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5 Equity and Decision Making Experience with Road Pricing In communicating with the public, decision makers often focus on whether the end results of the transportation projects they decide to fund are fair, particularly from a geographic perspective. The equity implica- tions of the project ﬁnancing mechanisms themselves, which are often complex, have attracted relatively little public scrutiny; however, the pos- sibility of a major shift in the ways that revenues are collected for trans- portation has focused attention on who pays for and who beneﬁts from transportation, particularly in the case of road pricing. Politicians, the public, and transportation experts have all raised questions about the possible equity implications of road pricing, with the impact of road tolls or fees on low-income motorists attracting particular concern. This chapter discusses the ways in which equity has entered into debates over road pricing, noting the decisive role of public opinion about equity in determining the success or failure of road-pricing proposals. The mea- surement of public opinion about evolving transportation ﬁnance mech- anisms is discussed, and the results of an analysis of public opinion surveys on the acceptability of road pricing are presented. The ﬁnal section of the chapter discusses lessons learned about the role of equity in efforts to implement road pricing in the United States and overseas and identiﬁes four strategies that decision makers may ﬁnd useful when addressing equity concerns with their constituents and other stakeholders. EQUITY IN DEBATES OVER ROAD PRICING Geographic Equity Predominates As discussed in Chapter 3, transportation equity debates are often ﬁrst and foremost about geography, with elected ofﬁcials keen to demonstrate 102
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Equity and Decision Making 103 that their policies are bringing resources and other beneﬁts to their con- stituents. Moreover, geographic equity has a strong statutory basis. The 2005 Safe, Accountable, Flexible, Efﬁcient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) focuses exclusively on geographic equity in specifying the percentages of federal highway aid apportionments to be received by states (Altshuler 2010), and those apportionments are a major source of the revenue used by states to fund highway needs. In the case of transit, federal resources are distributed by urbanized area, that is, on a geographic basis. Many states have adopted formulas based on geography for distribution of transportation funds. California, for example, has guaranteed county shares for highway funds for 58 counties, and there is a strong return-to-source bias in the state’s Transportation Development Act program for public transit. For politicians and other decision makers, one of the ﬁrst hurdles to overcome in embarking on a new transportation program or project is to gain public support, and voters care primarily about what affects them, be it their neighborhood, their travel corridor, or their region. In addition, because states are the major funders of many transportation projects, deci- sion makers go to considerable lengths when preparing their transporta- tion capital programs and budgets to ensure that resources are distributed around the state in a way that is widely perceived as fair. In the case of major projects—the construction of a new road or transit line, for example—resource limitations generally mean that each region or area must wait its turn for state or federal funds. In any given year, the state’s transportation budget may appear to favor one or two areas of the state over others because of investments in major projects, but over time, deci- sion makers may have the opportunity to distribute major projects among different regions and to avoid unduly favoring one area over another. Nonetheless, the basis of geographic fairness—per capita, per voter, per jurisdiction, per mile of roadway, or per square mile—can itself be the sub- ject of considerable debate, and states typically use a number of factors in addition to population in deciding how to distribute transportation funds (Dempsey et al. 2000). The focus on geographic equity is closely tied to the U.S. system of gov- ernment, with elected ofﬁcials representing jurisdictions organized on a geographic basis. Consequently, this focus is unlikely to be supplanted by
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104 Equity of Evolving Transportation Finance Mechanisms other equity concerns when the implementation of road pricing is con- sidered. Nonetheless, some observers have suggested that the concept of geographic equity is incompatible with asymmetric patterns of transporta- tion use and that most of the resources should go to regions with the most people and goods requiring transportation. For example, an urban area encompassing a transportation hub would, under this approach, receive a greater share of funding than a rural area with a low population density. The question of what constitutes fair use of road-pricing revenues from a geographic perspective is far from settled, as noted in Chapter 3. In some places, the revenues are reserved for the tolled facility, in others they contribute to highway revenues more broadly, and in still others, some portion is dedicated to ﬁnancing adjacent transit service to provide an alternative to driving and paying tolls. Still others argue that earmark- ing revenues to the jurisdictions through which tolled facilities run would be a fair and efﬁcient way to distribute the revenues (King et al. 2007). As already noted, however, many of the questions about the fairness of road pricing concern income equity. For example, in a survey of news- paper articles discussing the fairness of a high-occupancy toll (HOT) lane project, Weinstein and Sciara (2004) note that fairness was deﬁned with reference to income and the corresponding ability to pay HOT lane fees. The most commonly raised concern was that low-income groups would be unable to afford to use the facilities and that HOT lanes would, therefore, disproportionately beneﬁt high-income drivers. In a similar vein, the report of the National Surface Transportation Infrastructure Financing Commission discusses the impacts of compre- hensive road pricing based on vehicle miles traveled (VMT) on different income groups under different implementation scenarios (NSTIFC 2009). According to the commission, a VMT pricing system implemented so as to increase total transportation revenues would likely have a greater impact on those with lower incomes (i.e., would be regressive). Given that a VMT pricing system would complement or replace revenue instruments that are also regressive, however, the shift would likely have a minimal effect on income-based equity. Notwithstanding, “the increased trans- parency of costs associated with road pricing could lead those who are more price-sensitive (particularly lower income individuals) to perceive a higher cost and to travel less” (NSTIFC 2009, 146).
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Equity and Decision Making 105 The Importance of Perception The example of possible reactions to a VMT pricing system highlights the importance of perception in determining people’s views about the fairness of transportation ﬁnance policies. Behavioral economists have documented the status quo bias effect, whereby people often strongly favor the current situation (in this case, current transportation ﬁnance policies) over potential alternatives (such as road pricing) without con- sidering the relative merits of current and alternative options (see, for example, Samuelson and Zeckhauser 1988). Furthermore, loss aversion motivates interest groups to fear potential losses under a new ﬁnancing regime, and therefore to argue against losses (real or perceived) vis-à-vis the status quo as unfair (Kahneman et al. 1991). For example, Weinstein and Sciara (2004) cite the response of Staten Island motorists to changes in bridge and tunnel tolls introduced by the Port Authority of New York and New Jersey in 2001. These motorists protested the revised tolls, argu- ing that their island geography and limited transit service made them more car-dependent than peer communities in the region. As a result, the Port Authority retained the original toll structure for Staten Island motorists, who ended up paying a higher average toll than they would have done under the new toll structure. According to a Port Authority ofﬁcial, however, Staten Island drivers appreciated the fact that their wishes had been respected and, in the ofﬁcial’s view, they perceived the outcome as fair. As later sections of this chapter illustrate, popular and political views about transportation ﬁnance equity are often inﬂuenced more by per- ceptions than by empirical evidence about the equity of different ﬁnance policies. Nonetheless, as noted by one of the participants in the commit- tee’s September 2009 symposium, perceptions of equity constitute the reality that politicians have to address. Road Pricing Often Perceived as Unfair The idea of road pricing is unpopular with many decision makers and members of the public, in part because it is perceived as unfair (Taylor and Kalauskas 2010). May and Sumalee (2003, 87) make a similar obser- vation in their overview of road-pricing applications outside the United
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106 Equity of Evolving Transportation Finance Mechanisms States: where road-pricing proposals fail, one of the major barriers to implementation is “lack of political commitment reinforced by limited public acceptance and concerns about equity.” Many road-pricing propos- als have fallen victim to political objections, and even proposals that have ultimately been implemented have met with considerable opposition from elected ofﬁcials, the media, and the general public at one or more stages in the planning and approval process because of concerns about fairness. HOT lanes and cordon tolls in particular have been scrutinized intently on equity grounds (Taylor and Kalauskas 2010). Despite evi- dence that HOT lanes are not as regressive as the moniker “Lexus lane” suggests (Schweitzer 2009), some media reports continue to foster the image of rich solo drivers roaring past trafﬁc snarled in the congested free lanes (see, for example, Weinstein and Sciara 2004, Appendix C). Cor- don tolls such as those implemented in London and Stockholm, Sweden, and proposed for New York City have been characterized as unfair because they impose a fee on something that was previously free, charge residents to travel to and from home, disproportionately tax commuters to reduce trafﬁc in inherently congested central districts, and, unlike HOT lanes, do not offer drivers a free but more congested alternative (Taylor and Kalauskas 2010). These examples illustrate the importance of self-interest in people’s assessment of what is fair. “How will it affect me?” and “How much will I have to pay?” are key questions in determin- ing the response to any new tax or fee, particularly one that differs radi- cally from the status quo. In this context, Schaller (2009) observes that supporters of New York City’s congestion pricing proposal generally emphasized the anticipated societal beneﬁts, with related individual- level beneﬁts being of secondary importance, whereas opponents of the proposal focused primarily on individual-level impacts on drivers. Differences in Popular and Expert Perspectives In early 2009, Massachusetts Governor Deval Patrick proposed raising the state gas tax by 19 cents, to 42.5 cents per gallon, to raise approximately $500 million a year in transportation revenue that would otherwise have to come from raising highway tolls; however, this proposal was defeated by the state legislature, which instead raised the sales tax by 1.25 percent- age points. According to reported estimates, this sales tax increase will
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Equity and Decision Making 107 generate $900 million annually in state revenue, of which $275 million will be allocated for transportation projects (Altshuler 2010). Massachusetts is not the only jurisdiction to have resorted to an increase in sales taxes—as opposed to an increase in user fees such as the gas tax— to fund transportation. Wachs (2003) and Schweitzer and Taylor (2008) report a growing use of local option transportation taxes since the 1990s to make up shortfalls in transportation revenues, with local sales taxes being particularly popular. Altshuler (2010) and Wachs (2003) both suggest rea- sons behind the popularity of sales taxes, noting that small rate increases in the sales tax can raise as much revenue as far larger, and therefore more vis- ible, increases in fuel taxes. According to Wachs, one county in California estimated that a 1 percent countywide sales tax increase would produce as much added revenue for transportation as would a motor fuel tax increase of 16 cents per gallon. In addition, sales tax increases can be structured to support multiple services and thus attract constituencies beyond trans- portation, and they may help solve perceived problems of geographic equity. Sales taxes are administered at the state, regional, and sometimes local levels where, by deﬁnition, the funds stay with local projects. When it comes to fairness, however, many analysts agree that the use of sales taxes to fund transportation is less equitable than the gas tax or other user fees on the basis of several equity criteria, including beneﬁts received and costs imposed (see, for example, Weinstein et al. 2006). While all of these revenue instruments are income regressive, user fees impose the costs of building and maintaining the facilities directly on travelers and system users, who are the primary beneﬁciaries. In contrast, sales taxes are paid by users and nonusers of the transportation system alike and, furthermore, make no distinction between occasional and heavy users. To quote Wachs (2009, 7): “In contrast to the ‘drive less, pay less’ fuel tax user fee, sales taxes charge light or occasional users of the transportation system far more per mile traveled, while frequent heavy users of the transportation system tend to pay far less for each mile of travel.” In addition, using sales taxes for transportation may divert revenues from essential services for which user fees are unavailable or undesirable, such as schools and libraries (Wachs 2003). In one of the few detailed quantitative comparisons of different trans- portation ﬁnance mechanisms, Schweitzer and Taylor (2008) compare
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108 Equity of Evolving Transportation Finance Mechanisms the effects of congestion pricing and transportation sales taxes on low- income households in Southern California. For the speciﬁc HOT system examined, the authors conclude that, had the facility been ﬁnanced by a local-option transportation sales tax, the cost of the sales tax to each fam- ily would have been comparatively small. The burden associated with a shift from tolls to sales taxes would, however, be regressive for all but the highest income groups; the poorest households, in particular, would see the largest proportional increase in burden with a shift from congestion tolls to sales tax ﬁnance. In addition, when sales taxes are spent on trans- portation projects that beneﬁt users of an improved facility, cost burdens are redistributed from users to nonusers; that is, resources are trans- ferred from lower income households, which tend to use the facility less, to those with higher incomes, who tend to use it more. In contrast, the costs of HOT lanes fall on users in proportion to their beneﬁts received, and these users come predominantly from middle- and upper-middle income households. As the preceding paragraphs illustrate, politicians and voters have been moving toward reliance on sources of transportation revenue that bear little or no relation to use. Sales taxes have proven popular, but by severing the user-pays link, they are less equitable than direct user pric- ing on the basis of the beneﬁts-received and costs-imposed concepts described in Chapter 3. Thus, in contrast to politicians and voters, many transportation experts increasingly favor direct user pricing as inherently fairer (and more efﬁcient) than the current system. For example, follow- ing a discussion of ways of ﬁnancing transportation infrastructure in California, Wachs (2009) concludes that direct charges, levied at the time and place roads are used by means of electronic collection systems, are fairer than sales taxes and also offer the greatest promise in the longer term for both congestion management and revenue generation. THE ROLE OF PUBLIC OPINION Public support for or opposition to transportation proposals can have an important inﬂuence on policy makers’ priorities and actions, as the example of the proposed Massachusetts gas tax increase illustrates. As the preceding discussion notes, fairness is subjective, so both measuring and
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Equity and Decision Making 109 shaping public opinion are important parts of the transportation plan- ning process if equity is to be addressed seriously. Measuring Public Opinion Public opinion measured in accordance with rigorous survey methods designed to ensure accurate results can inform decision making in ways that self-selecting channels (e.g., letters, newspaper editorials, blogs) can- not. For example, careful surveys can report accurately on people’s views about proposed methods of funding transportation—what they know or want to know, whether they approve or disapprove, the reasons for their positions, and how strongly they hold their views. Such surveys can also identify the conditions under which a novel ﬁnance mechanism will ﬁnd more or less public acceptance; and they can test whether opinions are changing over time and give meaningful clues about the likely level of public acceptance of a proposed plan, program, or process. Discussion of the many factors affecting the quality and associated reli- ability of public opinion surveys is provided in a number of expert texts (see, for example, Babbie 2010; Converse and Presser 1993; Dillman 2000; Groves et al. 2009). Claims that survey results reﬂect public opinion are frequently unsupported, and it is generally difﬁcult for those who are not experts in survey methodology to distinguish reliable measurements of public opinion from inferior (biased or unrepresentative) products. The following discussion highlights some of the pitfalls that may prevent a sur- vey or poll from capturing accurately the opinions of the target population about evolving transportation ﬁnance mechanisms. Public opinion surveys target a sample of citizens via a written ques- tionnaire or through interviews conducted in person, by telephone, or by electronic media (e.g., the Web). For a survey to yield valid results, the sample of citizens needs to be representative of the larger population of interest, such as voters or users of a transportation facility or service. To this end, the sample needs to be probability based, which means that all respondents in the target group, including special populations (e.g., low- or high-income households, persons with disabilities), have an equal chance of participating. Nonprobability samples, such as “opt-in” surveys on the Web in which respondents select themselves based on their inter- est in the topic or a desire to earn money or prizes, do not yield valid (i.e.,
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110 Equity of Evolving Transportation Finance Mechanisms representative) results (Yeager et al. 2009). In addition, the size of the sur- vey sample should be sufﬁciently large to allow for reliable estimates of key population segments, such as minorities or users of a transportation service.1 And when the survey results are reported, the target or sampled group needs to be identiﬁed so the source of the survey results is known. If a survey is to provide accurate insights into public opinion, the ques- tions need to be carefully crafted and pretested to ensure that they elicit valid opinions. For example, researchers seeking to measure public accep- tance of an issue may ask a variety of questions. Some ask respondents if they “support or oppose” a proposed mechanism (Dill and Weinstein 2007; Harrington et al. 2001); others ask if they think it is a “good or bad idea” (Verhoef et al. 1997), whether they have a “positive or negative” opin- ion about it (Odeck and Kjerkreit 2010), “accept or reject” it (Schade and Schlag 2003), or are “willing to vote for or against” it (Fujii et al. 2004). The researchers’ goal is often to predict behavior—for example, whether peo- ple will protest a proposed funding approach for a transportation project or vote for or against it. Therefore, questions that ask for a decision such as support or opposition or a vote for or against are preferred to those that elicit general views such as being a good or bad idea. It is also possible to create questions that mislead respondents into giving a particular preferred answer, as in the case of “push polls.” Designed to shape, rather than mea- sure, public opinion, these polls include questions that plant information, and often disinformation, about a candidate or issue in the minds of those being surveyed. As this brief discussion illustrates, it is important to know what questions were asked and how they were stated when interpreting results of public opinion surveys. In the case of surveys to assess public opinion about evolving transporta- tion ﬁnance mechanisms, the proposed funding approach may well be new to the respondent, thereby placing a special burden on the researcher con- ducting the survey to communicate effectively how the mechanism will work, what it will accomplish, and how it will be paid for. Zmud and Arce (2008), in a synthesis of public opinion data on tolls and road pricing, found that the more speciﬁc the description of the mechanism in laying out 1 For some population segments (e.g., low-income households and persons with disabilities) sur- veys may need to be supplemented by other qualitative research methods, such as focus groups, to obtain reliable information.
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Equity and Decision Making 111 the beneﬁts and costs, the greater the support. In particular, support was higher for a particular ﬁnancing option when its beneﬁts were described as part of the survey question; for example, “Would you support congestion pricing if the money were used to prevent an increase in mass transit fares and bridge and tunnel tolls?” Higgins (1997) reached this same conclusion in his review of survey data on congestion pricing. He points out that when congestion pricing is described simply as a way to reduce congestion, with no other infor- mation provided, support is low; however, support increases when the mechanism is described as providing speciﬁc, rather than general, trans- portation beneﬁts. A survey conducted in Seattle, Washington, for King County Transportation (EMC Research, Inc. 2007) provides an interest- ing example. A series of questions that conveyed a great deal of informa- tion about the need to replace the State Route 520 bridge and make other improvements preceded the following ﬁnal question: Given what you have just heard, would you [support or oppose] a variable toll of one to seven dollars on the 520 and I-90 ﬂoating bridges to pay for replacement of the 520 bridge, maintenance on I-90, increased transit and bike investments, and new technology to improve trafﬁc ﬂow? The toll schedule would be ﬁxed with higher tolls during peak times and lower tolls during off-peak times. Thirty-ﬁve percent of respondents “strongly supported” and 33 percent “somewhat supported” this proposal. Thus, the results of public opinion surveys about new or complex trans- portation ﬁnance mechanisms can depend on the extent to which the sur- vey educates respondents. A survey that provides detailed and speciﬁc information about the beneﬁts and costs of the mechanisms may well yield different results from a survey that does not provide such information. Public Opinion About Transportation Finance Equity: Evidence and Experience To date, scientiﬁc public opinion research has not played a prominent role in identifying public concerns about the fairness of evolving transporta- tion ﬁnance mechanisms. Occasionally, however, survey respondents have been asked whether a certain ﬁnance mechanism is “fair,” either in general
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112 Equity of Evolving Transportation Finance Mechanisms or to a particular segment of the population. Income is the equity dimen- sion that has been addressed the most often in the peer-reviewed survey literature on the acceptability of transportation ﬁnance mechanisms. Sometimes transportation policy makers and planners simply assume that certain disadvantaged groups will be more likely than others to oppose a proposed ﬁnance mechanism. For example, some have sug- gested that people with higher income are more likely than those with lower income to accept certain evolving ﬁnance mechanisms, because members of the latter group have less disposable income and would be more adversely affected than those in higher income brackets (see, for example, Giuliano 1994; Rienstra et al. 1999). To test the validity of this suggestion, Mitchell (2009; personal communication 2010) reviewed published studies with samples of at least 200 respondents that used (a) public opinion surveys to measure the acceptability of one or more evolving ﬁnance mechanisms, and (b) multivariate analysis to determine which variables—particularly the socioeconomic characteristics of respondents—predict acceptance. He identiﬁed 12 studies that met these criteria and that were conducted in eight countries and published between 1997 and 2010 (see Table 5-1). Most of these studies were con- ducted for government organizations interested in implementing evolv- ing transportation ﬁnance mechanisms. The studies, which examined 21 instances of evolving ﬁnance mechanisms, were conducted by univer- sity researchers, and all used statistical models that assessed the role of different factors—including income—in acceptance while taking other variables into account. The central ﬁnding of Mitchell’s examination was that income is not a good predictor of people’s views about evolving transportation ﬁnance mechanisms; only two of the 21 cases studied (Verhoef et al. 1997; Odeck and Kjerkreit 2010) showed statistically signiﬁcant correlations between low income and opposition to pricing or tolling.2 None of the four Ameri- can studies found such income effects. For example Harrington et al. (2001) conducted a telephone survey of Southern California freeway users in 1997 to test their reaction to four pricing mechanisms involving congestion 2 Jakobsson et al. (2000) reported an income effect, but the effect disappeared when they reanalyzed the same Swedish data using a more appropriate statistical test (Fujii et al. 2004).
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118 Equity of Evolving Transportation Finance Mechanisms BOX 5-1 (continued) New York City Congestion Pricing Proposal claimed that they would be geographically isolated because commuters driving through Manhattan to New Jersey would be forced to pay a toll to cross Manhattan. • Concerns about the burden of the congestion fee on low- income households were raised by poverty advocates, by elected ofﬁcials representing low-income districts, and by a number of politicians representing wealthy suburban districts. • Proponents claimed that the proposal represented a more equi- table distribution of burden than the current system, because the revenue collected from drivers would be used to fund transit improvements beneﬁting the residents of New York City. would be unfairly affected by the proposed strategy. Economic fairness was also an issue, with some opponents claiming that implementation of the proposal would impose an unfair burden on low-income families. The New York City experience shows that concerns about who pays and which areas might be negatively affected can be “multifaceted and murky” (Taylor 2010, p. 43). For example, the likely air quality impacts on low-income residents living in areas outside of the priced zone were a subject of disagreement between opponents and proponents of the proposal. Opponents claimed that some of the city’s poorest neighbor- hoods bordering the priced zone would be transformed into parking lots for those driving in from outlying areas, as a result of which the promised improvement in local air quality would not materialize. In contrast, pro- ponents thought reduced trafﬁc from outlying suburbs en route to the central business district would result in improved air quality and public health for lower income residents. Observers have suggested that there may be a tactical (or political), motivation behind some claims of inequity, with critics seeking primarily to build a coalition to block a distasteful proposal rather than expressing sincere concerns about its fairness. In discussing the New York City
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Equity and Decision Making 119 congestion pricing proposal, Taylor (2010) suggests that some concerns about the burden of the congestion fee on low-income groups may have been largely tactical, citing one city councilwoman who questioned the sin- cerity of elected ofﬁcials from suburban communities who claimed to be concerned about the impact of congestion tolls on lower income residents. In the same vein, Wachs (1994) notes that concern over the plight of the poor under various pricing proposals is frequently made by self-interested parties (e.g., trucking, auto clubs) who “seem to have little concern over the well-being of the poor or of working women when considering other policy initiatives, such as sales tax increases to support the expansion of rail lines” (as cited by Taylor 2010, 12). Nonetheless, while some people may feign concern about the poor while opposing road pricing on other grounds, the concerns expressed about the poor may in fact be justiﬁed. Guidance for Addressing Equity Concerns A number of authors have examined the lessons learned from efforts to implement road pricing in the United States and overseas and have used these lessons to develop guidance about ways to address equity concerns in transportation projects involving road pricing (see, for example, Schaller 2009; Taylor and Kalauskas 2010; Weinstein and Sciara 2004). This guidance highlights the value of documenting equity outcomes of road pricing to provide a resource for others. From the analyses of road-pricing proposals and projects, four tactics emerge as particularly useful for addressing equity concerns: • Determining where and how revenues are used, • Incorporating equity analysis into project planning, • Demonstrating beneﬁts through experimental programs and pilot strategies, and • Using a variety of public outreach and educational tools. The following discussion of these four approaches is intended to help decision makers assess and address equity issues arising in debates over road pricing. The intent is not to advocate for the adoption of road pricing, but rather to encourage informed and constructive discussion of equity issues among public officials and their constituents and stakeholders.
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120 Equity of Evolving Transportation Finance Mechanisms Use of Revenues Taylor and Kalauskas (2010) observe that the use of toll revenues is likely to have a profound effect on both the actual and perceived equity of a road-pricing project. Weinstein and Sciara (2004, 13) echo this observa- tion for the speciﬁc case of HOT lanes, noting that the way revenues are spent can “greatly affect whether people believe the project is fair or not.” Both of the aforementioned sets of authors emphasize the impor- tance of returning revenues to the tolled corridor or geographic area to assuage public concerns about geographic inequities. In the context of Minnesota’s I-394 MnPass system, for example, Weinstein and Sciara (2004, 13) quote a policy advisor’s observation that “when you tell peo- ple that the money goes back into the corridor, people are satisfied.” Greater London Mayor Ken Livingstone, advocating in favor of his congestion pricing proposal, emphasized that his plan would improve bus operations by reducing congestion and also generate substantial net revenue for other transportation improvements in central London (Altshuler 2010). King et al. (2007) make a similar point, arguing that revenues from road-pricing projects should be dedicated primarily to the communities through which priced highways run, because these communities bear the brunt of the traffic, noise, and pollution gener- ated by congested roads. This approach does not necessarily mean returning the benefit of the tolls to those who pay them, but rather delivering a geographically specific benefit to build a constituency for the pricing strategy. In a situation where revenues are returned to the tolled corridor or geographic area in the form of area transportation projects, the division of these revenues between highway and transit projects may well be an issue for further debate because of concerns about modal inequities. For example, Taylor (2010) cites the cases of Stockholm and New York City, where initial transit funding proposals were downsized and funds shifted to road improvements in response to complaints that funding transit alone was unfair to drivers and their passengers. On the other hand, dedicating toll revenues to transit has frequently proven a good strategy for assuaging equity concerns. Schaller (2009) notes that the support of New York City residents for the congestion pricing proposal was contingent on the revenues being used for expanded transit service and cites concerns among residents in parts of Queens, Brooklyn, and
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Equity and Decision Making 121 the Bronx that revenues might not be spent effectively on transit service improvements. The observations outlined above are consistent with the results of a synthesis of public opinion data on tolls and road pricing (Zmud and Arce 2008) that identified a number of factors—including the use of revenues—that affect public acceptance of these ﬁnance mechanisms. In particular, support was found to be higher when revenues went toward improved transit or stayed in the locality. In discussing ways of addressing equity concerns over HOT lanes, Weinstein and Sciara (2004) mention the possibility of using revenues to provide compensation to those who cannot afford tolls, perhaps in the form of alternative beneﬁts. In practice, however, funding issues often limit opportunities to implement remediation strategies, as noted in the discussion of remedying inequities in Chapter 4. Equity Analysis in Project Planning Taylor and Kalauskas (2010) emphasize the value of addressing equity explicitly at the outset of a project and of conducting analyses and forecasts that can provide information needed to answer speciﬁc questions about who will pay and who will beneﬁt. Considering equity early in the project planning process increases transparency, encourages planners to address equity concerns, and also allows time to modify project designs in response to equity concerns raised during public debate over the proposals. Weinstein and Sciara (2004) also note the importance of analysis for assessing the fairness of HOT lane proposals. They observe that useful information may be obtained by analyzing the demographic characteris- tics of both those living and working in the candidate corridor and poten- tial users of the proposed HOT lane and then conducting attitudinal surveys and focus groups with members of these populations to ascertain people’s perceptions of HOT lanes and their willingness to use them. Experimental Programs and Pilot Strategies In discussing the lessons learned from New York City’s failed cordon pricing proposal, Schaller (2009) emphasized the importance of demon- strating the promised beneﬁts of pricing projects through experimental programs and pilot strategies and also noted that experience counts
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122 Equity of Evolving Transportation Finance Mechanisms more heavily than analysis or plans when members of the public come to assess the fairness of a project. Analyses of the Stockholm and London cordon pricing strategies con- ﬁrm that experience can indeed help build support for these projects. The Stockholm cordon pricing system was adopted permanently only after a 6-month trial had demonstrated the beneﬁts and allowed for a series of modiﬁcations to address equity concerns (Taylor 2010). As Tay- lor notes (2010, 21), the pilot test allowed the residents of Stockholm “to see ﬁrst-hand the dramatic congestion reductions of the pricing program and allow[ed] planners to adjust the program to address equity concerns that arose during the test.” Similarly, in the case of the central London congestion charging strat- egy, both press coverage and the balance of local opinion shifted in favor of the strategy after its implementation in February 2003. Congestion was reduced and buses moved faster and more reliably, and a July 2003 poll of London residents reported 63 percent viewing the system favorably in general and 66 percent rating it fair (Altshuler 2010). Nonetheless, the success of the initial London congestion charging strategy did not trans- late into easy expansion or replication, and the process of removing the Western Extension to the original charging zone is ongoing. Public Outreach and Education Evidence from a number of road-pricing initiatives highlights the impor- tance of dialogue with stakeholders in addressing concerns about pos- sible inequities, regardless of whether the proposals were ultimately implemented or rejected. For example, Weinstein and Sciara (2004) rec- ommend that agencies considering HOT lane projects foster community dialogue with the dual aim of (a) identifying equity concerns that might otherwise be overlooked and (b) educating policy makers, the media, and the public at large to forestall misleading or inaccurate claims about equity that could cause costly project delays.6 Community dialogue can be helpful in addressing equity concerns, as illustrated by two examples. First, modiﬁcations to Mayor Bloomberg’s 6 Mahendra et al. (2011) provide a literature review on road pricing, communication, and engage- ment. Higgins et al. (2010) provide further guidance on road-pricing communication practices.
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Equity and Decision Making 123 original congestion charging proposal for New York City were recom- mended by the Trafﬁc Congestion Mitigation Commission following a series of public hearings (Schaller 2010). The changes incorporated in the ﬁnal plan responded to public comment on the plan’s complexity and fairness and were observed to build greater support for the commis- sion’s recommendations, despite the plan’s eventual demise. Second, in the case of the I-15 HOT lanes, Taylor (2010) observes that the San Diego Association of Governments incorporated public opinion surveys into the planning process and was thus able to modify the project design to address equity concerns as the project evolved. These examples illustrate the importance for policy makers of listening to equity concerns and adapting their proposals accordingly. They also highlight the value of an equitable decision-making process that allows meaningful participation by stakeholders (see Chapter 3). Nonetheless, the lessons learned from individual examples may be case-speciﬁc, and there is no information about what would have happened in the absence of community dialogue. Thus, caution is needed in framing general conclusions on the basis of a relatively small number of case studies. Several authors have observed that road-pricing concepts are not well understood by the American public or by many politicians. Conse- quently, education initiatives targeting a variety of audiences can be a key component of efforts to address equity concerns associated with road pricing. Both Weinstein and Sciara (2004) and Taylor (2010) cite the I-394 MnPass HOT lanes implemented in the Minneapolis region in 2007 as a case where education played an important role in informing the equity debate. Criticism of the initial 1997 demonstration project pro- posal was based largely on equity concerns that emerged when people thought of HOT lanes as “Lexus lanes.” In 2001, the Minnesota Depart- ment of Transportation and the Twin Cities Metropolitan Council part- nered with the University of Minnesota’s Humphrey Institute to conduct local and regional workshops on road pricing and address citizens’ con- cerns. The partnership also established the Value Pricing Advisory Task Force, which represented key stakeholder groups and championed a new HOT lane demonstration project proposal. As a result of the ensuing public dialogue, public acceptance began to grow and eventually led to bipartisan support for the project.
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124 Equity of Evolving Transportation Finance Mechanisms CHAPTER HIGHLIGHTS • Understanding public opinion is important if equity is to be addressed seriously in the transportation planning process; however, not all public opinion surveys are conducted according to the rigorous stan- dards needed to capture accurately the opinions of the population(s) of interest (e.g., low-income motorists, the elderly, transit riders). Surveys that do not meet rigorous standards can give distorted results, so care is needed in interpreting survey results. • High-quality public opinion surveys have shown that members of low-income groups do not oppose congestion fees and HOT lanes any more strongly than other groups, and may even be slightly more in favor of these ﬁnance mechanisms. This evidence contradicts the assumption that lower income people, having less disposable income, would be more likely to oppose road tolls, cordon charges, and other usage fees than those in higher income brackets. • Four strategies may prove helpful for decision makers seeking to engage their constituents and stakeholders in informed discussions about the fairness of road-pricing proposals: – Explaining how road-pricing revenues will be spent is critical in determining whether people view a project as fair. – Addressing equity explicitly at an early stage and often in the proj- ect planning process increases transparency and allows time to modify project designs in response to equity concerns. Analyses and forecasts providing information about who will pay and who will beneﬁt are particularly valuable. – Experimental programs and pilot projects can help to (a) test a ﬁnancing mechanism and (b) educate both policy makers and the public about how the mechanism works in practice and give them a better appreciation of the costs and beneﬁts to both the individual and the larger community. – Public education activities are particularly important in explaining how a proposed road-pricing strategy is expected to work in practice. In addition, public engagement through community dialogue is needed in the decision-making process. If decision makers are will- ing to listen, learn, and adapt, such dialogue can lead to an improved proposal that is less likely than the original to be criticized as unfair.
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