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Value Pricing for Transportation in Washington_ D.C

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					Value Pricing for Transportation
in Washington, D.C.
           Martin Wachs, Director
     Institute of Transportation Studies
      University of California, Berkeley
What is Value Pricing?
 Use of prices, charges and fees for traveling in
  order to produce needed revenue and
  simultaneously to influence travel behavior so
  that travelers make decisions that use highway &
  transit systems more efficiently and equitably
Value Pricing in Transportation
is Not New
 Toll Roads in US
 Used Extensively by Air Lines
 Already Exists to Some Extent on Public Transit
 In Use in Singapore, Five Cities in Norway,
  California, and London
 Historically, Was Preferred to the Gas Tax;
  Second Best approach was adopted
Value Pricing Works…Evidence
from Parking
 Employer-Paid Parking is Very Common in US
 Ten Mile Journey = Twenty Mile Round Trip
 Roughly One Gallon of Gas
 If Parking Costs More than Two Dollars/Day,
  Employer-Paid Parking is Worth more than Free
  Gas
Average Among Seven Cases in
USA & Canada
Drive Alone Share to work:
      67% when employer pays for parking
      42% when worker pays for parking

Cars Driven to Work per 100 Employees:
     72 when employer pays for parking
     53 when worker pays for parking
8 Cases of Parking Cashout in
Santa Monica, California
 Cars Driven alone to work:   Before = 75%; After
  = 63%; Difference = 13%

 Vehicle Trips per employee per day: Before =
  0.82; After = 0.73; Difference = 11%

 VMT per Employee per year:    Before = 5,348;
  After = 4,697; Difference = 12%
Value Pricing is No Panacea; but
Better than Many Alternatives
 Construction of Many New Expressways which are not
  priced?
 Construction of Rail Lines; Expensive?
 Command & Control Measures?
      Rules like Truck Restrictions
      Odd/Even Rationing
      Converting Lanes to HOV Use
   (Heavy Fines and Police Requirements)
Pricing Is Better Because:
 It allows travelers more choices, not fewer
 Complements Land Use Policies
 Allows Highway & Transit to be Managed
  Rationally & Systematically Together
 Produces Needed Revenue while Managing
  Traffic Flow More Effectively
But is Value Pricing Equitable?
 Compared with what?
 Are higher fuel taxes and traffic jams MORE
  equitable?
 Many alternatives are less equitable on their
  face…..sales taxes?
 Depends on the use of the revenues?
 Equity can be a red herring/ Ask who is
  complaining
Value Pricing Needed As a
Source of Revenue
Motor Fuel Taxes are falling short as a source of
  revenue
Resistance to Raising Motor Fuel Taxes DOES
  NOT Eliminate the Need to Finance Highways
  and Transit
The Alternatives, Like Voter-Approved Sales Tax
  Measures, Are Less Equitable and Less Efficient
Motor Fuel Taxes
 Usually expressed as “Cents per Gallon”
 Must be raised by act of legislature
 Revenue does not rise automatically with
  inflation as does income tax or sales tax
 Improving Fuel Economy lowers revenue per
  mile of driving
 Revenue declining precipitously in relation to
  VMT
Fuel Tax Changes, 1957-2002
 Average of Fifty States


 State Fuel Tax in 1957:             5.7 cents/gal
 If adjusted for inflation to 2002: 31.0 cents/gal
 Actual current fuel tax:           20.3 cents/gal
 Difference:                         10.7 cents/gal
Change in Combined State &
Federal Fuel Taxes
 Change from 1957 to 2002 in Constant 2002
  Dollars per VMT:

     District of Columbia:     -38.4%
     Maryland:                -32.8%
     Virginia:                -42.4%
But Costs Keep Rising
 Engineering Newsrecord General Construction
  Cost Index Increased During Same Time Period
  (1957-2002) by:


                 807 %
Quiet Revolution Under Way
 State legislatures reluctant to raise user fees
 Increasingly reluctant to directly raise fees or
  taxes at all
 Putting measures on ballot for voters to enact
  instead of taking action in legislatures
Changes in State & Local
Transportation Revenue,1995-99
                     Billion$/Year   % Change
 State User Fees        36.2-42.7      + 18%
 Local Property Taxes 5.2-6.4          + 22%
 Local General Funds 12.3-15.9          + 29%
 Other State Taxes         6.6-8.6     + 30%
 State/Local Sales Taxes 4.5-7.1       + 58%
 State Borrowing           4.3-8.3      + 92%
Change is Happening Quickly
   44 Transportation Finance Ballot Measures in the US in
    Calendar Year 2002

   32 Local or Regional      9 Statewide

 20 Dealt with Sales Taxes
 5 Property Taxes         1 Gasoline Tax
 9 Bond Issues
 Just about half passed and half failed
Change in Direction of
Unsustainability
 Sales Taxes is Less Equitable
 Reduces incentives to use system efficiently
 No penalty for creating congestion or using
  resources
 No linkage between use of system and payment
  for it
 Borrowing requires other tax increases later
Counter-trend Also Underway in
US and Elsewhere
 Electronic Toll Collection on Bridges and
  Tunnels; Suggests principal means of charging
  for transportation after fuel tax fades away
 Using GPSS and Monitors in Vehicles to Levy
  Tolls Based on Time and Place of Use
 Introduction in USA of Projects and Programs
  based on User Fees which contribute to
  sustainability
Examples of Fees & Charges
Contributing to Sustainability
 Florida Toll Road Policy
 HOT Lanes in California: SR91 and I-15 Have
  Proven Extremely Popular Among Users
 Truck Use Fees in Holland, Germany, and other
  European Countries
 Congestion Pricing in London leading to a
  change in Attitudes among Politicians
Concluding Remarks
 Legislators and Transportation Interest Groups
  (e.g. Trucking Associations, Automobile Clubs)
  after years of opposing increased use of prices,
  fees, and charges to promote sustainability
  seem to be more accepting of the concept.
 Promoters of these Concepts Need to Act Now

				
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posted:5/10/2013
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