Philbrick: Paying for transportation infrastructure

Miles of bumpers and brake lights. Impassable traffic jams. These daily sights on urban highways may feel inescapable, but many of these issues would improve or resolve with some serious transportation infrastructure repair.

California road conditions rank among the worst in the nation, and the Bay Area and Southern California are the second and third most congested urban areas nationwide. Poor road and traffic conditions lead to increased vehicle maintenance costs, delays caused by traffic jams and collisions that threaten public safety.

These conditions cost Californians $61 billion each year, meaning improvements are critical to the state’s economic health and safety. The rest of the nation fairs no better; the I-35 bridge collapse in 2007 and the recent shutdown of Interstate 40 between Memphis and Arkansas over metal fatigue highlights the severity of the situation.

The state of our infrastructure jeopardizes the safety, mobility and economic vitality of our nation. But for years, little progress has been made on how to pay for billions in deferred maintenance. The federal gas tax was last raised in 1993 and due to increasing fuel efficiency, vehicle electrification and inflation, purchasing power has steadily declined and will continue to do so. The federal gas tax is not indexed to inflation, thus the purchasing power of the 18.4 cents per gallon tax is now worth about 10 cents per gallon when adjusted to inflation.

California faces a vital crossroads. The short-term strategy of increasing fuel taxes may ultimately become irrelevant and ineffective with the widespread adoption of electric vehicles. We could mortgage our future and finance transportation investments through bonds or other measures, a more practical but long and winding choice. Or we could develop a replacement revenue source, such as road pricing.

But not all pricing schemes are the same. Each pricing option comes with its own policy opportunities and challenges. A few commonly discussed proposals include:

• Cordon or area pricing that charges drivers when they enter, exit or drive within a specific area or zone. London employs this type of policy and charges motorists £15 (approximately $21) for vehicles entering the center city congestion charge zone from 7 a.m. to 10 p.m. every day except December 25.
• Distance-based pricing that charges drivers based on their distance driven. Orange County toll roads employ a variation of distance-based pricing—the longer drivers drive, the more they pay.
• Fixed or flat-rate pricing that charges drivers a set price to use a bridge, tunnel or highway. An example of this type of policy is that flat rate $6 toll for 2-axle vehicles on many Bay Area bridges.
• Dynamic or congestion pricing that charges drivers a variable fee based on congestion, to minimize traffic delays. Before the pandemic, the Bay Area Toll Authority previously had congestion pricing on the Bay Bridge charging $5 during off-peak periods (M-F 10 a.m. to 3 p.m., 7 p.m. overnight to 5 a.m.) and $7 during peak periods (M-F 5-10 a.m. and 3-7 p.m.).
• Managed or high-occupancy toll lanes that charge lower occupancy vehicles for access to high-occupancy vehicle lanes, typically with the goal of using underutilized lane capacity and improving highway performance. An example of this type of policy is the express lanes being rolled out across many Bay Area freeways by the Metropolitan Transportation Commission (e.g., I-680 southbound from Pleasanton to Milpitas and SR-237 between Milpitas and San Jose).

Regions can choose from several different pricing strategies, and some can employ more than one. Another reason to use pricing is to make driving more expensive and less appealing to help more effectively manage supply and demand.

Road pricing is not new for Bay Area residents. In fact, tolls have been charged on Bay Area bridges since 1926, with some variations over the years. For example, the Bay Area has gone through periods of charging tolls in both directions, adding tolls based on the number of passengers (and even animals) in vehicles.

In Los Angeles, Metro has launched a traffic reduction study which investigates how traffic can be reduced by employing various methods, including congestion pricing. Examples of possible pricing schemes under consideration include a cordon zone in Downtown Los Angeles (similar to London) and various corridor pricing proposals. Based on the results of this study, and approval by its board of directors, Metro will deploy a pilot program to test the strategies.

But such pricing strategies could have several unintended social, economic and environmental impacts. Community engagement, environmental studies and research will be key. For example, could pricing a downtown area encourage people to live and work within the cordon or cause travelers to live and work in edge cities bypassing the cordon altogether? The latter could have unintended consequences of encouraging outward growth and potentially greater vehicle miles traveled. The issues are complex and challenging to untangle.

Road pricing also raises equity concerns. According to a Federal Highway Administration primer on the equity impacts of congestion pricing, high-income households may be more likely to drive, pay the road charge and benefit from improved roadways (e.g., better infrastructure, reduced traffic, etc.) while low-income households may be forced to less-expensive times, routes or modes. Additionally, road pricing can adversely impact longer distance super commuters that—as of no fault of their own—were displaced and have longer commutes due to the state’s housing affordability crisis.

To address some of these equity concerns, a number of regions use some toll revenues to fund public transportation improvements (e.g., Metropolitan Transportation Commission and the Port Authority of New York and New Jersey). Some have also proposed reduced pricing for low-income drivers. In Southern California, Metro ExpressLanes on the I-10 and I-110 freeways already offer a reduced low-income assistance program featuring reduced tolls for Los Angeles County households with incomes below certain thresholds.

Irrespective of the opportunities and challenges of different pricing strategies, new revenue sources will be needed quickly to rehabilitate our aging infrastructure, prepare emerging transportation technologies (such as automated and electric vehicles) and enhance our economic competitiveness. How we get there is up for debate, but we need change.

San José Spotlight columnist Karen E. Philbrick is the executive director of the Mineta Transportation Institute, a research institute focusing on multimodal surface transportation policy and management issues.