Reason Foundation - Authors > Kevin Soucie

Adding FAST Lanes to Milwaukee's Freeways

bob.poole@reason.org (Robert Poole) info@reason.org (Kevin Soucie) — Wed, 01 Feb 2006 18:00:00 EST

Executive Summary

Greater Milwaukee has a large and growing problem of traffic congestion. In 1982, the average resident spent five hours per year stuck in traffic. By 2003, that total had grown to 23 hours. Trips at rush hour now take more than 20 percent longer to make than at other times of day. The cost of wasted time and fuel averages $310 per person per year in the Milwaukee area, and is likely to grow significantly in coming decades.

Freeway congestion has also had a devastating impact on bus service and has severely hindered transit’s time-savings competitiveness with the automobile. “Freeway Flyers,” stuck in the same traffic jams as cars, have lost their “express bus” advantage as an alternative for commuters. As a result, transit continues to lose commuter market share, circling down the death spiral of service cuts and fare increases.

One seldom discussed cost of freeway congestion is the greatly reduced ability of emergency vehicles (police, fire, paramedic) to get where they need to go rapidly and reliably. In responding to life-threatening emergencies, every second counts. Yet congested freeway lanes may make it impossible for these public safety vehicles to get through when they are urgently needed.

Some may attribute recent traffic delays to construction work on the Marquette Interchange—and that may be partially correct. But it is a mistake to think that traffic jams will go away once the Marquette is completed. In fact, all evidence indicates that traffic congestion will continue to worsen. Southeastern Wisconsin is in the early stages of a $6.2 billion reconstruction and modernization of its aging freeway system. Simply widening much of the system by adding one lane in each direction (as proposed by SEWRPC) will reduce congestion initially, but projected growth will overwhelm the expanded system in the not-too-distant future—and support is unlikely for further widening due to costs, political opposition, and land-use constraints. Hence, this reconstruction cycle may be the last real chance the region has to consider a more sustainable longterm approach to its freeway system.

This report proposes that on the most congested core portion of the rebuilt freeway system, the inner lane in each direction be configured as a “FAST Lane,” on which traffic always flows at the freeway speed limit thanks to variable pricing—adjusting tolls to maintain free-flow traffic conditions. The use of pricing means there will be tolls, but no toll booths. The variable tolls will be charged electronically, via transponder. There is no need for stopping, slowing down, or using coins. Nearly a decade of experience with such priced lanes on two California freeways shows that variable pricing works well to keep such lanes flowing freely, at the speed limit, during highly congested peak periods. The pricing also generates revenue that more than covers the cost of constructing the FAST Lanes.

FAST Lanes assure motorists that no matter how bad traffic gets, they will always have a reliefvalve available when they really need it. Some have begun to call this concept “congestion insurance.” Just as people purchase insurance to guard them against life’s other hazards (fire, theft, accidents), with a network of FAST Lanes they will be able to purchase insurance to guard them against being late. The initial cost of this “insurance” is very low: simply the cost of opening an account and installing a transponder on the car’s windshield. From that point on, account-holders have the peace of mind that whenever they are running late and really need to be somewhere on time, they have a means of buying that faster trip for a price that is lower than the cost of being late. This will always be true since it will be the individual driver who chooses whether or not to pay for a specific trip. Data from the long-established California HOT lanes support the premise that most people don’t use these lanes every day (which for most would be quite costly). Rather, the overwhelming majority uses the lanes in the “congestion insurance” mode, once or twice a week. Data also show that the system is popular with people of all income levels, so all segments of society benefit from the availability of FAST Lanes.

The proposed FAST Lanes system would encompass the approaches to downtown on I-94 from the south and from the west, on I-43 and US 45 from the north, plus the inner core of freeways near downtown (I-894 and I-94/43 north-south, and I-94 and I-43 east-west). This is the portion of the freeway system where congestion is projected to be worst, even after the widening. It is consequently the area where relief is most needed and where willingness to pay to avoid congestion will be greatest. Our proposed construction phasing of the FAST Lanes is designed to get the highest revenue-producing segments in operation first.

Our analysis projects traffic on the freeways and on the FAST Lanes segments through 2045. Based on a starting rush-hour toll equivalent to 15 cents/mile (in 2005 dollars), we estimate that the proposed FAST Lanes would generate enough revenues to support a toll revenue bond issue of about $1 billion. To put it in perspective, that kind of new voluntary (non-tax) revenue could finance the cost of rebuilding the entire Marquette Interchange with money left over. It certainly would make a significant contribution toward the $6.2 billion cost of the overall freeway reconstruction program.

FAST Lanes also provide uncongested guideways for express buses, enabling Freeway Flyers, UBUSes (University buses) and other transit services to operate faster, more efficiently, and more reliably than on regular, congested freeway lanes. Restoration of the time-savings advantage can help transit recapture some of its lost share of the commuter market. In addition, FAST Lanes will provide a greatly improved means for emergency vehicles to reach the scene of incidents, or to get to the portion of the metro area where they need to be, in significantly less time.

Rebuilding the Marquette Interchange Via a Public-private Partnership

Sat, 01 Feb 2003 00:00:00 EST

Executive Summary

The Marquette Interchange is arguably the most important single component of Wisconsin’s surface transportation infrastructure. Unfortunately, it is worn out and in urgent need of rebuilding. And because of the state’s current budget-deficit situation, the total cost of rebuilding the Marquette — nearly $1.5 billion, using realistic numbers — is beyond the state’s means. Further, there is very little prospect of obtaining significant “extra” federal aid for this very large project. And any significant reallocation of existing federal dollars from other Wisconsin projects toward the Marquette would meet certain opposition.

This report proposes an alternative way of rebuilding the Marquette. Instead of scraping together the necessary tax funds by starving other needed transportation projects of funding, or stretching out the project over a decade or more (during which downtown Milwaukee would suffer greatly), we propose tapping private capital via a public/private partnership (PPP). The Marquette is a large and complex bridge. Major bridges are usually funded via long-term revenue bonds, to be repaid from tolls charged to users. This is a typical application of the PPP approach in transportation.

Public/private partnerships for large, complex infrastructure projects have been used for decades in Europe, and more recently in Australia and Latin America. During the 1990s they began to be used in the United States and Canada as well. PPP toll projects are in operation in California, Texas, and Virginia, as well as several Canadian provinces. Large urban toll projects in excess of $1 billion are in operation or under construction in Melbourne, Paris, and Toronto. These projects, in particular, make use of fully automated tolling systems to generate revenue to pay for the facilities. These automated tolling systems are designed from the outset without any toll booths. All tolls are collected electronically, at normal highway speeds, either via a dashboard-mounted transponder (for regular users) or via license-plate imaging (for occasional users). All the inconvenience, traffic congestion, safety, and environmental concerns of traditional tolling would not occur on the Marquette.

For the Marquette, we have estimated the cost of a state-of-the-art automated tolling system (similar to that on Toronto’s Highway 407) at $28 million. That is less than two percent of the total cost of this nearly $1.5 billion project. Also, the operating and maintenance costs of such a system are estimated to be a small fraction of the cost of operating conventional toll collection with toll booths. Further, this type of tolling system gives everyone access to the facility, whether they open an account and obtain a transponder or not.

Our preliminary analysis suggests that the entire reconstruction project could be funded via a toll revenue bond issue. A baseline toll revenue stream of $165 million per year will support bonds in excess of the $1.5 billion project cost. This revenue number is based on rush-hour bridge tolls of $2 for cars and $10 for trucks, comparable to tolls on major bridges nationwide. Off-peak rates on weekdays and all day on weekends and holidays were assumed to be 30 percent less.

Wisconsinites are reported to contribute more than 40 percent of Illinois’out-of-state toll revenues. Our proposal attempts to turn the tables by collecting $17 to $21 million each year from out-of-state users of the Marquette.

Ample legal authority exists at the federal level to carry out this project in the manner we have proposed. Federal surface transportation law provides for public/private partnerships, for using tolls to rebuild Interstate facilities, and for charging peak and off-peak toll rates. Indeed, the Federal Highway Administration encourages all three of these techniques. Wisconsin enacted a PPP law for transportation projects several years ago, but some fine-tuning would be needed to clarify the legal status of charging and enforcing electronic tolls and of using the design-build procurement method for such projects.

We recognize and empathize with the concerns expressed by highway user groups (auto clubs and trucking associations) about “double taxation” — i.e., paying both tolls and fuel taxes for the same highway facility. Our proposal therefore includes rebates of fuel tax liability incurred for the miles driven on the rebuilt Marquette. The proposed automated tolling system enables this to be done on an individual user basis in a reliable and cost-effective manner.

A public/private partnership is a viable approach for rebuilding and modernizing this vital component of Wisconsin’s transportation infrastructure. It would permit the entire project to be completed in a four-year period, minimizing the period of disruption in downtown Milwaukee. And most important, it would free up close to $1.5 billion in federal and state transportation funds for other vitally needed transportation projects in the state, including the modernization of the Milwaukee-area freeway system.

We hope Wisconsin’s business and government leaders will embrace this new approach to meeting an urgent public need.