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A Swedish Take on Congestion Pricing

New York should look to Stockholm, not London for congestion pricing model

Robert Poole
July 22, 2007

The State Legislature's failure to pass a full-fledged congestion pricing plan last week could kill Mayor Michael Bloomberg's hope of winning one of several federal Urban Partnership grants to be awarded next month to cities ready to start such a program.

But while the compromise bill creating a commission to study ways to unclog Manhattan traffic states that the project can't proceed without at least $250 million in federal funds, Bloomberg's basic idea needs to stay on the table.

The key to getting widespread support in Albany, which is the crucial first step, is to focus not just on Manhattan, as Bloomberg did, but to address congestion in all five boroughs. This would help suburban commuters who pass through those places, as well as drivers making their way around Manhattan.

That's the lesson from Stockholm's little-noticed success with congestion pricing, a more relevant model than London's system, which has dominated the discussion.

"Congestion pricing" means charging drivers a toll to use roads at times and places where demand exceeds capacity. It also has been imposed on congested downtown streets in Singapore, as well as in London and Stockholm, in recent years. In London and Singapore, you must pay a toll (electronically) to enter the central business district on weekdays. Congestion pricing can also be used on specialized toll lanes on expressways, as in the half-dozen high-occupancy-toll lane projects in various U.S. cities.

In every case, congestion pricing has reduced weekday vehicle counts enough to meaningfully speed up traffic flow, offering time savings for motorists and bus travelers.

Manhattan is one of the few downtowns in America where congestion pricing on city streets actually could work. These streets are overloaded much of the day, and access points into and out of Manhattan are limited, making implementation costs relatively low. So the mayor should try again, even if federal seed money is no longer available. But to gain the needed legislative and popular support, the plan needs further work to turn it into a win-win proposition.

There are two major flaws in the mayor's initial proposal. First, the proposed tolls are too low to significantly reduce congestion. Since bridge and tunnel tolls would be deducted from the $8 daily charge, most drivers entering Manhattan would pay little. Hence, the plan is projected to reduce traffic by a minuscule 6 percent, far less than the 15 percent to 20 percent achieved in London and Stockholm. And the net revenue would be only a few hundred million dollars per year, not enough to fund much in the way of better transportation infrastructure. So it's hardly surprising that there was so little political support.

A 2006 survey of city residents for the Tri-State Transportation Campaign found majority support in only two boroughs, Manhattan and Staten Island, with majorities in the other three boroughs opposed. More recently, after much more publicity about the mayor's plan, a Quinnipiac University poll found city voters opposed by a huge margin, 62 percent to 31 percent.

And, importantly for action in the legislature, it's not just Bronx, Brooklyn, Queens and Staten Island commuters into Manhattan who would have to pay but who would get little in the way of either congestion relief or improved infrastructure. Nearly half (47 percent) of all commuters who drive into Manhattan come from suburbs. With the mayor's plan devoting all the net revenue to improving mass transit within the city, for most suburban commuters the new charge would be all pain and no gain. (Few of those who drive to jobs in Manhattan use mass transit while there.)

That's why we should look to the model of Stockholm, not just London, for lessons in how to make this idea politically viable. London's pricing plan covers only a small portion of the central city, where more than 90 percent of commuters already used mass transit. By contrast, Stockholm's pricing covers its entire downtown, meaning it takes in many commuters who drive in from its extensive suburbs.

Before a seven-month trial period, polls in Stockholm showed 2 to 1 opposition. But the trial, from January through July 2006, reduced traffic by 22 percent, which changed many minds. By the time the trial ended and congestion returned to prior levels, support for bringing back pricing had increased to 51 percent within the city limits. But the plan was still strongly opposed by suburban voters. When the citywide vote was held last September on whether to reinstate congestion pricing, it passed it passed 52 percent to 46 percent, a narrow margin.

But the same election brought a change in party, at both the national and city level. The new governments listened to the concerns of suburban voters - especially on the use of revenue from the system. Instead of the previous plan to spend all the proceeds on mass transit, the new government promised to use much of the money for highway improvements, starting with a $3-billion north-south expressway, built largely underground through the western suburbs. A recent poll by the Skop newspaper showed that support for congestion pricing has now increased to a whopping 67 percent.

For Manhattan, a wiser plan would use pricing - and the revenue it generates - to benefit both city and suburban commuters. The first step is to figure out what pricing level would produce a 20 percent to 25 percent reduction in congestion, so that in exchange for all the trouble and cost, Manhattan gets real relief. My guess is that this would be a toll of about double what the mayor proposed. Because it costs the same to implement the system regardless of the toll amount, net revenue will be far more than twice as much.

Another key change, taking a page from Stockholm, is to devote a major share of that larger revenue to highway projects that offer congestion relief in the other boroughs, which would also benefit commuters from outside the city who have to go through those boroughs to get to town.

One possibility is special toll truckways, aimed at reducing the amount of truck traffic on streets and expressways, while giving truck drivers faster and more reliable trips in exchange for paying tolls. Among the ideas that have been suggested are a trans-Hudson truck tunnel, a north-south western Manhattan truck tunnel, and a Brooklyn truckway following unused railroad right of way. Although building truckways would be expensive, the combination of truck tolls and congestion-pricing revenue could finance a large share of the cost.

Another idea is to add elevated express toll lanes to some of the most congested roadways, such as the Long Island Expressway. Tampa, Fla., opened such a project one year ago this month on its Crosstown Expressway, and it's been hugely popular, giving commuters a time-saving alternative. All-electronic E-ZPass tolling would permit rates on the new lanes to be fine-tuned, to keep traffic flowing smoothly at 55 mph, even at the worst rush hours, as has been done for a decade on similar toll lanes in Southern California. Such express lanes are also a good fit for high-speed express bus service to and from the suburbs. Here again, express lane tolls plus congestion pricing revenue could finance much of the cost.

Those who favor congestion pricing for Manhattan need not despair over Bloomberg's failure in Albany. The idea is robust enough to be doable without federal financial support. Proponents now need to join hands with those who have the best interest of outer borough and suburban motorists at heart. If done right, this program could be just as popular throughout the metropolitan area as Stockholm's.


Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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