly surprising that pricing access to downtown is a priority, although hopefully it will mean pricing that varies by time of day.

Los Angeles has already had a study released by Southern California Association of Governments (SCAG) which proposed a pilot cordon at Westside LA, for a number of reasons (see page 94 of the below report).

Proposed Westside LA cordon from SCAG study

 The Mobility Go Zone and Pricing Feasibility Study indicated that it could result in a 19% drop in private cars entering charged zones, and a 9% mode shift to public transit, with 7% each to walking and cycling. Whilst this might be a good place to start, LA is going to need a much more comprehensive solution to address congestion across the region. LA Metro is about to launch a study that looks more widely at options, with the intention that pricing would support a package of improvements to public transport and active modes.

Boston, Portland, Seattle and Washington DC are all considering congestion pricing, which has to be welcome. The US has gone through a couple of eras in urban transport policy, from the 1940s to the 1970s the focus was almost entirely on building roads to meet demand. That has tailed off, with a focus from the 1970s of building (mostly rail-based) public transport infrastructure to try to attract motorists from their cars, in other words supplying alternatives. More recently, cycling has had a boost in some cities, but the primary argument in all cities is one of what to supply, rather than how to manage existing demand and supply.

News shorts: Vancouver, Washington State

Vancouver debates a sales tax to pay for transport

Although evidence and professional opinions would suggest that road pricing is the best way forward for Vancouver, it is instead going to hold a referendum on a sales tax that will be hypothecated to pay (primarily) for more public transport.  The tax will be 0.5% on all sales.  The North Shore news reports  that the tax will raise C$250m (US$201m) per annum, at a cost of between C$125 and C$250 per household, depending on which side of the argument you believe.  Of course that includes households that wont use any of the proposed transport projects and those who will use it everyday.  Equity and economic efficiency are thrown out of the door in the quest to raise tax revenue.

Hypothecated general taxes for transport are no more intelligent than such a tax for health or for subsidising farms.  However, it is a question of what can be done politically and legislatively, versus economic rationale.

A better approach would be at least some increase in taxes on owning and operating vehicles, a more rational appraisal of where benefits lie with some of the projects (and then charging accordingly) and looking at expanding tolling.  It is always unclear quite why everyone should pay regardless of their use of the transport network or the benefits they obtain (whether they be users, property owners or businesses).

Ballots will be sent out March 16, and votes must be in by May 29, 2015.  It's none of my business, but I'm hoping for a no.  Sales taxes are very poor ways of raising money for specific purposes, and it is telling that advocates of it clearly don't think they could convince the users of the new infrastructure to contribute much of the capital cost.

Washington state consulting on higher HOV thresholds for HOT lanes

According to the Bothell/Kenmore Reporter, the Washington State Transportation Commission in consulting on tightening up the eligibility for vehicles to use the I-405 HOT lanes that are currently under construction.  The idea being that high-occupancy vehicles (HOVs) will need three occupants to use the new lanes untolled.  This is inconsistent with the current approach to such lanes in the state, whereby two occupants are sufficient. 

I wrote about these lanes before, questioning their financial viability, but now it seems like this move is designed to partially address this.  However, the report indicates that having a three occupant HOV threshold is needed to cover operating costs, re-emphasising my point that new capacity HOT lanes invariably are a form of subsidised new capacity.  Those paying to use the lanes are not paying the capital costs of the capacity, but paying as a market mechanism to manage demand.  That's positive in terms of ensuring a high quality of service (and bearing in mind that users of parallel untolled lanes benefit from the transfer of traffic onto the new lanes), but it is not a solution for funding new capacity.  It appears that the key goal is meet the federal and state guidelines of maintaining a 45mph average speed, and it is more fair to target the HOV users, rather than hiking the tolls.

In terms of pricing the report says:

The recommended average toll for the express lanes will be between 75 cents and $4 at the start of the tolling system. More congested days would fall between $4 and $10, the latter being the maximum and expected only 10 percent of travel days. Seventy-seven percent of trips are expected to be below $1, according to the WSDOT.

As I've said before, I see value in converting underutilised HOV lanes to HOT lanes, and even in considering whether new lanes should be toll lanes.  However, as HOT lanes you leave some users benefiting whilst paying nothing more for vastly improved levels of service.  It is more equitable and financially prudent to simply build them as toll lanes.

Do Washington State's proposed I-405 HOT lanes make sense?

The Herald Net reports that the State of Washington is planning to have HOT lanes either way on the entire length of I-405 between Lynnwood and the I-5, effectively meaning that Seattle's major western bypass will have an express lane capability.  All the details are in this report on the WSDOT website.

The northern portion is already under construction from Lynnwood to Bellevue, with US$334 million being spent converting existing "car pool" lanes (HOV lanes) into HOT lanes, with that project expected to be completed in 2015.  However, funding is yet to be approved from Bellevue to SR-167 (which already has dynamically priced HOT lanes), as this would require new lanes and would cost US$1.1 billion.

I-405 Washington HOT lanes

In the map image above, green depicts the lanes already under construction between Lynnwood and Bellevue, blue being the proposed new lanes, and yellow the SR-167 lanes.

There are several interesting dimensions to the report.  It recommends that the conventional two-person HOV requirement only entitle motorists to free access during off peak times, with a minimum three-person HOV during peaks.  That's an interesting, albeit complex for enforcement, way of rationing road space for the HOV component of users.

Pricing will be dependent on how many sectors are used, with an initial price of US$0.50 for each sector (Lynnwood to Bellevue being one, Bellevue to Renton being the next, followed by Renton-Pacific.  The expectation is that dynamic pricing would be introduced as well.

The automatic question is surely, why can't the lanes pay for themselves?  The report claims that only US$215 million of the US$1.1 billion capital cost can come from tolls, with the rest sought from the "gas tax".   

News briefs - Australia, China, USA (California, Texas, Washington)

Australia - CEO of South Australian borough calls for congestion pricing

Unley is one of the boroughs of Adelaide and according to the Herald Sun, the Unley Council  Chief Executive, Peter Tsokas has proposed to the South Australian State Government, that congestion charging be introduced to raise revenue for public transport.  He specifically called for charges on some roads at peak times to manage congestion.  The reaction has been negative from the Royal Automobile Association of South Australia, although not completely dismissive:

Automotive policy manager Mark Borlace said congestion charges were more suitable in heavily gridlocked traffic zones.  He said the priorities for Adelaide should be improving traffic flow on the city rim, upgrading the north-south transit corridor and improving public transport connections. "When you know that people have ways of going around the congested areas where you don't want cars, then you can have those kind of behavioural things (such as congestion charging)," 

A South Australian state government spokewoman said the government was opposed to tolls and congestion charging.  It's notable that all of the comments under the article were anti congestion charging, except for one that advocated tolling for a new road as long as the toll paid for the road and ended after the debts for constructing the road were paid.

Of course, any debate about congestion charging in Adelaide ought also to include whether it would be an option to replace some existing taxes.

China - Future for congestion charging

Charles Komanoff writes in Streetsblog about his view on where congestion pricing might head in China.   He notes rightly that air pollution is as much an issue as congestion, but revenue generation is not important.

However, the key problems China faces in implementation are around the vested interests and potential losers from any sort of implementation. China needs a comprehensive strategic approach to how road vehicles are taxed and charged, which simply doesn't exists at present.  A key part of this is having the legal framework to enforce any fines or violation notices in a country where traffic safety violation enforcement is haphazard at best.

China has a long way to go, and it could do worse than encourage Hong Kong to implement one of the options extensively studied well over a decade ago, and to encourage at least one mainland city to introduce a cordon charge.

California - Orange County rejects tolling new lanes on I-405

Further to the post I wrote in December on this,  Orange County voted to add an additional lane to the I-405, but rejecting tolling according to the LA Times. It appears that there was little argument made about making highway expansion more sustainable and efficient, but rather that because improvements are partly funded out of a sales tax (don't ask, it's a weird socialist concept that some in the US adopt of dedicated taxes on retail activity to pay for roads).  Voice of OC describes the rather shallow debate.  Whereas NBC reports that the new lanes will cost around US$700 million, which of course will come predominantly not from those using them or directly benefiting from them.  

Texas - HOT lane fines unenforceable

Associated Press, carried by The Trucker, reports that  Houston Metro has no means to legally force non-compliant motorists to pay fines.  Apparently US$740,000 in fines have been issued, but although violators are notified three times of the fines and asked to pay, there is no legal means to enforce it.

This is absolutely laughable as a public policy failure.  Questions ought to be asked.  Who approved for such lanes to be introduced without a legal means to enforce violations?  Was it an oversight by policy makers, or did politicians ignore warnings and decide to press on regardless?  Is this a case of a system being introduced designed by engineers, without advice from lawyers or policy consultants?

Given this is now news, I wouldn't be surprised if, within a few months, the lanes prove to be an abject failure when it becomes well known that the fines are simply requests to pay with no means to do anything about it.

Enforcement is a core component of any electronic free flow tolling system, and needs to include the legal means to treat non-payment of tolls, and fines, as debts that can be recovered like any others.  At the very least, it seems absurd that such fines can't be treated as a penalty for trespass - for unauthorised usage of HOT lanes might be seen as such, if the law would properly define it.

Meanwhile, a report from local TV station KFox14 in El Paso notes that the new toll lanes on the Border Highway are not physically separated from the untolled lanes, but separated by double white lines.  This raises concerns that some road users will weave to avoid detection in the lanes and weave back across the lines, but the answer to this is to enforce the existing prohibition on crossing double white lines on the road. Enforcement of that law is expected to effectively enforce the separate toll lanes.   Hopefully, this should work if done resolutely and sufficiently.

USA - Trucking lobby sceptical about distance based taxation

I read with some amusement an article in The Trucker.Com commenting about Oregon's plans to introduce a vehicle mileage tax.  The key points being:

The American Trucknig Association being concerned about "collection costs, privacy and information security issues, significant potential for evasion and various very difficult institutional issues, including the potential for a lack of interstate interoperability".  Given almost all of these issues are resolvable, I think there may be a bigger concern that the charges set will inevitably mean the heaviest trucks travelling the longest distances will pay more.  The problem is that there is little evidence in the US as to whether there is an appropriate recovery of infrastructure costs now.

What is needed is not resistance, but a reasoned economic debate about the true infrastructure costs of highways and how to efficiently allocate those costs among types of vehicles.  Sadly in the US there is precious little decent analysis about this, and insufficient political will to let charges for road use be based on objective values.  

Washington - State discusses options for future revenues

The Kent Reporter notes that the Washington State Transportation Commission is completing an evaluation of the business case for ways to replace the gas tax with a road usage charge system.

It is intended to report in January 2014 about options to move forward with charging vehicles according to how much they use the roads, rather than fuel, with this work being informed substantially by the trials underway in Oregon.  The findings of work done so far can be found in this presentation, which outlines the key issues very well.  According to this paper, the final report will be issued on 11 January.

Seattle's SR520 toll reduces overall traffic volumes

Famous US political journalist and commentator, Michael Kinsley, writes in the LA Times about the SR520 bridge toll that I reported on last year here (noting the congestion pricing that has since been applied), with this interesting statistic:

Since the toll was imposed, traffic on the toll bridge has dropped about 40%, while traffic on the free bridge has risen 10%. Overall traffic to and from the east side has dropped about 6%. 

Of course, the main point of his article isn’t about the traffic or economic implications about it, he’s being philosophical about it as an example, saying it makes society less egalitarian because people can pay to avoid congestion. I’m not going to engage on that, except to say that I’m sure he’s flown in premium cabins on airlines happily bypassing queues at airport check-in and boarding, and people pay for TV, pay for valet parking, pay for the best seats in theatres etc, and he doesn’t seem to mind that. Indeed, the SR520 toll is to help pay for the replacement bridge.

The interesting result is that a 40% drop of traffic on one bridge (with two lanes each way) has resulted in only a 10% increase on the other bridge (with three lanes each way excluding the reversible two HOT lanes on the I-90 bridge), resulting in a 6% overall reduction in crossings.  The report I blogged about last year predicted a 50% reduction.

What this demonstrates is that the toll has made more motorists think about whether driving is the correct option (I don’t have figures for public transit use) or whether people consolidate trips, travelling less when faced with paying the cost of the infrastructure they use. In either case, it shows that tolling one route whilst leaving another free does not just result in a 1 for 1 diversion, it does mean that there is some trip suppression and some mode shift. 

As I said before, what's particularly interesting is that congestion pricing has been introduced on the SR520 bridge.  The effect of this means different patterns of behaviour change, with more mode shift and trip suppression likely at peaks than other times (and no toll overnight).

For cities considering tolls on one crossing but not another, it may be an  interesting case study because the automatic concern will be gridlocking the other bridge.  In this case, the other bridge also has a tolled alternative in the form of express lanes. The simple response to congestion concerns is that users of either crossing have uncongested options, and a free one.   Washington State has introduced tolls on SR520 for financial reasons, but has cleverly designed it to also maximise efficient utility of the crossing as well.  

Vote No on Initiative 1125 if you support better road pricing

I don't have a particular personal interest in the State of Washington, since I've never actually been there.  However, I do have an interest in good public policy on road pricing.  Initiative 1125, which comes up for a vote on 8 November, is not an example of this.

It is being promoted by activist Tim Eyman, who frankly has taken stands on a number of issues that I would support, since I tend to be in favour of free market oriented solutions and prefer to err on the side of less government intervention over more.   However, as I have written before, I believe on balance, that while i understand his motives, on this occasion, he is wrong.

In September I said Initiative 1125 had good intentions.  I can understand not wanting money collected from road users to be spent on anything other than the roads themselves, but to clumsily only link tolls to the projects they are specifically on limits what can be done to replace fuel taxes over time.  Ultimately, I believe tolls of one form or another, will be applied to all major roads and perhaps all roads, as fuel tax becomes unsustainable.  This initiative would block that.  Similarly, the idea that a road is "paid off" and no longer needs to be paid for, doesn't really bear close scrutiny.

The key problem being that roads always need new capital put into them to be operational.  It is like building a house and assuming you never need to paint it, fix the roof, fix gutters, replace pilings or the like over time.   The setting of tolls should take into account recover of capital for long and short life assets, bearing in mind renewals will eventually be needed for major assets such as bridges.  It is a failure to consider roads like other assets that has seen so many bridges fall into disrepair.  

Beyond that is to consider congestion pricing, and what to do with surpluses from tolls.  The advantages of congestion pricing in terms of improving productivity, reducing delays and emissions are potentially enormous.  Initiative 1125 would stop this because the revenue wouldn't be spent on the roads subject to congestion pricing.  Even if you support using congestion pricing to engage in wider tax reform (e.g. replacing other taxes for money used to spend on road), it wouldn't be allowed.

He could have stuck to the first provision of the initiative (Prohibit state government from diverting gas taxes and toll revenues in the motor vehicle fund or other funds to the general fund or other funds and used for non-transportation purposes”), and I would not have found it problematic, but the rest makes it unacceptable.

The Olympian reports:

This is a typical Eyman initiative that overreaches and attempts to tackle multiple issues with a single initiative. By cluttering I-1125 with multiple requirements, Eyman has torpedoed his own effort. Toll rates should be set as close to the users as possible, not by lawmakers trading political favors in Olympia.

The Yes campaign website says tolls should only be used for "capital costs", presuming capital costs cease to exist at some point.  It seems to suggest congestion pricing is "politically correct social engineering designed to raise the congestion misery index high enough to force you out of your car."  Nothing is more politically correct than running roads in the traditional Soviet style manner of taxing users on an equivalent basis.   However, while I have some sympathy for those who question spending large amounts of money raised from road users on politically driven, financially unsustainable and economically inefficient public transport projects (and road projects), this initiative not only doesn't deliver for supporters of more market oriented approaches to roads, but is positively contrary to it.  Some of what the yes campaign says I agree with, but the ends do not justify the means, and the means are contrary to the philosophy driving the ends.

So while the No campaign looks like primarily a campaign from labor unions, Democrats and environmental groups, it should also be supported by those who believe in more economically rational pricing of roads and indeed may even interfere with privately owned toll roads if they were to be built.

So although I have some reservations about opposing the initiative, I believe those who DO support better pricing of roads, who think fuel tax is a poor way of pricing for road use and think tolls, HOT lanes, congestion pricing and ultimately network wide pricing are worthy tools for the future, should reject Initiative 1125.  Boeing and Microsoft already are opposing it.

Initiative 1125 is being returned by postal ballot by 8 November, it is one of several other ballots on the day.

Fear that tolling Columbia River Crossing will result in excessive diversion

CRC in blue adjacent to I-5, I-205 is upstream on the right

The news of the 50% reduction in traffic expected on SR 520 in Seattle from tolls has caused concerns in Oregon that the proposed tolled Columbia River Crossing project (which will replace the current over 95 year old "bridge lift" equipped bridge that forms Interstate 5 connecting Oregon with Washington) will suffer a major diversion of traffic to Interstate 205's Glenn L. Jackson Memorial Bridge some 6 miles upstream. 

The Columbian reports some concerns that estimates of toll revenue (neither route is currently tolled) are excessive and cites the expected 50% diversion in Seattle as likely for Oregon.   It claims the 2009 toll study only predicted diversion of less than 10% by 2030.

The bridge is estimated to cost between US$3.1 and $3.5 billion (including a light rail extension), with about a third coming from tolls, a third from the Federal Government and the rest from both Washington and Oregon State Governments.

Tolls are to be electronic free flow using DSRC and ANPR, with peak congestion based charges.  Curiously it has a break down of revenue and expenditure (although toll rates are not defined yet) of:

91% revenue from tolls, 9% from surcharges on ANPR based transactions.

69% of expenditure is to be available to service debt on the bridge, 23% pays for toll collection costs and systems maintenance, 5% are "uncollectable tolls" (written off), 3% paying credit card fees and 1% for operations and maintenance of the bridge.

It appears to be a very high cost of collection, something that ought to be seriously reduced over time. I'd hope that 26% toll collection costs should easily be half that within 3-5 years.

However, it will be fair to assume that there will be substantial diversion in the initial years.   What it will take to minimise this is for tolls to be at lower prices initially whilst accounts are opened up and people get used to free flow tolling when neither state has much experience of it (and people in Portland are to be expected to become familiar with it).  The effort taken on the customer service end for the first year will be well worthwhile.

Tolls on Seattle SR 520 will "halve demand" says study

I wrote recently about the proposed tolls on the SR 520 floating bridge in Seattle.  The bridge is to be replaced, with tolls imposed on the current bridge to help fund the work.

SR520 in blue will be tolled. I90 beneath it will not be tolled

Now the Seattle Times reports on the study compiled to prepare construction bonds for the project which claims that traffic will drop from around 100,000 vehicles a day to around 52,000.  The reduction is due to some suppressed trips, mode shift to public transport and diversion to Interstate route 90.   So the tolling will effectively deal to congestion, with traffic levels not returning to pre-toll levels until 2032.  The tolls will pay back a US$1 billion bond (total cost is US$4.65 billion for the bridge) and generate more than enough revenue to support it.

Curiously, the report also states that if equivalent tolls are placed on the I-90, then toll revenues on SR 520 increase by 38% - because the diversionary route is no longer more attractive.  State Treasurer Jim McIntire is confident that toll revenue will support the proposed bonds.   It's worth also remembering that the proposed tolls in include congestion pricing at peak times, a trend that is appearing more regularly on new toll facilities in the US, and a very welcome one to aid sustainable use of the infrastructure and to maximise revenues.

Seattle's SR 520 floating bridge to have congestion pricing tolls

In December 2011, the existing "Governor Albert D. Rosellini Bridge—Evergreen Point", in Seattle, will have tolls reinstated. The original bridge was built in 1963, with the toll removed in 1979. It is the longest floating bridge in the world being over 2.2km long and it reaching the end of its useful life. It closes in high winds and is at risk of collapse in an earthquake. It currently carries around 115,000 vehicles a day.   Vehicles using the current bridge will be untolled until the new bridge opens (and tolls will be instituted on that bridge).

Seattle's floating bridge (blue) connects the city with Redmond

A new bridge is to be built with six lanes, two of which are for bus rapid transit and HOVs, maintaining the general traffic capacity of the current bridge. It is currently a major bottleneck and curiously features peak travel in the direction AWAY from Seattle during each peak, because it is the best route to Redmond - the home of Microsoft.  It will cost $4.65 billion.

Tolling is intended to be fully electronic free flow using the DSRC system branded "Good to Go" by the Washington State DOT (using the long standing 915MHz technology).  

Vehicles without a "Good to Go" tag will be expected to pay within 72 hours, or receive a bill through their address identified through automatic number plate recognition.   Customers have a choice between having the prepaid tag, registering as a number plate customer, or simply waiting to get a bill in the mail (the latter costs an additional $1.50 per trip).  Outlets for "Good to Go" include online (a tag is sent in the post), retail outlets and customer service centres.  All options, except setting up an account at a customer service centre (where cash is allowed) require credit or debit cards, or bank account details.  Accounts must be opened with a prepaid balance of $30 with top ups required when balances drop below $8.

However, there has been some trouble with the installation of the toll system on the existing bridge.  The Seattle Times reports that Texas based Electronic Transaction Consultants have faced some difficulties, having promoted early sign ups to "Good to Go" earlier this year, but being then it "ran into problems, both with sluggish customer service and with the technical challenges of counting tolled trips and merging those into a new statewide toll-accounting system". It has had $2 million deducted from its contract worth $23 million for the delays.   The company claims it is unusually complicated because it is integrating with "Good to Go" which is run by the state for two other toll facilities.

Besides the point of tolling an existing old bridge to pay for a new one, what else is interesting is that the tolls wont be a standard flat rate.   The rates will vary as follows (for cars with tag accounts):

 WEEKDAYS

midnight-5am                   Free

5am-6am                           $1.60

6am-7am                           $2.80

7am-9am                           $3.50

9am-10am                         $2.80

10am-2pm                         $2.25

2pm-3pm                           $2.80

3pm-6pm                           $3.50

6pm-7pm                           $2.80

7pm-9pm                           $2.25

9pm-11pm                         $1.60

11pm-midnight                  Free

WEEKENDS

midnight-5am                     Free

5am-8am                             $1.10

8am-11am                           $1.65

11am-6pm                           $2.20

6pm-9pm                             $1.65

9pm-11pm                           $1.10

11pm-midnight                    Free

As you can see, it shows some interesting demand patterns.  I wonder if motorists will understand that degree of complexity at first, but the pricing itself is quite elegant.  Timed to manage any bunching of demand either side of the peaks and during the day.  Weekends are more interesting, with the higher rate matching steady day time demand. 

What this means, of course, is that Seattle is getting congestion charging, albeit on the tolls on this one crossing.  It looks sophisticated from an economic point of view, and the bus rapid transit system will offer an alternative for some.   I will look forward to see how the tolling affects congestion on the existing bridge as a prelude to what may happen when the new one is built.

Washington state toll referendum threatens funding for SR-520 bridge replacement

Seattle PI reports that Initiative 1125, a proposed referendum on severely restricting the use of tolls in the state of Washington, would interfere with the funding for a number of projects according to the State Office of Financial Management.

Some of the effects would be:

- To block use of toll revenue from Interstate 90 to help pay for rebuilding the neighbouring SR-520 bridge;

- To have toll rates set by legislation rather than by the State Transportation Commission;

- To eliminate any potential options for congestion pricing;

- To puts at risk $123 million in Federal funding, secured for the S.R. 520 project, because congestion pricing could not be considered;

- To risk blocking the Alaskan Way Viaduct replacement tunnel because it too includes congestion pricing.

I reported earlier on Initiative 1125 and concluded that, on balance, it would be negative:

It is tempting to stop politicians using tolls as an easy tax to divert from motorists, but it also doesn’t make sense to be ridiculously prescriptive in ways that don’t reflect good economic principles. I can understand imposing a restriction on a hypothecated fund to spend money on roads, and for tolling to be related to the costs of the roads tolled, and be spent on the network of the entity tolling. However, to restrict time and purpose of toll revenue spending is unduly restrictive...it would be wrong for this initiative to pass, because it is better to sacrifice improvements in one area to avoid a significant deterioration in the law on tolling in another.

This simply strengthens my view on this. There are sound reasons for putting some constraints around the use of tolls for non-road purposes, this initiative does far more than that and risks damaging the value of tolling for the State of Washington.

Congestion reduction fee in Seattle is not what it sounds like

When I read that King County Council had agreed to impose a “congestion reduction fee” on vehicles in Seattle, I thought it might have been some sort of congestion pricing. It isn’t.

It is a two year vehicle licencing tax of $20, collected to help fund subsidies for the county’s bus service. It is no different than regular annual vehicle licensing fees in other jurisdictions.

The report in the Ballard News Tribune states that a number of measures are to be introduced to contain the bus subsidies, including abolishing free travel downtown.

Congestion reduction though? No. It wont change driving habits, it will have an ever so tiny impact on car ownership, and wont reduce congestion at all. It is simply a straight out subsidy from vehicle owners to bus users, and employees of the bus operation. It is a simple tax, but bears no relationship whatsoever to congestion, or to reduce negative externalities from car use. Let’s not call it something that it is not.

Seattle's toll tunnel to replace untolled viaduct (UPDATED)

Route of the tunnel

Those unfamiliar with the story of the Alaskan Way Viaduct should read this. In summary, this viaduct is a six-lane part of Washington State Route 99 running along the Seattle waterfront. It was damaged in the 2001 Nisqually Earthquake and faced either needing to be repaired or replaced. Replacement was to cost up to US$3.5 billion, but as the viaduct runs along the waterfront of the city, it was seen as a chance to do something different (don’t ask why it wasn’t insured like any privately owned infrastructure). The options narrowed down to a bored tunnel or a surface street option.

Environmentalists argued, remarkably, that it would be better to demolish the viaduct and not replace it, so that traffic would be pushing through surface streets. The presumption is that the resulting severe congestion would simply deter many from driving and so have a positive impact – except of course for those who DO need to use the route (even buses and trucks), and anyone walking, cycling, working or living along the surface route. A clear case of local environmental gains being overridden by those wanting to wage a war against road traffic.  Indeed they even argued that the tolled tunnel would be no better on the streets that just demolishing the viaduct and routing traffic through town.

SR 99 tunnel, two lanes stacked

A postal referendum on the options came out in favour of the tunnel, which is an innovative stacked tube design as seen here. 

So the state has signed a construction contract to break ground on a $2 billion, 1.7-mile tunnel from Sodo to South Lake Union in September, to replace the Viaduct by 2016.

The problem with the tunnel is that as it will be tolled (and be four lanes whilst the viaduct is six lanes), and the environmental-impact statement claims that some 40,000 to 45,000 cars a day as drivers dodge a cost of anywhere from $1 overnight to $5 in the southbound afternoon peak. Yes, the tolled tunnel would have peak congestion pricing to manage demand. The state predicts that by 2030, about 57,000 cars would pass through the tunnel each day under the current proposed tolling plan, compared with 93,000 if the tunnel wasn't tolled at all. The city may gain a waterfront, but will also gain more downtown traffic. The question may yet be raised as to whether downtown congestion pricing might be a useful strategy to limit this, indeed the environmentalists might be better focused on that, now that an effective bypass is to be built.  

Traffic on the highway has been largely static in the last decade, hovering around 110,000 daily trips near Seneca Street, or 63,000 through the Battery Street Tunnel.

According to the Seattle Times, Highway 99 project Administrator Ron Paananen claims that the tunnel project, with a widened Alaskan Way south of the ferry terminal “preserves similar overall capacity to the current viaduct”. The FHWA has also signed off on the option.

Seattle isn’t unfamiliar with tolls, with the following existing projects:

- Tacoma Narrows Bridge;

- SR 520 bridge replacement (tolls starting in December); and

- SR 167 HOT lanes.

Big inner city toll tunnels are a modern solution to getting major traffic to bypass built up areas. They are not cheap, but they are permanent and make an enormous difference to traffic flows and the local environment. I wish Seattle the very best with this project and hope the traffic management and design for the surface routes is good enough to balance the needs for traffic and the desire to unlock the value of the land along the waterfront that will be freed up by removal of the viaduct.

Tolling will be electronic free flow and the pricing will need to be attractive enough to appeal to a majority of the existing users of the viaduct.

Full details on the project, including a cost breakdown are here.

UPDATE:  Useful details provided in the comments below, a key point being that much of the current traffic on the viaduct is entering and exiting the downtown.  The tunnel will be simply a bypass, so in fact it will be providing tolled capacity only for those bypassing, the existing streets will have to manage (with some widening work), begging the obvious question as to whether congestion pricing might be helpful?

Washington State Initiative 1125 - good intentions marred by unrealistic complexity

According to The NewsPaper, there will be a vote in November in Washington State, USA, on Initiative 1125. The referendum will require a yes vote for a negative proposition that “no revenue in the motor vehicle fund or toll fund could be used for non-transportation purposes”. Now it looks on the face of it like a great initiative for motorists, particularly since it avoids diverting such revenues to top up other funds. However, when you get into the detail it contains some flaws.

The proposals are:

- “Prohibit state government from diverting gas taxes and toll revenues in the motor vehicle fund or other funds to the general fund or other funds and used for non-transportation purposes”. 

Now I can go along with that, given it is about specific funds and revenues from road users. The case for diverting such funds for non-transport purposes is weak in an environment of publicly owned conventional toll projects. Indeed, it might strengthen the case for tolls. 

- “Prohibit state government from transferring or using gastax-funded or toll-revenue-funded lanes on state highways for nonhighway purposes”. 

This is not exactly grammatical, but I infer from it that it means not allowing revenue raised from toll lanes or indeed gas tax on state highways to be spent for “non highway” purposes. If it means not spending on other roads, I wouldn’t be supportive of that because there are plenty of instances where it is sensible to cross subsidise parallel routes, feeder routes or bridges over major highways. This is clumsy and its objective isn’t clear.  I am unsure as to what it adds to the above provision, other than confusion.

- “Require tolls to be dedicated to the project they’re paying for, ending such tolls when the project is completed, and only allowing tolls to be used for purposes consistent with the 18th Amendment to the Washington Constitution. Tolls on a project must be spent on that project and may not be diverted and spent on other things (allowing tolls to be imposed on anyone and spent on anything stops them from being tolls and makes them into de facto taxes)”. 

This is where it really gets unstuck. The myth that a road is ever “paid for” and that after the initial capital expenditure has been recovered, no more capital ever need be put into the road. It’s nonsense. The surface, road furniture and the like regularly need replacing and renewal, the base layers will eventually need renewal, and bridges will as well. Only the land and the earthworks for the original right of way are “permanent”, the rest of the road needs regular injections of capital. So this doesn’t exactly reflect economic reality. If it said tolls should be based on recovering the long run costs of capital and operating costs of the road, I’d be more inclined to agree. However, to confine tolls in time does not make sense. The counter-factual is not that “tolls be imposed on anyone and spent on anything”, but that they be introduced on a network basis. 

How would a system like the German truck tolls manage under this? Revenue from the entire motorway network and some highways would need to be directed to the exact roads charged in proportion to the revenue raised? No other utility network is that precise. Rail, telecommunication and electricity network providers engage in pricing that reflects network costs and spend money across a network, not just revenue raised on individual components, although there may be some review of costs and revenues at such levels where it makes sense. I understand the purpose, but I don't think it is economically efficient or reflects economic reality, but rather a widely held misperception that treats roads unlike any other capital assets. 

It is tempting to stop politicians using tolls as an easy tax to divert from motorists, but it also doesn’t make sense to be ridiculously prescriptive in ways that don’t reflect good economic principles. I can understand imposing a restriction on a hypothecated fund to spend money on roads, and for tolling to be related to the costs of the roads tolled, and be spent on the network of the entity tolling. However, to restrict time and purpose of toll revenue spending is unduly restrictive. For example, toll revenue needs to be spent on running the toll system itself, or may be spent on a common toll system for multiple roads, which may be in breach of the third proposal. While I am no great fan of tolling be used to fund public transport, I am also not a fan of tolling being prescribed to specific conditions that would limit it scope inefficiently.

It’s a shame. It is good to have public engagement on these issues, but it would be wrong for this initiative to pass, because it is better to sacrifice improvements in one area to avoid a significant deterioration in the law on tolling in another.

Washington considers conversion of Seattle tidal lanes to HOT lanes

Interstate 5 within Seattle has just over 7 miles of tidal flow (reversible) lanes. The lanes operate southbound towards Seattle in the morning (5am-11am) and northbound in the afternoon (noon-11pm) (but are closed to reduce noise for residents near the Ship Canal during the night). The lanes operate from downtown Seattle to Northgate Mall. They are not tolled, but do have an HOV lane.

Map of I-5 express lanes in Seattle

The Seattle Times is reporting that the State of Washington is considering converting all of the express lanes to HOT lanes. This would mean that vehicles could only access the lanes if there was occupancy of 3+ or a toll is paid. It would require a law change and the report indicated that:

“Tolls might begin in five years, and vary from $1.55 midday to $4.30 in the morning peak or $5.50 in afternoon peak, in 2016 dollars.”

The intention is to raise revenue to support maintenance of the highway, which is apparently urgently needed, but the obvious impact will be to increase traffic on the I-5 parallel non-express lanes (which are only different in that they are part of the main highway and the interchanges along it).

The intention is that any toll would be collected using a DSRC type system, which can easily be implemented. What it shows is that the revenue squeeze for transport authorities is causing them to think how they may better use precious scarce road space, manage it effectively and have users pay for the capital tied up in such infrastructure. This HOT lane conversion is unlike all others which have involved conversions from HOV lanes.

Washington State will need to get this considered carefully, in part to ensure the costs of collection and enforcement can be optimised, but also the economic effects of the diversion onto the uncharged lanes (and the long run benefits of optimised maintenance and a long term programme to improve levels of service on the I-5). However, it will be good for other states to notice this innovative approach, and for the Federal Government to positively support it.