Flexible Tolling: The Key To Solving Our Congestion

Transit can’t solve the problem, and we can’t afford to build enough highways. So modern tolling, with prices varied by demand, will be necessary. Here’s a look at how the Legislature is quietly laying the political and conceptual groundwork.

Start with the transportation facts of life. Population in the four counties of Central Puget Sound will have grown from the 2008 total of 3.6 million by another 1.4 million in 2040. Jobs will increase by 1.1 million, and — based on the region’s collective proclivities to date — total vehicle miles travelled (VMT) by more than 40 percent.

Barring some big paradigm shift, the percentage of daily “passenger” work trips which occur on transit will grow from 8 percent of the current (2006) total to only 9 percent in 2040. For far more numerous non-work passenger trips, the transit market share stays at a scant 2 percent between 2006 and 2040, according to recent modeling. The vast majority of daily passenger trips occur in cars now and then. For work it’s more than four of five, for non-work, about nine of ten. (The rest are split between transit, walking, and biking.) On the upside, there’s a lot more ride-sharing for non-work trips; plus, per-capita VMT will continue to stay flat; and we can shave a bit off the expected growth in total VMT by meeting (elusive) regional growth strategy targets.

These are some of the sobering conclusions in a March 2009 background paper that’s part of the Puget Sound Regional Council’s “Transportation 2040” planning effort. Future projections may change slightly under new computer modeling in a draft environmental impact statement due out at month’s end. But you get the idea.

The PSRC’s 2040 picture begs a huge question: What to do about it all? And, as we’ll see in a moment, it turns out that the state Legislature has some bold ideas of its own.

My own take: A comprehensive approach to managing peak-hour highway capacity in Central Puget Sound should be launched by bravely establishing — and soon — a seamless regional system of variably-priced, automated, and ultimately corridor-length tolling on highways and major state routes. This must be folded into a broader plan to develop stable long-term funding for the region’s surface transportation network.

Automated, booth-less tolling with rates varying by demand levels is sometimes referred to as “value pricing.” Under value pricing, if demand is higher during rush or “peak” hours (and it almost always is), so are rates; conversely, both tend to be lower, off-peak. This approach can be limited to a facility, such as the State Route 520 bridge, or the planned inland deep-bored tunnel on SR 99 in downtown Seattle. But value pricing can also be applied more sweepingly, in all lanes of an urban region highway corridor; or in some lanes, such as High Occupancy and Toll (HOT) lanes. We need a network of value-priced highways, or lanes on highways, that connect with each other across the metro region. Otherwise, their value to users won’t be anywhere near optimal.

HOT lanes are free to transit and ride-sharers and — this is key — also available to solo drivers for a variable toll based on current congestion levels in the HOT lanes. HOT lanes may be built anew or can be converted from pre-existing High Occupancy Vehicle (HOV) or carpool lanes. Their guaranteed swift travel times can not only benefit motorists, but pair well with beefed-up suburb-to-suburb express bus service, assuming traffic bottlenecks are fully erased on the bus routes. On State Route 167, south of Seattle, one HOT lane is in operation on each side of the highway on a sizable stretch of the road, in a four-year pilot project. It’s a good start on the concept.

A one-size-fits-all approach to value pricing is not necessarily wise here, not yet. HOT lanes work best on heavily-used highways where solo drivers would actually want to pay for the express lane option. On less congested and incomplete highways that nonetheless require tolling revenues to be built out (think Washington’s State Route 509, for instance), tolling all lanes using value pricing may make more sense than HOT lanes; who would pay for tolled express lanes they don’t really need, when there’s a free-flowing free option a lane or two over? If a facility over time becomes congested, then all-lanes-tolled can perhaps give way to a mix of HOT lanes and free lanes.

HOT lanes and other types of value-priced lanes are already in operation around the country and more are planned. Yet as always, it’s California that’s ahead of the curve. San Diego is already a leader in highway value pricing; and in the Bay Area, what’s really on fire is a proposal for a full 800-mile seamless HOT lane highway system, now being advanced as AB 744 by Alberto Torrico, the Assembly Majority Leader. It’s likely to pass before long, if not this year. The HOT lanes approach suits the jammed highways of the nine-county region, population 7.3 million. Lieutenant Governor John Garamendi, a Democrat, is enthused about the prospects for improved mobility, including express bus service.

For Pugetopolis, the “pay to play” guaranteed relief of HOT lanes on congested highways can help us recalibrate when and how often we drive alone. You say you’re a peak-hour solo driver and you want to arrive at your destination by a time certain? Fine, but it’ll cost you. You want to avoid the higher rates of HOT lanes? Also fine, but you may have to travel off-peak, carpool, take transit or tele-commute. Or take the non-tolled general-use lanes next to the HOT lanes, which may experience significant congestion. Maybe you can afford to be late. Or maybe you can’t, which is why, surveys have repeatedly shown, motorists of all income levels are glad to have HOT lanes at their disposal.

This concept is about transportation finance as well as busting congestion. Any attempt to fully modernize our poorly designed, stunted highway system will require the money raised under some sort of comprehensive regional tolling strategy, plus other funding sources including a local option motor vehicle excise tax and public-private partnerships. The public conversation on tolling in Puget Sound isn’t down to the real nitty-gritty yet, but it is moving forward.

Recent transportation decisions in Olympia included approval of a deep-bored, likely-tolled inland bypass tunnel to replace the tottering blight of the Alaskan Way Viaduct on State Route 99 in Seattle, and early tolling on the State Route 520 bridge to help fund its crucial replacement for safety reasons. On the old 520 bridge, from 2010 until the new bridge’s construction, both lanes in each direction will be tolled; rates may or may not vary between single-occupant and multiple-occupant vehicles, but will vary by time of day. As of now, it’ll be the same on the new bridge, but that structure will also have a third lane in each direction to provide free passage for transit and ride-sharers. Perhaps one day those third lanes on each side will carry solo motorists too, for a premium, as with HOT lanes.

And after a study is done next year, the SR 99 tunnel is likely to be automatically tolled when constructed, as Governor Chris Gregoire has stated. It will be two lanes in each direction, with rates that would probably vary by at least time of day. As with the SR 520 bridge, ride-sharers may be able to get a discount, but that’s yet to be decided.

These are some of the moving parts, but what about the whole? A clearer picture begins to emerge in the state Legislature’s 94-page transportation budget bill, recently signed into law by Gov. Gregoire. In that bill, legislators quietly took steps that could compel game-changing shifts. They will force the costs of peak-hour solo driving to top of mind, while establishing new revenue streams to help complete crucial missing pieces of the highway system.

With proper legislative guidance, this could also help fund more and faster express bus routes. For starters, Engrossed Senate Substitute Bill 5352 orders up for completion by September 30, 2010 “a comprehensive tolling study of the state route 167 corridor to determine the feasibility of administering tolls” including “the potential for value pricing to generate revenues for needed transportation facilities within the corridor.” A long-envisioned but largely unfunded extension of SR 167 to I-5 and the Port of Tacoma (map here) would yield big benefits.

The route’s build-out would allow moving freight faster and more safely, relieving regional congestion, and upgrading surface water quality and stream habitat feeding Commencement Bay. It doesn’t come cheap. WSDOT pegs the cost at $2 billion and notes that only $160 million in funding has been secured so far, mostly from the 2003 and 2005 state gas tax hikes. It’s not clear yet whether more HOT lanes or conversion to an all-lanes-tolled highway would be recommended for an SR 167 build-out. The former is an easier sell, but the latter would raise more money.

There’s more in ESSB 535 that could help establish a network of value-priced highways in Central Puget Sound. SR 167 and I-405 form a north-south regional super-corridor connecting three counties through the heart of some of the region’s most intense development. Realizing the effects of continuing population and jobs growth on the I-405 corridor, lawmakers in ESSB 5352 direct WSDOT by January 2010 to prepare for them and the governor “a traffic and revenue study” for the highway in King and Snohomish counties “that includes funding for improvements and high-occupancy toll lanes” and “a plan to operate up to two (HOT) lanes in each direction.” The state should ensure that the I-405 effort is synchronized with any major new phase of SR 167 planning, because real regional connectivity doesn’t hew to bureaucratic or cartographic divides.

ESSB 5352 also orders up by September 2010 a “value pricing,” tolling, and revenue study for the key Westside corridor of SR 509 — the highway portion of which runs north into SR 99, and southbound, stops abruptly at 188th Street west of SeaTac Airport. This, along with related projects, would improve safety, freight mobility, and airport access, and cut 1-5 travel times and congestion.

An excellent 2008 summary of the SR 509 project’s importance is here, from the “Envision Midway” stakeholders committee. The Kent Chamber of Commerce has also been forcefully advocating that funding solutions be developed at the state level for SR 509 and other major South End transportation initiatives. WSDOT reports that the tab for the long-sought 509 project is a daunting $1.1 to $1.3 billion, while available funds, mainly from the 2003 and 2005 state gas tax hikes, are a scant $86 million. An all-lanes-tolled financing component might be preferable to a strictly-HOT lanes approach; additional funding tools would be essential.

The transportation budget bill also directs WSDOT to prepare a study for the governor and Legislature by January, 2010 on how value-priced automated tolling will affect traffic flows on the new I-5 bridge across the Columbia River connecting Clark County, Washington with Portland, Oregon. Notably, the study must also examine the advisability of concurrently tolling the parallel I-205 bridge across the river several miles east of the I-5 crossing.

Though left unsettled in the last session, a similar question, wrapped around the current politics of tolling, looms in Puget Sound with respect to the 520 bridge’s southern cousin, the I-90 bridge. It will carry Sound Transit’s EastLink light rail in the current (center portion) vehicle express lanes, and those express lanes will be moved to the structure’s outside lanes. Toll revenue needs to be maximized on the I-90 bridge (as well as in the SR 520 corridor) to help pay for the new 520 bridge. The two parallel highways and bridges operate as an inter-dependent cross-lake east-west corridor.

The 520 bridge financing challenge is evident in this WSDOT summary – included in an agency update sent out just last week. It identifies a $2.6 billion funding gap in the project, even with new legislationproviding $1.2 billion from 520-bridge-only tolling revenue (and related bonding), and a very hopeful total project price cap set by the Legislature of $4.6 billion. Informed sources say tolling the I-90 bridge could yield another $1.4 billion, though that still leaves a shortfall of $1.2 billion for the Legislature to address through federal or local sources, or perhaps somehow, cost savings. The WSDOT update also shows that state gas tax revenues provide little more than a tenth of project costs.

There are ways to help skin this cat, with voter approval of taxes and a more extensive, corridor-based approach to tolling. State Sen. Ed Murray (D-Seattle) with co-sponsors Sen. Fred Jarrett (D-Mercer Island) and Sen. Jeanne Kohl-Welles (D-Seattle) in SB 5493 last session introduced the idea of a regional transportation corridor authority to develop a proposal for voters that could use “variable pricing” (a.k.a. “value pricing”) tolling revenues, plus a local vehicle excise tax of eight-tenths of one percent and federal grants to fund a comprehensive congestion-busting, multi-modal plan for the I-90/SR 520 corridor. It stalled in committee but is likely to be re-introduced in a coming session.

Generally speaking, corridor authorities with such powers would be a good idea not only for our major east-west corridors but our north-south ones, and perhaps for Spokane and the Clark County-Portland region. What about I-5? At the very least, it needs bi-directional HOT lanes between downtown Seattle and Northgate to ease congestion and help pay for the almost $2 billion in crucial but unfunded pavement and interchange reconfiguration work on that stretch. A broader, Tacoma-to-Everett HOT lanes tolling framework on I-5 is probably needed too, utilizing existing or planned HOV lanes wherever possible.

Over time, revenue can only accrue in sizable amounts from highway value pricing in Central Puget Sound if optimal travel times are assured, and that means tolling at least some lanes in each direction on long stretches of all major metro region highway corridors, rather than just tolling a small portion of a corridor such as a bridge or tunnel. The political appetite doesn’t exist yet in Puget Sound for full-on corridor-length tolling, though the nine miles of SR 167 HOT lanes are an important step in that direction.

The ground is gradually shifting, though. The new corridor-specific studies in the state transportation budget bill don’t come from out of the blue. They build on earlier findings. A 2006 WSDOT report titled “Congestion Relief Analysis,” ordered by the Legislature, found total surface travel delay could increase by three to five times in Central Puget Sound, Vancouver, Washington, and Spokane by 2025, barring technological breakthroughs or major changes in the individual decision-making factors around driving. Large-scale roadway expansion could reduce delay but would be too costly and get overtaken by growth, while transit alone was insufficient to solve the problem, according to the report. It identified as an especially appropriate response regional “value pricing” including HOT lanes, plus an emphasis on combined roadway and transit improvements in key corridors.

Fine, but how are political leaders going to sell highway user fees to the tax-averse public? A 2007 report from WSDOT, the PSRC, and King County looked at focus group reactions to tolling options and found broader support for allowing motorists the choice between HOT lanes and free lanes, as opposed to the less immediately-salable approach of tolling all lanes in a heavily-trafficked corridor. Respondents also indicated that terms such as “flexible tolling” and “express tolling” sounded better to them than “congestion pricing,” or “road “pricing.”

Adding heft to the possibility of implementing “flexible tolling” on the Big Daddy of congested Puget Sound and West Coast highways, I-5, is this report, “Moving Washington; Puget Sound: West Side Corridor.” An “insert” from WSDOT report, issued last September, somehow managed to escape broad notice. Discussing I-5, it boldly declares:

Converting existing HOV lanes to variably tolled express lanes under the Good To Go! system will ensure buses, vanpools, and carpools a toll-free, reliable commute and offer other drivers the same when they need it most.

Of course, implementation of I-5 HOT lanes would depend on the leadership of the Legislature and the governor. And effectiveness would depend on whether the express-toll-lane option seamlessly continues on to value-priced lanes of some sort when drivers merge with other highways from I-5. That’s the nub of the matter: it can’t be a halfway kind of deal. You’re either on the bus or you’re off the bus, to quote Ken Kesey who with his Merry Pranksters once cavorted along the West Coast in a swirly-painted school bus named “Further.” The trick will be at least four-fold:

• finding the political will to institute HOT lanes, or where necessary financially, to toll all lanes, not just on little bites of our major highway corridors but on longer stretches instead, with miles traveled and ride-sharing factored into the rate structures;
• making sure to include in the regional value-pricing plan all major highway corridors, such as I-5 and I-90, SR 18, SR 16, the planned SR 704 Cross Base Highway, and US 2;
• raising supplemental revenues and investment as needed to complete tolled mega-projects;
• and ensuring robust suburb-to-suburb express bus service using the new system of value-priced corridors.

This tack will be especially important for the next 10 to 15 years; not only to help raise money, ease peak-hour congestion and provide better corridor-based transit choices, but also to signal more directly to motorists that their different decisions must carry out-of-pocket costs better aligned with their social costs, such as congestion and vehicle emissions. However, highway value pricing through electronic tolling, as much as it needs to be made whole, isn’t the be-all and end-all of a broadened user fee culture for drivers. Eventually, we’ll have to give close consideration to charging drivers by the mile on all roadways, with discounts for off-peak use, ride-sharing, and lower weight (typically more fuel-efficient) vehicles.

Wait, some say. Just raise the gas tax. Feh. Look again at the WSDOT fact sheets (linked above) on the SR 167 extension, the new SR 520 bridge and the SR 509 build-out. You’ll see that even if the gas tax proceeds currently secured for those projects were doubled or tripled (very unlikely), the total take would still be nowhere near what’s needed for completion. The by-the-gallon gas tax will be part of the puzzle for a while longer but it’s spread way too thin, and that trend will accelerate as more fuel-efficient vehicles continue to gain in popularity and surface transportation funding needs keep multiplying with growth.

Such factors are partly why ESSB 5352 also directs the Legislature’s joint transportation committee to do a new study of future-focused funding options. In the meantime, the Gregoire administration is all over the heightened emphasis on tolling revenue to help fund lagging transportation infrastructure. Transportation Secretary Paula Hammond discussied the new fast-track studies ordered by the Legislature, and their likely implications for policy-makers, in a presentation this week to the state transportation commission.

Knotty traffic exacts a huge toll on work, family, and health. We’re in line for Los Angeles level congestion unless we get moving. But given the region’s usual pace of getting things done, building a comprehensive value-priced regional highway system is a tall order. Will our elected leaders be equal to the challenge, which includes making the case to the public, suffering criticism, and taking political risks? Maybe so; the deep-bored tunnel decision, though a narrower issue, showed real moxie. The answer will help determine whether Central Puget Sound is really ready to compete in the 21st Century global economy.

Matt Rosenberg is a senior fellow at Cascadia Center of the Discovery Institute.