Surface Transportation Innovations #24

Topics include: HOV/HOT lanes safety; affordable transponders; S&P's report on public-private partnerships; public support for toll lanes; and traffic signal timing.
In this issue:

New Safety Problem for HOV and Maybe HOT Lanes

About 90% of all high-occupancy vehicle (HOV) lanes are separated from adjacent travel lanes only by what is called a "buffer"—double white lines on the pavement. As a result, unless there is stringent enforcement (high fines and aggressive police monitoring), non-carpool drivers tend to dart in and out of the HOV lanes to bypass congestion in the regular lanes. And that leads to accidents.

Until recently, we had only anecdotal evidence that this was the case. But in April the Texas Transportation Institute published a before-and-after analysis of accident rates on Texas freeways where HOV lanes were added in the 1990s. (The executive summary is at http://tti.tamu.edu/documents/0-4434-S.pdf; there are two more-detailed reports.) For example, on I-35E in Dallas, accidents per hundred million vehicle miles went from 32 to 50 after the HOV lanes opened in 1996. And on the LBJ Freeway (I-635), the rate increased from 44 to 62 after its HOV lanes opened in 1997. These results are even more dramatic than a 2004 study by Midwest Research Institute of new HOV lanes in Southern California. That study found an 11% increase in accidents. An earlier (1992) study found no such increases, but co-author Edward Sullivan of Cal Poly San Luis Obispo told the Wall Street Journal that this study "probably should be considered stale by now." And the Journal reports that the Maryland State Highway Administration, after the release of the TTI study, looked at the portion of I-270 with HOV lanes near Washington, DC and found that the accident rate was twice the statewide average.

What's a problem for HOV lanes could also be a problem for some HOT (high-occupancy toll) lanes. Thus far, of the five HOT lane projects in operation, three are separated by concrete barriers, one by plastic pylons in addition to white lines (the 91 Express Lanes), and only a portion of one, the newly converted HOT lanes on I-394 in Minneapolis, uses just buffer separation. Because violations on HOT lanes involve a loss of toll revenue, enforcement is generally given a much higher priority than is typical of HOV lanes—and that's true of the Minneapolis project, which began operations only in May. So it's too early to tell if its enforcement measures will be sufficient to avoid a safety problem. (Actually, since this facility has been in operation for some years as buffer-separated HOV, with stepped-up enforcement due to the introduction of tolling, we ought to see the accident rate come down in that corridor.)

Those planning HOT lanes need to take this safety/enforcement issue seriously. Considerations of space and cost argue against adding concrete barrier separation for such projects, and the plastic pylons used on the 91 Express Lanes in Orange County seem to have worked well at deterring unauthorized entry. But plastic pylons are not suitable for locations where winter snow is common, raising the question of whether there is any other alternative to the very low-cost white lines and the high-cost concrete Jersey barrier. I welcome your suggestions of a better approach to HOT lane separation in cold-climate areas.


Transponder Breathrough Slashes Cost

It may surprise you to learn this (as it did me), but a considerable fraction of our urban population does not own credit cards or have checking accounts. The standard assumptions we make about phasing out cash tolling have taken for granted that drivers would open toll accounts and mostly replenish them via credit card or bank transfers. But to advocates for lower-income people, such assumptions are out-of-touch and discriminatory. As is the assumption that paying $35 for a transponder is not a barrier to people acquiring one.

I first encountered these concerns at a public hearing on Managed Lanes in Miami last year. And soon thereafter, I served as a peer reviewer of a conference paper on the issue of the affordability of electronic tolling systems by those in the cash economy. Because we know that low-income people are far more likely to drive than to use transit, and we also know that even people in the bottom quarter of the income distribution welcome the opportunity to use HOT lanes in California for certain trips, we need to pay attention to these issues of access and affordability.

Fortunately, technology is coming to the rescue. Electronic toll collection vendor TransCore has for several years been selling an inexpensive ($10) "sticker tag" called eGo. Very thin and the size of a business card, it's adhesive on one side, and is permanently affixed to the windshield. Though eGo has been used for several years in large numbers for fast-lane border crossings with Canada and Mexico, the first large-scale toll-road application has been under way for the past 15 months in Puerto Rico. Because upwards of 50% of the island's people don't have credit cards or checking accounts, the "AutoExpreso" tolling system has been set up largely on a cash basis.

The Puerto Rico Highway Authority created a sales network through gas stations, which sell 75% of the tags (the balance being sold at toll plazas). The purchaser also obtains a magstripe card encoded with the toll account number. The initial purchase includes $10 for the eGo tag and $10 in prepaid tolls. Customers can replenish their accounts in cash, by presenting their magstripe card along with the cash at any of these gas stations. According to Tollroadsnews.com, as of May there were 205,000 eGo tags in use in Puerto Rico, meaning that about 10% of all vehicles on the island now have transponders to use the Commonwealth's four toll roads.

The Florida Turnpike Authority has said it will introduce sticker tags by next year, in response to concerns about affordability in Miami as well as its own plans to begin phasing out toll booths, beginning with Broward County's Sawgrass Expressway in 2008. TransCore has a contract to develop a sticker tag system for Georgia's State Road and Toll Authority. And the Texas Turnpike Authority is also reported to be looking into sticker tags.

Incidentally, in addition to making electronic tolling accessible and affordable in Puerto Rico, the new system is also addressing privacy concerns. For the 90% of AutoExpreso accounts maintained with cash, the account number is not linked with any information about the account holder. These are anonymous accounts, just like Swiss bank accounts.


Standard & Poors Bullish on Public-Private Partnerships

The blockbuster Chicago Skyway sale last winter continues to have repercussions. It made public officials and transportation policy wonks aware that there is no shortage of funds available for U.S. highways. The global capital markets can provide billions of dollars, in exchange to the right to charge tolls for long periods.

That reality is carefully assessed and endorsed in a new report from ratings agency Standard & Poors. The title poses the question: "Can Public-Private Partnerships Advance U.S. Roadway Infrastructure Development?" And it provides a well-reasoned, financially sophisticated affirmative answer.

S&P's researchers walk the reader through the need for increased investment in U.S. highways, and they review both the traditional (mostly gas-tax) funding sources and the "innovative" funding sources that have come along in recent years (state infrastructure banks, GARVEE bonds, etc.) and conclude that they are limited in what they can do. But long-term public-private partnerships (basically long-term toll concessions), they conclude, "have the potential to play a meaningful, perhaps vital, role in the development of new highway infrastructure projects."

They go on to discuss what features S&P will look for in developing ratings for such projects, including an appropriate allocation of risks between the state and the private consortium, the commitment of serious, long-term at-risk equity by the private sector, and careful assessment of life-cycle costing. They also usefully contrast the inflexible 100% debt financing structure of traditional U.S. toll roads (and some recent public-private partnerships) with the more sophisticated financing structures that are now starting to emerge in this country.

They conclude that: "Attracting private capital to advance roadway infrastructure will require both public owners and investors to reconsider the standard U.S. approach of development and risk-sharing and, in typical American fashion, [to] borrow and modify what has worked elsewhere to fit the demands of a large and unique market."

The report can be downloaded here.


DC Commuters Prefer Tolls to Taxes

Back in February, the Washington Post did a survey of DC metro area residents on questions involving traffic congestion. By a two to one majority, respondents preferred tolls to increased taxes as a way to pay for additions to the highway system. And 58 percent liked the concept of HOT lanes, an idea that has received considerable attention with several far-advanced private-sector proposals in Virginia and active state support in Maryland.

By contrast, when many of the same questions from the survey were asked to a national sample of 1,204 adults by the Post, together with Time and ABC News, the results were quite negative to tolling, and especially to the idea of variable pricing (opposed by 68 percent in the national sample).

These results sound paradoxical, but I think they are easy to understand. Traffic congestion is an urban phenomenon, and it's far more serious in the largest 20 metro areas (such as Washington, DC) than it is in "average America." So if you don't see congestion as a problem, why would you want to have toll lanes added to your freeway system? Moreover, these ideas (like variable pricing) are not easy to put on a bumper sticker. In focus group after focus group on HOT lanes, we see that it takes a great deal of patient explanation before most people get the idea. So to expect random people who have not gotten such briefings (or had numerous articles in the paper over several years making the case for HOT lanes, as has been the case in the DC metro area) to support variable pricing is naïve.

I'm overjoyed by the Post's local survey results, which show that in the places where pricing is really needed, this important new idea can be communicated successfully, to the point where it's getting majority support even before the first project is in operation. If you think DC commuters like the idea now, just wait till they actually have a chance to use HOT lanes.


Dropping the Ball on Traffic Signal Timing

We all know what a huge burden traffic congestion is, costing commuters $63 billion a year in wasted time and fuel�let alone its other costs to regional and urban economies. Too often, though, we focus only on the freeways, ignoring the huge fraction of all travel that takes place on arterials and other local streets. And here is where traffic signal timing can make a big difference.

Proper traffic signal timing on major arterials is the low-hanging fruit in the battle against congestion. According to the Institute of Transportation Engineers (ITE), the benefits of investing in signal timing are about 40 times the cost. Yet most urban governments are dropping the ball. According to the first-ever National Traffic Signal Report Card, released in April by ITE, 68% of the 378 responding traffic agencies said they have no documented management plan for traffic signal operations, 71% don't have adequate staff to monitor traffic conditions, and 57% don't conduct routine (every three years) reviews of traffic signals. Overall, the Report Card gives traffic agencies a grade of D-.

The Report Card also estimates what it would take to run high-caliber traffic signal systems, with up-to-date computer hardware, regular timing updates, and proper maintenance. Their national total is $965 million a year; that's less than one percent of the $104 billion in federal, state, and local funds spent on highways in 2000. You can find the report at www.ite.org/reportcard.


Good Reading

A wealth of new transportation information has crossed my desk in recent weeks. I could write a whole piece on each of these, but will have to let a few sentences suffice to whet your appetite.

"Should States Sell Their Toll Roads?" is the timely topic taken on by colleague Peter Samuel in this new report from Reason Foundation, policy study #334, released in June. You can download it from:
www.reason.org/ps334.pdf.

"TEA-21's Impact: Performance of State Highway Systems, 1984-2003" is Prof. David Hartgen's 14th annual review of state DOT performance, documenting generally improved performance during the TEA-21 years. Available at:
www.johnlocke.org/press_releases/2005032280.html.

Three years ago the Transportation Research Board held an outstanding conference on transportation finance in Chicago. Just about everybody doing interesting things with tolling and pricing was there. A very well-edited set of conference proceedings has just (finally) been published. You can find this document here.

The World Road Association held a road pricing conference in Cancun, Mexico in April. The papers cover a variety of subjects in financing, regulation, and equity, with U.S., European, and Latin American cases in point. Papers and slides are available here.


Quotable Quote

"[Road pricing] is shaping up as one of the biggest philosophical changes in transportation policy since the toll-free Interstate highway system was created under President Dwight D. Eisenhower in 1956."

— Timothy Egan, "Paying on the Highway to Get Out of First Gear," New York Times, April 28, 2005.

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





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