Examining recent attempts to apply equity policies to toll lanes
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Examining recent attempts to apply equity policies to toll lanes

Some metropolitan planning organizations and state transportation departments are looking into offering discounts or free trips in express toll lanes.

Everyone paying attention to transportation policy over the past decade has noticed the increased focus on equity. The U.S. Department of Transportation is currently building on President Joe Biden’s Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” to include equity considerations in all its programs. Similarly, discussions and sessions on equity are being held with increasing frequency at significant conferences by groups like the Transportation Research Board, the National Conference of State Legislatures, the International Bridge, Tunnel & Turnpike Association, and others.

But as transportation researcher Steven Polzin pointed out in testimony before the transportation subcommittee of the U.S. Senate Committee on Environment and Public Works in May 2021, there are many aspects of equity, and they are sometimes in conflict. Polzin noted, “there are tradeoffs and opportunity costs involved with the undisciplined pursuit of mitigating impacts inherent in transportation infrastructure.”

Within the constraints of this column, I’m going to focus on recent attempts to apply new equity concepts to tolled projects, such as highways, bridges, and express toll lanes.

One growing trend is transportation planners proposing to fix alleged inequities in express toll lanes by offering discounted rates to lower-income commuters, offering a certain number of free monthly trips, or similar measures. I first learned of these efforts while taking part in a Transportation Research Board Managed Lanes Committee panel in January 2021. In suggesting that the proposed equity measures were unwarranted, I cited a detailed 2019 University of Washington study of equity among user groups of the Seattle region’s I-405 express lanes, which found that the lowest-income quintile of express toll lane (ETL) users derived greater benefits per trip—defined as the value of time savings minus the cost of the toll paid—than any other income quintile. And I pointed out that these toll lanes are a voluntary choice for drivers, who could also choose to use the non-tolled lanes.

But today, more and more metropolitan planning organizations and state transportation departments are looking into offering discounts or free trips in the toll lanes for economically disadvantaged drivers.

It’s worth noting that most ETL providers already work closely with local transit agencies to ensure there is express bus service using the faster, more-reliable bus service in express toll lanes. These buses offer subsidized rides, just as all transit services do.

As I’ve written before, giving free trips will crowd more cars into the express toll lanes during peak travel periods, leading to the variable toll rates going up higher than would otherwise be the case, which may deter some other drivers from selecting the ETLs, overcrowding the regular highway lanes. The studies of ETL discounts or freebies barely mention the impact these policies have on the road’s performance or revenue (which, in many cases, is essential for meeting the project’s debt-service obligations).

Let’s now consider an even more bizarre proposal. The Metropolitan Transportation Commission (MTC) for the San Francisco Bay Area is studying the possibility of adding tolls to all lanes on the Bay Area’s existing freeways. In the equity portion of the commission’s study, they have identified seven “equity priority communities” that would need special consideration in the planned toll rates. These communities, according to MTC, include:

  • Workers with low incomes
  • Middle-income workers
  • Super commuters
  • Working parents with school-age children
  • Students
  • Small business owners
  • Rural residents

With all those groups receiving consideration, the region’s urban professionals would presumably be the only ones to pay the full, regular toll rates. In effect, MTC is considering converting the Bay Area’s highway system into a complex, tiered social welfare system. For a hundred years, U.S. highways have been funded by per-gallon fuel taxes, with everyone paying the same per-gallon gas tax rate. While the argument can be made that the gas tax system should be replaced and now overcharges rural drivers who primarily use inexpensive roads and undercharges urban drivers in major cities, it is not set up as a social welfare operation.

The federal government already charges different rates for different services, including different ticket classes on Amtrak and varying delivery options via the U.S. Postal Service. The higher rates are supposed to be in exchange for the possibility of better or faster services.

Worldwide, toll road rates apply the same de facto rate per mile to all vehicles in a given classification, independent of the vehicle operator’s household income or economic position. Operating toll roads and bridges based on drivers’ job titles or income brackets would wreak havoc on long-term toll financing of the infrastructure, making it even harder to build and maintain roads and bridges. It would also likely lead to a consistently expanding set of politically granted discounts and freebies as more and more groups make the case that they should be subsidized and exempt from paying the full costs of using the infrastructure.

Advocates of implementing discounts on express toll lanes might point to lifeline rates offered to low-income families and seniors to cover modest use of electricity or water. But those lower rates do not lead to the over-use of electricity or water in the damaging way that the subsidies would affect traffic flow in express toll lanes.

For the most part, federal and state transportation policies have explicitly subsidized services, such as urban transit, for those known to be low-income. Some would argue that even those subsidies have gone too far since transit agencies typically do not charge fares that cover operating and maintenance costs. Instead, transit agencies tend to charge the same very low fares, which do not cover the costs of the ride, to all passengers. It would be more equitable to charge cost recovery fares but offer transit vouchers to low-income riders.

The opposite has occurred in the airline industry, where federal cost-plus regulation for decades kept airfares so high and competition so limited that only people relatively well-off financially could afford to fly. Since federal airline deregulation signed by then-President Jimmy Carter in 1978, robust airline competition has helped make flying affordable for most Americans. The only federal subsidies left in commercial aviation tend to be for small, mostly rural communities that don’t have enough passenger demand to support airline service.

Freer markets and more competition help expand consumers’ choices. Deregulation and markets would help produce equity more effectively than government actions.

Turning highways into something that might look like selective social welfare programs to drivers and businesses is unnecessary and unwise.

The transportation community should undoubtedly highlight the many places existing government policies are failing drivers and transit riders and making it harder to build and maintain the infrastructure that workers and businesses rely upon. The transportation community should also actively explain the shortcomings and likely unintended negative impacts that many proposed equity programs would have on the users they’re supposed to help.

Politicizing urban highways and undermining tolling, which should be used to finance and maintain highways, is not a good or effective solution to the nation’s infrastructure problems and won’t produce more equity.

A version of this column first appeared in Public Works Financing.