FACILITY-LEVEL TOLLING AND PRICING | • Facility-level Tolling and Pricing-Roadway tolling can be applied at the state and local level in a wide range of fashions, including turnpikes, which are individual (generally long-distance) facilities that charge a fee for use; "single links," which are facilities such as bridges, tunnels, or connector roads; and "managed lanes," or highway lanes that are devoted to carpoolers, public transit vehicles, and toll- paying users, including but not limited to High Occupancy Toll (HOT) lanes and HOT networks, or systems of high-occupancy vehicle lanes. |
• Description - Application of tolls and/or pricing to fund specific investments • Potential Revenues - Could be significant in applicable situations, depends on breadth of use • Other Considerations - Only applicable at state and local levels and not in all situations • Conclusion - Strong option |
Pros
• Can raise substantial revenues as an option for states and localities to raise their non-federal shares and pay for state-only investments, but only in areas where traf- fic volumes make it cost-effective to implement
• Once established, revenues from toll facilities tend to be stable and well suited (and often required) to be dedicated to transportation, often to the toll facility or toll road system itself; potential to increase sustainability if toll rates adjusted as necessary to account for inflation, including through automatic toll rate adjustment mechanisms
• In some instances, can generate excess revenues (beyond debt service and operations costs) that are flexible and can be used for a broad range of transportation purposes
• Potential for electronic toll collection and other tolling technologies to improve compliance enforcement and offer user benefits such as improved travel speeds and toll discounts that, over time, can help to offset the associated costs of the technology to the consumer
• If toll rates are set to manage congestion, can help maximize the efficiency of the existing network
• Reasonable income equity if non-toll alternatives such as transit are available; al- though in areas where neither transit nor non-tolled highway options are available, all highway users pay more and lower-income drivers potentially disproportionately affected
• Establishes a high level of user-beneficiary equity if the toll rates reflect the benefits derived by the user
• Tolled turnpikes, where built in regional or national goods movement corridors, can provide highway capacity through rural regions that otherwise could not afford it
Cons
• As general rule, facility-level tolling not a broad-based means for raising transportation revenues in rural areas with low traffic volumes
• Significant upfront political and public resistance to facility-level tolling that creates substantial implementation barriers and often takes time to overcome, particularly in cases where existing facilities are being converted to tolled facilities; tolling of new facilities or expanded capacity on existing facilities tends to gain broader public and political support
• Depending on geography, potential for unfair pricing, particularly toward out of region/state users
• Possible diversion of traffic to less safe, lower-order roads, depending on the toll rates and the location/condition of alternative routes
• Comparatively higher capital and administrative costs for toll collection than non- tolled facilities
• May have negative impacts on non-discretionary system users, such as some freight travel or others who have minimal options to change the time, location, or mode of travel
• Cordon Pricing-This is a state or locally imposed option whereby drivers can be charged for access to cordoned areas through tolls at certain boundaries or through the sale of passes to drive in the cordoned area. Cordon pricing could not be implemented on a national scale and, like facility-level tolling, is not viewed as a means for providing federal surface transportation funding. While the principal function of cordon pricing is to manage demand and reduce congestion during peak hours, it also generates revenues. | CORDON PRICING |
• Description - Imposition of access charges for designated urban areas • Potential Revenues - Low in terms of national needs, but could be significant relative to local needs • Other Considerations - Only has potential in a small number of U.S. metropolitan areas • Conclusion-Weak option |
Pros
• May be possible to raise significant levels of revenue through cordon pricing, but there are limited areas in the nation where establishment of a cordon pricing scheme is feasible (e.g., places like New York, Boston, and San Francisco)
• Revenues from cordon pricing well suited to be dedicated for transportation purposes and can be used flexibly to address different types of transportation needs
• Can offer strong geographic equity if revenues are spent where they are raised
Cons
• Not an appropriate means for raising transportation revenues in rural areas with low traffic volumes
• Significant implementation and administration costs and hurdles
• Because funds raised are not linked inherently to a specific investment, may be little or no relationship between revenues from cordon pricing and system investment decisions, although such connections can be created through the implementation process
• Cordon fees designed to reduce congestion in the center of some dense metropolitan areas; therefore, may not be structured to generate substantial revenue to fund more comprehensive regional transportation networks
• Establishing cordon pricing rates that are high enough to achieve demand management goals likely to pose significant political challenge