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Planning Guide: Developing Road Pricing Plans and Programs 47 Exhibit 21. (Continued). Emerging Directions Lane reconfigurations to add capacity for pricing, e.g., dynamic use of shoulder lanes as travel lanes, and re-striping. SR-91 and ongoing studies provide increased familiarity and credibility for planning and stakeholder engagement, including I-15 managed lane extension for San Diego; plans for Houston I-10 (Katy) reconstruction; Dallas I-30; SR- 520 in Seattle; and network studies for I-95/JFK Expressway in Baltimore; I-270 and I-495, National Capital Region (Beltway and I-95/395); and San Francisco Bay Area (800-mile network). Success Considerations Attend to phasing stages, potential diversion, and ingress/egress from pay to free lanes for ease and safety of transition. Develop explicit benefit plan for new revenues dovetailing with goals and mitigation concerns (e.g., need for new facility, guaranteed free flow, revenues dedicated to source, easy payment technology, and improved transit for broad appeal). Consider a mix of fund sources other than tolls for financial feasibility. If publicprivate partnership is involved, heed cautions about public concerns over private buildoperate monopoly position and non-compete clauses prohibiting construction of competing facilities. As with other pricing strategies highlighted in this section, the purpose is to use electronic col- lection to vary prices by day of the week and time of day to reduce congestion. The variable prices are intended to encourage some travelers to use the roadway facility during less congested peri- ods, to shift to another mode of transportation, or to change their route. Toll authorities have introduced variable tolls to reduce peak-period congestion, gain more efficient use of facilities, delay capacity enhancements, encourage mass transit, and/or to raise revenues for facility improvements (often by using off-peak toll discounts to make an overall toll increase program more acceptable). Projects include: Variable pricing on two toll bridges--the Cape Coral Bridge and Midpoint Memorial Bridge in Lee County, Florida--implemented in 1998 with the goal of spreading traffic from peak to shoulder times and thereby postponing expensive bridge enhancements required to accommo- date growing peak traffic. Variable pricing on the New Jersey Turnpike implemented in 2000 and on interstate bridges and tunnels of the Port Authority of New York and New Jersey (PANYNJ) implemented in 2001 in the New York City region, intended primarily to gain better use of capacity by spreading peak- period traffic, while preserving revenue levels. The PANYNJ pricing also encouraged mode shift and increased use of electronic toll collection as objectives. Variable pricing on the Illinois Tollway implemented in 2005. Tolls apply to both cars and trucks; however, the truck tolls vary by time of day, with the aim of reducing peak-hour conges- tion on the facility. Exhibit 22 provides more information on variable pricing on existing toll facilities. 2.3.4 Areawide Pricing While the U.S. pricing programs to date have focused largely on introduction of variable pric- ing on single facilities, most of the road pricing efforts abroad have involved areawide or cordon- based congestion pricing. Many of these overseas pricing projects charge for entering or traveling within a congested zone (such as downtown). Some have focused on pricing traffic entering entire urban regions. Others have introduced congestion pricing on expressway networks.

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48 Road Pricing: Public Perceptions and Program Development Exhibit 22. Variable pricing on existing toll facilities. Planning Considerations Travel/Traffic Impact: A survey taken the year after the Lee County, Florida, toll discount program showed that 71% of eligible drivers shifted their time of travel at least once a week under 25 cents off-peak toll discount (elasticity estimates range between 0.36 and 0.03 depending on the time of day); travel time savings up to 20 minutes at certain locations observed under PANYNJ tolls with 7.4% of passenger trips and 20.2% of truck trips changing behavior (travel time, mode). Effect duration: May depend on periodic toll adjustments as motorists change their peak/off-peak travel in response to congestion and price. Traffic growth: General traffic growth can make off-peak shift less attractive over time, as in New Jersey Turnpike experience. Combined effects: Peak pricing and new electronic payment introduced together may boost travel time savings by reducing payment queues. Trucks: Smaller, independent trucks would be more likely to shift to alternative routes or travel times due to limited ability to pass along costs (e.g., Illinois Tollway); some truckers may not be able to shift travel times because of inflexible delivery schedules (PANYNJ experience). Revenue/Finance Revenues and costs: If much of the pricing infrastructure already in place, revenues likely to exceed operating costs (e.g., New Jersey, PANYNJ), unless designed to be revenue-neutral. Postpone capacity enhancements: May postpone bridge or road capacity enhancements by years (e.g., Lee County). Equity Experience to date shows income equity has not blocked programs and not a paramount issue in planning or focus groups and surveys; equity assessments are limited but a study of changes in electronic pass ownership before/after price changes in Illinois shows ownership rates increased across all income groups; equity concern may center more on those with inflexible work schedules. Environment Assessments limited, but after the introduction of variable pricing and electronic toll collection in New Jersey, vehicle emissions at toll plazas declined, probably due mostly to electronic payment. Policy/Institutional Authorization: Little or no required new policy or institutional formation with tolling authority and operations already in place. Cross state: Toll authorities across states may need to coordinate operational and pricing policies for electronic tolling (e.g., Indiana, Illinois). Coordination of programs with other toll and transportation agencies. Emerging Directions Motivators Potentially improved revenues, since peak travel demand is often relatively inelastic. Driver familiarity and acceptance of existing tolls. Congestion and travel time unreliability, delays, and accidents. Possible allies in businesses concerned with on-time delivery. Extra emissions from stop-and-go traffic. Promising Electronic technologies make variable pricing by time of day and vehicle class Developments easier to implement and customer friendly by accepting various payment types. New payment methods and channels may support possible integration of toll payment with payment for transit and parking. Technologies offer improved data collection on time of travel, frequency of travel, and vehicle mix for evaluation and planning. Lee County, Florida, PANYNJ, and Illinois Tollway provide recent, concrete examples to reference in planning. Success Considerations Keep the toll schedule simple and easily communicated; monitor off-peak congestion. Encourage receivers of goods to adopt flexible delivery practices. Mount adjunct campaign focused in part on large employers to encourage flextime. Consider timing off-peak discount with regularly scheduled general toll increase.

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Planning Guide: Developing Road Pricing Plans and Programs 49 Areawide pricing involves charging a fee to travelers entering and sometimes driving within a congested zone or area, typically in city centers, as a measure to reduce traffic congestion and encourage a shift to modes other than the auto. The charge may vary by time of day or vehicle char- acteristics. Although congestion reduction is often the primary objective, cities also seek to reduce emissions, noise, and traffic accidents and to improve pedestrian access and enjoyment of public spaces and businesses. Areawide pricing refers to pricing of vehicles entering and/or traveling into a zone, typically a congested downtown. Cordon pricing is similar in concept to areawide pricing in which drivers are charged fees each time they cross the cordon but not for travel within the cor- doned zone. Outside of the United States, areawide pricing has existed in Singapore since 1975 and has been implemented in several cities, mostly in Europe over the past decade, notably in London in 2003 and Stockholm in 2006. Within the United States, areawide pricing was proposed in New York City in 2007 and has been recently studied for San Francisco. The plan for New York City proposed a daily charge of $8 for cars entering lower Manhattan south of 60th Street to improve travel times and reliability in the city. The revenues from the congestion charge were proposed to be used for transit improvements and investment. This plan was not approved by the state assembly and is therefore not likely to be implemented soon. In San Francisco, planners are studying areawide pric- ing involving a $3 fee to enter, leave, or pass through certain parts of the city during peak hours, generating revenues in support of transit, cycling, and possibly more regional transit parking. Exhibit 23 provides more information on areawide pricing. Exhibit 23. Areawide pricing. Planning Considerations Travel/Traffic Traffic impact: Number of vehicles entering the charging zone dropped by 24% in Singapore (after 1998 conversion to electronic pricing), 14% in London (2007, after implementation of western extension), and 18% in Stockholm; 60,00065,000 fewer vehicles entered the zone per day and average travel speeds increased by 28% to 30% in both Singapore and London; higher traffic levels apparently have returned to London probably due to continued growth in auto use, increased bus traffic, construction and limited changes to the toll level to manage increased traffic levels. Travel time/speeds: Travel time reliability increased (journey times decreased by 14% in London); reduced speeds observed on bypass route around zone in Singapore and increased traffic observed on boundary route in London; in London, 20% to 30% of reduction in vehicles entering zone was due to travel during non-charging hours or diversion to bypass routes. Elasticity: Car trip to price elasticity found to be 0.4 to 0.5 in London; i.e., each 10% increase in user costs of auto travel (excluding parking) resulted in a 4% to 5% reduction in auto trips. Mode effect: Peak transit (bus) use in morning peak increased by 40% in London and over 30% in Singapore (helped by significant transit investment), with 4+ carpools increasing significantly; in Stockholm, transit use up 6% to 9%; increase in use of motorbikes and bicycles observed in London; no significant change in these mode shares in Stockholm. Duration: The traffic reductions in priced zones have been sustained over 30 years in Singapore and 5 years in London. Revenue/Finance Pricing revenues have been used in part for funding transit in London and Stockholm. Revenues have generally exceeded operating (administration, maintenance, and enforcement) and capital costs, though initial operations have been made more cost effective after implementation in London and Stockholm; in Singapore, revenues were nearly 10 times the operating costs of the pricing scheme; if capital costs are included, the revenues are still 2.5 times the costs; Singapore returns net revenues in excess of programmed transport needs back to motorists in the form of reduced taxes; for London, the revenues exceed twice the operating costs, and inclusion of capital costs brings this ratio down only marginally. (continued on next page)

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50 Road Pricing: Public Perceptions and Program Development Exhibit 23. (Continued). Planning Considerations Initial capital costs have ranged from $110 million in Singapore in 1998 to $410 million in Stockholm in 2006 and depend on technology and method of enforcement used. Equity Income inequity: Findings from Singapore attitudinal surveys show pedestrians, taxi riders, and residents outside the priced zone found the impact as neutral or negative while cyclists, bus passengers, and residents within the zone judged pricing as favorable; car drivers and passengers judged the program as mildly unfavorable; increases in transit were fairly uniform for low-, medium-, and high-income peak-period travelers; generally, the perception that congestion pricing is "unfair" to low-income drivers has not been a major concern in Singapore, London, and Stockholm after implementation. Geographic/spatial equity: Residents of neighborhoods outside the zone who work in the zone may perceive negative impacts, as in New York City and Singapore; residents of the charging zone receive significant discounts in London to meet concerns; residents of the island Liding in Stockholm are allowed free passage through the central charging zone as it is their only northsouth roadway option in Sweden. Business inequity: In Singapore, pricing did not change business conditions or location patterns and overall, the business community responded positively to the program; pricing in London has had broadly neutral regional economic impacts in the central zone and a majority of businesses continue to support the charging scheme, provided investment in public transportation is continued; there is evidence of some negative business impacts in the western extension of the London congestion charging zone which has a higher number of smaller businesses and retailers where they could not pass along costs to customers compared to larger business which could do so; in Stockholm no negative impacts identified on retail or household purchasing; after implementation of pricing. Economic impacts: After implementation of pricing, property values just inside zone found to be higher than those just outside zone in London. Environment Significant difference in emissions seen in London before and after implementation (between 2002 and 2003) and in Singapore. NOx 7% to 13% lower, PM10 7% to 9% lower, and CO2 10% to 15% lower; effects attributable to both vehicle technology changes and traffic impacts. Road safety improvements reported in Singapore. Land development impacts: Downtown-based areawide pricing may cause some businesses to move to suburban locations, though other businesses may find advantages to locating in an area with less traffic and improved transit and pedestrian access. Policy/Institutional Authorization: State legislation will be required for local authority to impose charges, monitor and identify vehicles for pricing and enforcement, and enforce charges and to allow contracting for any private sector role in operation of pricing system (charge collection and technology infrastructure operations). Operational policies: Enforcement authorization, fines, adjudication and appeal/processing procedures, and new organizational and staffing arrangements may be necessary. Agreements: Agreements must be made between agencies operating transit and pricing authority to ensure agreed-to transit service improvements and supporting revenues; in London and Singapore, a unified agency operates the pricing system, road network, and transit. Program procedure policy: Exemptions/discounts must be specified for any specific user groups, e.g., vehicle fleets, residents of charging zone, and drivers of two-wheelers and environmentally friendly vehicles (as in London). Emerging Directions Motivators Perceptions of severe congestion in charging zone and willingness to pay for time savings, enhanced safety and reliability, and improved transit access to zone. Possible allies in businesses concerned with travel delays for patrons and customers, shopper/commuter competition for parking, slow deliveries. Slow surface transit speeds, excessive noise, and tight funds for transit, pedestrian, and cycling investments.