Related to the issue of cross-subsidization is the policy choice between maximizing toll revenues versus maximizing regional mobility.
With any toll road (and given the particular toll sensitivity of the area's motorists), economists can calculate a point where toll revenues will be the highest - where raising tolls further will cause traffic to drop by an amount yielding lower net revenue.
Some jurisdictions, however, have made the policy decision to hold tolls below the level of maximum revenue, and to raise them only to the level necessary to keep the system well-maintained and in good working order. The Committee believes they should have the option to continue doing so, and that this decision is best made at the regional level. Like other aspects of toll road development, one size does not fit all.
The growing movement toward congestion pricing, however, changes the revenue-mobility dynamic and is becoming an integral part of toll system management. In short, two basic models exist:151
• Encourage car-pooling by allowing high occupancy vehicles free or discounted use of HOT lanes while charging other motorists
• Adopt a dynamically variable pricing mechanism to immediately raise tolls in HOT lanes when traffic speeds drop below a pre-defined point, driving enough motorists away from the lanes to maintain the desired traffic flow.
It is our view that the latter alternative represents the more favorable approach. If high occupancy vehicles have free or discounted access to the HOT lanes, while motorists willing to pay higher prices are turned away, this could have the unintended effect lowering overall revenues during times of high congestion.
Alternatively, a system of dynamic pricing would allow individual motorists to choose between the relative value of time and money for any particular moment in time. This approach will be used in Texas for the first time with the opening of the Katy Freeway HOT lanes in Houston, though a similar program is planned for the expansion of I-635 in Dallas.
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151 A third model, in use in London and Singapore (and proposed for lower Manhattan) charges a fee to all motorists entering the city's CBD at specified times of day.