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Road Pricing: Public Perceptions and Program Development (2011)

Chapter: Part 1 - Decision-Making and Planning Guide

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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
×
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Suggested Citation:"Part 1 - Decision-Making and Planning Guide." National Academies of Sciences, Engineering, and Medicine. 2011. Road Pricing: Public Perceptions and Program Development. Washington, DC: The National Academies Press. doi: 10.17226/14492.
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Decision-Making and Planning Guide P A R T 1

The transportation system in the United States faces a number of significant challenges, includ- ing inadequate funding, persistent traffic congestion, and associated problems related to pollution, global climate change, sustainable energy, and neighborhood and community quality of life in an automobile-oriented society. As governments attempt to cope with these pressing issues, the concept of road pricing has been receiving increased attention. Road pricing has gradually moved from economic and policy analy- sis to implemented projects both in the United States and overseas. It has proved effective in addressing the above challenges, while new electronic technologies have eased implementation without the need for manual toll connection. Also, the pilot testing and implementation of vari- ous road pricing approaches have spurred greater understanding of benefits, costs, operations, policy development, and acceptability. Evidence regarding successful implementation of road pricing projects points to the importance of carefully designed and targeted information dissemination and outreach efforts. Without excep- tion, early and continuing communication and engagement with the many stakeholders and potentially affected parties have been critical for public and political acceptance of pricing propos- als. Several road pricing proposals are known to have failed where communication and engage- ment were inadequate, intermittent, or not in line with lessons about practices most likely to bring success. Successful applications of road pricing have required attentive, responsive, respectful, and tailored communication and engagement. In addition to best practices in engagement and communication, successful road pricing plans and programs require sound planning practices. Planners need to analyze and present road pric- ing concepts that are most suitable and effective given local goals and high-priority problems that road pricing can address such as congestion, pollution, sustainability, and finance of transporta- tion infrastructure. Plans must be financially feasible, address equity issues, be operationally feasi- ble, and be sensitive to privacy concerns. Planned implementation must be in the hands of agencies trusted to carry them out and the planning process itself must be perceived as credible, responsive, and engaging of all affected parties. Required state and regional transportation planning processes can also play a role in the imple- mentation of road pricing. Thus far, road pricing has primarily emerged from planning involving individual corridors and areas but it is increasingly appearing in formal regional and state plans. In these plans, there are many analytic, policy, and institutional issues related to road pricing that must be attended to. For instance, long-range planning conducted by metropolitan planning organiza- tions (MPOs) and state departments of transportation (DOTs) relies on travel demand forecast- ing models, which typically are not well suited to address road pricing. There are challenges not only in projecting travel impacts accurately, but also for meeting federal requirements of air quality conformity in non-attainment areas. Projecting revenue generation reliably is another 3 Introduction

important issue, both for successful project implementation as well as for balancing costs and rev- enues as part of fiscal constraint requirements in regional transportation plans. Thus, the key chal- lenge is to address all these issues in both project and long-range planning processes so as to increase the chances of success in the near term and leverage that success toward greater acceptance in the future. In sum, road pricing is gaining favor as an effective way to cope with a number of issues that are now at the top of the agenda in state and local transportation agencies. Road pricing has strong potential to reduce congestion, address air quality issues, help raise transportation revenue, and address livability and sustainability issues. However, local and state planners need lessons and checkpoints based on the latest experience to evaluate and integrate a full array of road pricing strategies into transportation planning and project development. They also need approaches for addressing public and decision maker acceptability through effective communication if road pric- ing is to have the best prospects for successful adoption and implementation. The NCHRP Proj- ect 8-73 addresses these twin needs. Purpose of the Project and This Report The overarching goal of this project is to help state, regional, and local decision makers and planners to: • Understand a range of road pricing concepts • Determine which concepts may be most applicable, effective, and acceptable in light of the local environment and objectives • Provide lessons on communicating pricing proposals and developing project plans for best chances of successful implementation • Integrate pricing plans into regional and state planning processes to advance implementation This report focuses on road pricing where the primary objective is the reduction of congestion and associated problems while potentially supplementing or replacing declining traditional sources of transportation finance. Flat rate tolling is not included. With the intent of encouraging atten- tion to and implementation of road pricing beyond current programs, this report aims at the audi- ence of planners who are not very familiar with the concept but interested in knowing more about its potential, status, and key planning considerations. Structure and Use of This Report This report is divided into two parts. Part 1 offers guide points for planners and decision mak- ers needing an overview and introduction to pricing, as well as planning and acceptability lessons learned from a wide range of pricing projects. Section 1 of Part 1 describes the following six road pricing concepts for possible application to local goals and conditions: • Conversion of existing high-occupancy vehicle (HOV) or other lanes to high-occupancy toll (HOT) lanes • Variable pricing on new or rehabilitated facilities and regionwide networks • Variable pricing on existing toll facilities • Pricing of an area of existing roads and streets (“areawide” or “cordon” pricing) • Distance-based pricing or mileage fees • Variable pricing applied to parking Each road pricing concept is briefly described in Section 1 and then arrayed in tabular form showing its applicability and considerations for project development. The overview and tables are 4 Road Pricing: Public Perceptions and Program Development

not only useful for planners interested in understanding the pricing options and possible applica- tion to congestion-related problems in their area, but also provide valuable information for deci- sion makers on success considerations, policy and institutional requirements, and factors affecting acceptability. After reviewing Section 1, planners and decision makers can then decide which, if any, concepts are of interest for further and more in-depth consideration. Part 1, Section 2, begins with more detail on engagement, communication, and achieving accept- ability critical to the success of any of the six road pricing concepts. Next are pointers on planning road pricing at the project level and integrating pricing into formal regional and state planning processes. These processes include goal setting, evaluation of alternatives, conformity and environ- mental reviews, fiscal constraint planning, public and stakeholder engagement, and other key ele- ments of the planning process as set out in federal law and guidance. The section ends with detailed descriptions and examples of the six pricing concepts and information on their impacts, costs and revenues, equity, and other particulars related to implementation. Section 2 also is use- ful for planners and analysts already familiar with road pricing who wish to review lessons and recommendations specific to one or more road pricing concepts. Part 2 is a resource document for two audiences. It provides planning, engagement, and com- munication resource material along with findings supportive of the lessons and directions in the guide points. It aids all readers to understand the basis for the conclusions underlying the pointers and guidance provided in Part 1. It also provides detailed literature review and interview findings for readers already familiar with road pricing who want to review the latest pertinent information from research studies and local pricing programs. It includes references and links to many U.S. project websites, documents, and outreach materials. Introduction 5

6This section provides background on six road pricing concepts and provides diagnostic infor- mation to help planners and decision makers assess which specific road pricing concepts might be most applicable in their areas. It begins by briefly describing six road pricing concepts, followed by showing the applicability of the concepts through a series of three tables that (1) addresses how the pricing concepts match with many of today’s important local and state transportation goals; (2) shows how the concepts best apply to roadway operating conditions, type and severity of con- gestion, availability of transportation alternatives, and the policy and institutional setting in a region; and (3) provides the main considerations related to acceptability, engagement, and com- munication that are important for the successful adoption and implementation of all the pricing concepts. 1.1 Road Pricing Concepts The discussion in this section and the rest of the report focuses on the following six categories of road pricing: • Conversion of existing HOV or other lanes to HOT lanes • Variable pricing on new or rehabilitated facilities and regionwide networks • Variable pricing on existing toll facilities • Pricing of an area of existing roads and streets (“areawide” or “cordon” pricing) • Distance-based pricing or mileage fees • Variable pricing applied to parking These six categories cover a full array of pricing strategies applied both within the United States and around the world. Descriptions of these concepts are provided in the following paragraphs. 1.1.1 Conversion of Existing HOV or Other Lanes to HOT Lanes Conversions of existing HOV lanes to HOT lanes allow vehicles not meeting normal occupancy requirements to “buy-in” to the lane by paying a toll varying by time of day or level of congestion. In some cases, it is not HOV lanes but shoulder lanes that are converted to dynamically priced HOT lanes. Conversion of general purpose lanes to HOT lanes has also been studied, but is yet to be implemented. Of course, HOT lanes on new or rehabilitated facilities without conversion are another possibility, as addressed in the next category. HOT lanes allow drivers to use high-speed, uncongested HOV lanes either by meeting minimum occupancy requirements or by paying a toll. Where HOV lanes face peak-hour congestion, conversion to HOT lanes allows the use of variable pricing to control traffic demand, reduce peak-period congestion, and ensure that the lanes pro- vide premium travel conditions to all users, both existing HOV users and new paying customers. S E C T I O N 1 Decision-Making Guide: Evaluating Road Pricing Potential for Local Areas and Conditions

HOT lane projects are thus intended to make better use of existing capacity on HOV lanes, while creating a new travel option in the corridor being served. A side benefit may be that a shift of traf- fic to the HOT lane may reduce congestion on the general purpose lanes. Some implemented projects include the I-15 FasTrak express lanes in San Diego, the QuickRide HOT lane projects on I-10 and US-290 in Houston, HOT lanes on I-25/US-36 in Denver, MnPASS lanes on I-394 in Minneapolis–St. Paul, and the SR-167 HOT lanes in the Puget Sound region. 1.1.2 Variable Pricing on New or Rehabilitated Facilities and Regionwide Networks Like the conversions to HOT lanes discussed previously and variable pricing on existing toll facil- ities, pricing on new or rehabilitated facilities (termed “networks” in case of multiple facilities) uses variable pricing to control traffic, reduce peak-period congestion, and generate revenues support- ing facility development or redevelopment and operations. However, instead of applying pricing to existing facilities, variable pricing is introduced with new or improved road capacity. The key goals are to increase capacity and throughput in one or more corridors while managing traffic demand and supporting improvements in part with funding generated on the facility, an approach users likely will perceive as equitable. Newly constructed expressways or lanes with variable tolls have been implemented on State Route 91 in Orange County, California, and on the Katy Freeway in Houston, Texas. Similar facilities are under development in several states where tolls are planned to vary by time-of-day and congestion levels using electronic toll collection technology. State and local budget cuts and unsuccessful attempts to fund transportation improvements through taxation have increased the interest of states in financing capacity additions using toll revenues. For example, the planned SR-520 project in the Puget Sound region involves widen- ing and rehabilitating a bridge, while supporting improvements with new variable tolls on the bridge. Planners in the region hope to extend the concept to other new facilities and existing facilities combined with improvements. Also included in this category are regionwide networks of new express lanes or facilities at sev- eral potential locations within a region, including, in some cases, regionwide initiatives to promote carpooling or improve transit services. The overall purpose is to add highway capacity while man- aging new traffic levels and generating revenues through pricing. The lane management is aimed at creating new high-quality travel options for the users where the toll revenues can cover all or a significant proportion of the associated costs. Feasibility studies or long-range plans for region- wide networks of express lanes with inclusion of demand management and transit components have been completed in Maryland, Virginia, Minnesota, Texas, and the Washington, D.C., area. New express lanes that are expected to eventually become part of such a network are currently under construction in Virginia and Maryland. 1.1.3 Variable Pricing on Existing Toll Facilities This category of pricing introduces variable tolls on highway facilities with existing fixed tolls to encourage some travelers to use the facility during less congested periods, to shift to another mode of transportation, or to change their travel route. Strategies include raising tolls during peak periods and/or discounting tolls off-peak, or introducing tolls that vary with the level of congestion on the facility. Implemented projects include variable pricing on two toll bridges in Lee County, Florida—the Cape Coral Bridge and Midpoint Memorial Bridge, variable pricing on the New Jersey Turnpike and on interstate bridges and tunnels of the Port Authority of New York and New Jersey between New York City and New Jersey, and variable truck tolls on the Illinois Tollway. Decision-Making Guide: Evaluating Road Pricing Potential for Local Areas and Conditions 7

1.1.4 Areawide Pricing While the U.S. pricing programs to date have focused largely on the introduction of variable pricing on single facilities, more of the urban road pricing efforts abroad have involved areawide or cordon-based congestion pricing. 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. Generating revenues to fund transit improvements has also been an objective in many cases. Some overseas pricing proj- ects have focused on pricing traffic entering entire urban regions. Others have introduced conges- tion pricing on expressway networks. The charge may vary by time of day or vehicle characteristics, may be in effect all day or during peak hours only, or may vary dynamically with the level of con- gestion. 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, where fees are charged for entering and driving within a designated zone, is similar in concept to “cordon pricing,” where drivers are charged when they cross the cordon surrounding a congested zone. Outside 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 (cordon pricing) in 2006. Within the United States, areawide pricing was proposed in New York City in 2007 and in San Francisco in 2008. Neither plan has been implemented. 1.1.5 Distance-Based Pricing or Mileage Fees The projects in this category convert some of the fixed costs of owning and operating a vehicle to variable costs. One example is more variability in insurance and/or leasing costs based on mileage. Another approach is a form of road pricing with travel prices based on vehicle miles trav- eled (VMT), a user-pay principle encouraging consumers to make cost-efficient travel decisions and to reduce driving at congested times and places. An added objective of VMT or mileage fees is to preserve or increase transportation revenues. Some states and research organizations are looking toward revenues from VMT fees to fully or partially replace existing gas taxes in the future. However, in line with the goal of targeting congestion, all the cases discussed here either vary charges based on congestion levels and traffic management objectives or are evaluating charges for this purpose. Experience in the United States with distance-based pricing has been in two forms. One form is pay-as-you-drive (PAYD) insurance implemented by the private sector where the insurance pre- miums or the costs to the driver of insuring or leasing a vehicle vary by the distance driven. The other form is mileage fees implemented by the public sector for purposes of travel management and transportation finance. PAYD insurance is distinct from public sector mileage fees. PAYD involves voluntary participation by drivers and has so far been implemented only by private sector insurance companies with the goals of promoting safety and increasing cost-effectiveness for drivers. Reducing overall fuel consumption and VMT typically are not primary goals. Never- theless, PAYD insurance rates can be designed to vary by time of day and location. For example, PAYD insurance tests in Atlanta and Houston varied per-mile insurance rates by a variety of risk factors including time of day, location of travel, and accident probability based on driver charac- teristics such as age, sex, and safety record. Public sector mileage-fee programs can be found in the United States and overseas. Internation- ally, mileage fees have been implemented by governments on light-duty vehicles and/or trucks. The goal of the approach is a combination of traffic management and transportation finance. Germany, Switzerland, Austria, the Czech Republic, Hungary, and Slovakia are successfully operating such systems. In the United States, Portland, Seattle, the Twin Cities region, and Atlanta have conducted 8 Road Pricing: Public Perceptions and Program Development

tests of mileage fee systems with both traffic management and transportation finance purposes. The University of Iowa is in the process of conducting several more trials in urban areas around the country. A mileage fee also can be varied by vehicle emission class and/or weight, serving the objectives of reducing emissions and accounting for added road wear from heavier vehicles. It also can be designed to vary by time of day with a higher rate during peak hours, as in a pilot program conducted in Portland, Oregon, thus helping to reduce peak-period congestion when some drivers choose to alter their time of travel to avoid a higher charge. Unlike some other pricing con- cepts, the concept of mileage fees is applicable not only locally or regionally; rather implementa- tion has been discussed at the state and national levels too. There is debate in the literature about whether PAYD insurance falls within the category of distance-based pricing. Although the insurance charges are based on the distance traveled by users, they are not intended primarily to address congestion but instead to account for accident risks. For this reason, detailed discussion under the category of distance-based pricing in the following sections of the report will focus primarily on public sector initiated or studied VMT/mileage fees. 1.1.6 Parking Pricing Parking pricing strategies are applicable on and off street at spaces controlled by municipalities and can be of the following types: • Revising or instituting rates to vary by times and/or locations of peak use, for example higher in congested zones and/or peak times of day • Rates progressing by length of time parked, for example more costly rates for second or sub- sequent hours parked • Charges applied by actual time parked versus by time blocks; examples include daily versus monthly parking charges and rates by minutes instead of by hours or all day rates In San Francisco, the SFpark program seeks to encourage drivers to park in garages and lots through new on- and off-street parking pricing that is more in line with demand. The on-street goal is to ensure that one parking space is available on every metered block to reduce cruising and associated congestion. An important anticipated benefit is improved transit speeds and reli- ability on the MUNI light rail system and reduced greenhouse gases. In New York, through the Park Smart program, the City aims to increase parking space availability and public safety and to reduce double parking, pollution, and congestion through new peak and off-peak meter rates. The City is holding a trial of this program in Greenwich Village, Park Slope, and Upper East Side neighborhoods. The next section describes how these six road pricing concepts apply to a variety of planning goals, to local conditions, and to the local policy context. The section also provides planning and communication lessons geared towards achieving maximum acceptability and successful implementation. 1.2 Local Community Goals Road pricing is effective in meeting many current community and state transportation planning goals. These include congestion management, reduction of VMT and emissions, more efficient uti- lization of highway capacity and parking spaces, generation of revenues supporting transportation, and encouragement of sustainability and livability. These goals can be met by one or more of the six road pricing concepts discussed in the previous section. Exhibit 1 shows common planning goals and how the six pricing concepts compare in meet- ing them. The table is meant to guide readers to the most appropriate strategy or strategies to Decision-Making Guide: Evaluating Road Pricing Potential for Local Areas and Conditions 9

examine further in the following sections of this document, given the most important trans- portation problems and goals in their particular region and state. The table shows some variation in the degree to which each of the pricing concepts support a particular goal by a + for supportive and ++ for especially supportive. For example, depending on the geographic extent of a new parking pricing program in a congested area and the volume of traf- fic bound for the priced parking, parking pricing can reduce searching for parking, a common source of congestion in some downtowns. However, areawide pricing can be expected to be more potent in a similar area and situation as it can apply to all traffic entering, exiting or circulating within a zone, if so structured, presuming a sufficient price and with no excessive exemptions. Like- wise, variable pricing on existing toll facilities can be very effective in reducing congestion, again presuming sufficient pricing, as it can apply to all vehicles or those with significant traffic volumes on the subject facility. The reader should note that the goals achievable by different pricing con- 10 Road Pricing: Public Perceptions and Program Development Exhibit 1. Community and regional goals achievable by road pricing concepts. Road Pricing Concepts COMMUNITY AND REGIONAL GOALS Conversion of Existing HOV or Other Lanes to HOT Lanes Variable Pricing on New or Revamped Facilities Variable Pricing on Existing Toll Facilities Areawide Pricing Mileage or VMT Fees Parking Pricing Reduce or prevent congestion at peak hours or congested locations + + ++ ++ + + Reduce auto use and encourage alternatives to reduce VMT to support sustainability goals + + ++ ++ ++ + Encourage shift to other modes, time periods, or routes for efficient utilization of capacity + ++ ++ ++ + + Delay or forgo capacity enhancements + ++ + + Raise revenues for transportation investment, provided surplus revenues are available + + ++ ++ ++ + Ensure better utilization of HOV lanes ++ Reduce emissions and improve safety + + + + + + Improve transit speed and reliability + + ++ Improve experience of using public spaces, shopping and doing business for visitors and residents ++ + ++ Reduce searching for parking and increase parking turnover to ensure better use of existing capacity ++ Note – +: supportive; ++: very supportive

cepts outlined in Exhibit 1 offer broad guidance. Much depends on the specific features of projects considered and the particulars of the intended setting. 1.3 Existing Conditions and Policy Requirements The applicability of specific road pricing concepts depends upon several transportation and pol- icy conditions. Exhibit 2 lays out the conditions necessary for the maximum applicability and effec- tiveness of each road pricing concept. It outlines situations where pricing is applicable relative to Decision-Making Guide: Evaluating Road Pricing Potential for Local Areas and Conditions 11 Exhibit 2. Applicability conditions and policy requirements for road pricing concepts. Road Pricing Concepts MAXIMUM APPLICABILITY CONDITIONS Conversion of Existing HOV or Other Lanes to HOT Lanes Variable Pricing on New or Revamped Facilities Variable Pricing on Existing Toll Facilities Area- wide Pricing Mileage or VMT Fees Parking Pricing Congestion due to capacity constraints + + + + Underused or overused HOV lanes + Congestion/delays across zone of streets and highways + + + Peak-period congestion + + + + + Availability of travel options (transit, HOV services, bike, walk, park and ride, TDM) + + + + + + Off-peak travel options available (e.g., flexible work hours for commuters) + + + + Parking facilities available outside congested zone + + Routes available for through traffic to bypass priced zone + Enforcement and transponder/on-board unit verification technology + + + + Tolling authority and legislation allowing toll variation + + + + Interoperability policy across other toll systems + + + + Legislation enabling private sector role if anticipated + + + + Enforcement authorization, fines, appeal procedures, and associated staffing + + + + + + Legislation and procedures in place to ensure data privacy + + + + + + Sizeable portion of parking in congested zone controlled by municipality + + Policy/Institutional Conditions Travel Options Roadway Situation

(1) roadway operating conditions, including capacity constraints and type and severity of conges- tion; (2) availability of transportation alternatives; and (3) the main policy and institutional requirements necessary for successful implementation. The first part of Exhibit 2 allows planners and decision makers to consider the most applicable road pricing strategy for highway and transportation conditions in the area of interest. For instance, for congested highways with capacity constraints, applicable road pricing concepts include con- version of existing HOV, shoulder, or other lanes to HOT lanes and variable pricing on existing facilities. Where new or rehabilitated capacity is an option, new lane pricing with or without HOT treatment is an option. However, when congestion is concentrated in an area of streets such as in downtowns or activity centers, the most applicable concepts are areawide pricing, mileage fees varying by time of travel in the congested area, and parking pricing. All of these concepts can reduce traffic congestion in a particular location, while encouraging a shift to alternative modes and travel times. It is important to note that all the road pricing concepts in the table are most effective when coupled with alternative travel options set out in the second part of the table. These options include HOV services; transit; travel demand management (TDM) programs; and bike, pedes- trian, and park-and-ride infrastructure. For HOT lanes, variable pricing based on time of travel on new or existing toll facilities, mileage fees, and flexible work hours for commuters will aid effec- tiveness and acceptability. For areawide pricing, alternative free routes for through traffic and park and ride options outside the priced zone to support a change in mode will boost effectiveness and acceptability. Finally, in the last part of Exhibit 2, certain policy and institutional conditions are required or, if not required, are supportive and important to consider for implementation of the road pricing concepts. For instance, all the concepts require policy and institutional support not only to authorize their implementation but also to ensure proper enforcement, appeal processing, and data privacy. Other policy and institutional points are outlined by road pricing concept in Exhibit 2. 1.4 Planning, Acceptability, and Engagement Bringing about successful road pricing plans and programs requires attention to many planning approaches as well as engagement and communication strategies aimed at the public, decision makers and stakeholders. Planners and decision makers should know that road pricing is not an easy concept to plan and bring to successful implementation. Road pricing has taken many years to gain its current successes and several major planned programs have failed to come about because of insufficient support from the public, stakeholders, and decision makers. Fortunately, docu- mented experience to date and a substantial literature on engagement and acceptability (detailed in Part 2) have derived useful lessons for planners and decision makers about how to maximize the prospects for success. Exhibit 3 provides brief checkpoints of the main planning, engagement, and communication practices important for acceptance and successful implementation. Exhibit 3 begins with pointers related to planning. To date, road pricing has emerged mostly from planning around single projects rather than from formal regional and state plans. As projects proved their success, they then appeared through amendments in regional and state plans required by federal law, along with other policies supporting road pricing. Regions and states having little or no experience with road pricing should anticipate that a road pricing plan may first emerge fol- lowing this same path. However, regions with more experience in road pricing are now adopting transportation plans that include road pricing projects, networks, and broad, supporting policies. Some of these projects are underway or nearing final approval. 12 Road Pricing: Public Perceptions and Program Development

Decision-Making Guide: Evaluating Road Pricing Potential for Local Areas and Conditions 13 Exhibit 3. Success considerations for planning, communication, and engagement. Planning Plans for road pricing are most likely to succeed where: Problem Focus, Project Experience, Link to Regional Planning Pricing plans address severe congestion-related problems or problems of “crisis” nature to decision makers, stakeholders, and affected parties. Individual pricing projects already have taken place or can take place before broad pricing policies, goals, and strategies are developed for adoption in regional and state plans. Pricing can help meet requirements for fiscally constrained metropolitan plans balancing revenues and costs, especially larger projects and/or networks versus small and first pricing projects. Pricing is linked with conformity, environmental justice, and environmental impact review requirements, especially in non-attainment regions. Pricing has potential to generate capacity sooner than traditional state and local funding sources, especially in light of ongoing and projected shortfalls in revenues from such sources. Modeling and Analysis Expertise Planners have experience and familiarity with one or more specialized microsimulation models; familiarity with unique revenue and financial models for private sector involvement is also an important consideration. Planning addresses investment and finance requirements with attention to debt-backed proceeds for future tolls and investment grade analysis. Policy and Institutional Situation Agencies and authorities already exist to support, advocate for and implement pricing, instead of planning for whole new organizations and policies. Task forces, commissions, or committees are created and used to support and develop pricing plans, especially to negotiate policy particulars such as price levels and the use and distribution of revenues. Plans account for current restrictions on pricing federally aided facilities. Communication and Engagement Communication and engagement encourages acceptance where: Focus and Content The focus is on the most resonant congestion-related problems and the degree to which they are characterized in terms and tones familiar to affected parties and stakeholders. In some settings, the most resonant problems may be pollution or the need for revenues in a time of shrinking traditional revenue sources. The problem to be addressed and the effect of pricing are clearly explained; pricing experienced to date is referenced to build familiarity and acceptance; content and tone are free of economic, planning, or engineering jargon; and all information is available in multiple language versions representing the demographics of the area. Program details are addressed, including enhanced publicly acceptable alternatives to driving; enforcement to ensure equitable access and avoid “free riders”; simple rather than complex toll schedules; possible traffic and parking diversion in sensitive areas; and how data privacy and security will be ensured. Fairness across income groups and communities in different locations is addressed, as well as other fairness concerns: “paying twice” by traditional taxes and road pricing; hardship on certain population segments; availability of improved transit to some but not others; evasion of charges that is unfair to honest payers. Engagement and Communication Process The most important parties are involved given congestion-related problems and the pricing options of potential interest, typically businesses, truckers, residents, and environmental organizations who have the ear of key decision makers; consensus and compromise take place toward policy clearance, authorization, and implementation. Champions are encouraged and supported with timely analysis and information, where champions are influential program advocates, potentially including public officials, stakeholders, and decision makers. The appearance of “springing” proposals on the public is avoided, questions are answered promptly, and concerns addressed with plan changes, and where revenue plans avoid the appearance of growing government and instead support preferred services and operations. (continued on next page)

14 Road Pricing: Public Perceptions and Program Development Exhibit 3. (Continued). Program managers and public relations staff continue contact with decision makers and program “customers” after implementation, and where newsletters, briefings and other communications feature continued input from stakeholders and evidence about program effectiveness regarding revenue distribution, services as promised, and positive experiences of program users. Role and Image of Government Government is not perceived as the culprit for congestion problems and instead appears as an honest partner in implementing congestion-reduction programs to date; multiple levels of government support pricing plans; and agencies responsible for implementation are considered credible and competent. Planners adapt to setbacks by developing and presenting altered or new concepts, revising failed communication messages, or halting engagement and waiting for more opportune times. Communication and Engagement Thus, Exhibit 3 provides pointers applicable to both project-level and regional planning. For instance, both project-level and formal transportation planning processes are advised to focus on the most severe congestion-related problems of “crisis” nature to decision makers, stakeholders, and affected parties. Likewise, all planning should reference U.S. and international experience to raise public and political awareness and enhance familiarity, acceptability and support. All plan- ning is advised to use task forces, commissions, or committees to support and develop pricing plans, especially to negotiate policy particulars such as price levels and revenue distribution. How- ever, where pricing is included in formal regional and state plans, unique considerations apply. Pricing should be linked with planning for air quality conformity, achieving environmental justice, and fulfilling environmental impact review requirements, especially in non-attainment regions. Planners also should consider how pricing might help meet the requirements for fiscally con- strained metropolitan plans balancing revenues and costs. Larger projects and/or networks may well help meet fiscal constraint requirements. The second part of Exhibit 3 highlights several chief considerations for successfully communi- cating road pricing and engaging stakeholders. Engagement and associated communications should be viewed as a multiway process that involves planners paying attention to the ebb and flow of influential actors, their interests, perceptions, and actions, while revising plans and working towards a sufficient consensus to bring about passage and implementation. In the process, plan- ners should be fully aware that uncontrollable changes in economic, political, and policy variables still may sink even well-conceived and responsive road pricing plans. Thus, the guidance offered here is not a course guaranteed to gain acceptance or adoption of any road pricing proposal. Instead, it is a series of steps, cautions, and checkpoints on engagement and communications for local, regional, and state planners to take advantage of lessons to date, avoid pitfalls, and create the best prospects possible for bringing forth acceptable road pricing proposals. Echoing a planning pointer, engagement and communications should identify and then empha- size the most resonant congestion-related problems. In some areas or corridors, those problems may include not only congestion but also pollution or the need for revenues in a time of shrinking traditional revenue sources. The lessons from studied projects also emphasize achieving consen- sus and compromise on revenue allocations, driving alternatives, good enforcement, toll sched- ules, privacy matters, and other program design elements. While these details may not arise in early discussions with decision makers and stakeholders while testing the waters about potential road pricing options, they are likely to arise once planning and engagement begins in earnest. Once sur- faced, these issues demand much interaction with many actors and interests and the particulars of the road pricing program will require careful, respectful, and flexible fashioning and compromise. Other pointers are offered on government image, using economic and planning jargon in commu- nications, and recovering from setbacks.

The importance of planning, engagement, and communication procedures taking account of success lessons to date cannot be overemphasized. For readers interested in further information on one or more of the six road pricing concepts, Section 2.3 offers more detailed pointers specific to each concept. In addition, Part 2 provides still more information on the road pricing accept- ability literature, details from successful projects with examples of engagement and communica- tion practices, and more detail on integrating road pricing into the formal regional and state planning process. Decision-Making Guide: Evaluating Road Pricing Potential for Local Areas and Conditions 15

16 Section 2 is for planners, analysts, communications and outreach personnel, and decision mak- ers interested in moving forward with a road pricing plan or simply interested in more depth on planning and program development considerations for further evaluation of road pricing. The sec- tion provides considerations for successful planning and program development common to all the six pricing concepts introduced in Section 1. In Section 2.1, readers will find expanded information on planning considerations from pro- gram startup to acceptance and implementation, as drawn from both an extensive literature review and case studies included as resources in Part 2. The same section provides checkpoints on the broad engagement process and communications important for successful development of any of the road pricing concepts. Section 2.2 gives lessons and guidance on how road pricing can be integrated into the transporta- tion planning process as structured under federal law and guidance. In areas where road pricing is expanding from individual projects to multiple projects with possible application across regions, it is important for planners and decision makers to dovetail project planning with required plan- ning processes at the regional level. Regional planning processes are needed for authorizing and programming projects, pricing projects and complementary transit, HOV programs, parking, and land use policy. Some of the key planning steps discussed in relation to pricing include goal setting, evaluation of alternatives, air quality conformity and environmental reviews, planning with fiscal constraint, and public and stakeholder engagement. Section 2.3 describes the six road pricing concepts in detail, including example programs fol- lowed by tables providing information on travel impacts, revenues and finance, equity, environ- ment, policy and institutional requirements, popular reasons for attention to the concept, and promising recent developments bearing on acceptability and success considerations specific to each pricing concept. These tables are useful not only for planners and analysts evaluating the concepts with their potential impacts and implementation requirements, but also for decision makers inter- ested in success considerations key to public and stakeholder acceptability, and the policy and insti- tutional requirements particular to each concept. 2.1 Checkpoints for Planning, Engagement, and Communication Section 2.1 has been developed based on a literature review and interviews at sites and agen- cies involved in developing road pricing projects and proposals. The literature reviews focused on (1) road pricing planning, including how planning has proceeded thus far in states and regions, and the nature of the formal transportation planning process as specified in federal guidance and S E C T I O N 2 Planning Guide: Developing Road Pricing Plans and Programs

Planning Guide: Developing Road Pricing Plans and Programs 17 (2) the acceptability of road pricing as related to engaging affected parties, stakeholders, and deci- sion makers, as well as outreach and communications in the development of projects. The inter- views covered a range of planning activities and communications and engagement practices. Interviews were supplemented by collecting plans, studies, communications materials, press releases, and other documents. The interview sites are listed below with pricing plans and pro- posals subject to the interviews noted in parentheses: • New York (areawide pricing, new variable parking pricing) • San Francisco metro area (areawide pricing, HOT lane networks) • Minnesota (HOT lanes) • Washington State (research on VMT fees, proposed reconstructed bridge pricing) • Oregon (VMT fees and gas tax replacement, HOT lane) • Los Angeles metro area (emerging HOT lanes and downtown parking pricing) • Virginia (HOT lanes and HOT lane network plans) • Washington, D.C., metro area (HOT lanes and HOT lane networks) • Dallas (HOT lanes and HOT lane networks) Part 2 of this report contains the literature reviews and interview findings in a series of appen- dices. The literature review of planning documents and studies is contained in Appendix A. The literature review on acceptability, communication, and engagement is contained in Appendix B. The interview findings on planning issues are contained in Appendix E. The interview findings related to communication and engagement are in Appendix F. Appendix G includes a list of per- tinent studies and links to websites showing examples of communication and engagement resources for planners and outreach personnel. 2.1.1 Overview of Planning for Road Pricing As discussed in Section 1.4 that introduced the key planning, acceptability, and engagement con- siderations, road pricing programs to date have emerged mostly from planning around single proj- ects rather than from formal regional and state plans. Regions and states having little or no experience with road pricing should anticipate that road pricing may well first emerge following this same path. However, areas with one or more successful road pricing projects now are adopt- ing the initial pricing projects into the metropolitan regional transportation plans required by fed- eral law and guidance. Some regions are also adopting plans and supportive policies and principles to lay the groundwork for multiple future projects and networks. Consequently, the pointers pro- vided here emphasize planning and development for successful projects across all six road pricing categories. However, additional pointers are offered on integrating pricing into the planning process because such considerations are important as individual projects emerge and planning pro- ceeds. Section 2.2 provides more detailed guidance for treating road pricing in formal regional and state plans. 2.1.2 Planning Phases of Project Development Successful road pricing projects typically begin with strong interest among one or more key actors willing to initiate study, evaluation, and planning of one or more pricing concepts. Actors may include agency planners, officials, and possibly one or more decision makers. A strong and influential champion of pricing may or may not be present at this stage. One or more transporta- tion agencies may take the lead in initiating discussion, whether city, county, congestion manage- ment agency, tolling authority, regional planning agency, air quality district, or state department of transportation. The initial phase can be characterized as testing the waters, both analytically and with an eye toward feasibility and acceptability.

Planners at the incubation stage should not initiate broad outreach involving significant public and traveler surveys, public meetings, media announcements, and informational or interactive websites. More appropriate is an informal working committee of the relevant agency actors and one or more decision makers key to passage of the plan (“gatekeepers”) who guide and review pre- liminary studies. Planners and analysts now should match a pricing concept to a severe and reso- nant problem or set of problems to ensure potential effectiveness and support for continued assessment. Also, planners should explore potential support for more detailed study, planning, and eventual outreach as most pricing projects require considerable time and resources to be brought to fruition. Presuming sufficient promise and interest in road pricing at this step, planners then enter a more formal and open process. At this step, planners should strongly consider setting up a broad work- ing group composed of not only multiple agency representatives, but also stakeholders and staff to decision makers important to the passage of the program. The group first should focus on a study concept or concepts selected for assessment. The study group should define details of the study products and timeline and an engagement and outreach process. Now, planners and the working group will focus on impact and operational details, equity impacts, costs and revenues, driving alternatives including free routes and other options for drivers, simple but effective pricing sched- ules, enforcement, pricing technology, privacy assurances, required policy authorization, and potential implementing and operating agencies. The engagement and communication process aims at a broad group of stakeholders with clear and interactive messaging, to gain a critical mass of consensus and compromise required for needed authorizations, whether a new toll agency pol- icy or enabling legislation and policy passed by city, county, or state decision makers. As the more formal planning and engagement process proceeds, no single process template will guarantee successful passage and implementation. As pointed out in Section 1.4, there are many unpredictable or hard to control occurrences likely in planning for road pricing. Important agency and decision-maker champions may arise but unexpectedly disengage in an election change or other turn of events. A change in the economy may focus important attention elsewhere or affect the acceptability of an option. The nature of the congestion-related problem may change with a change in gasoline prices, economic conditions, or unemployment. Thus, the job of the planners and study overseers is to ensure that all important study, planning, engagement, and communica- tion variables are tuned to the best prospects for success while remaining cognizant of the precar- ious nature of process outcomes. The following subsections offer pointers on planning, stakeholder engagement, and public communications in line with both the preliminary phase of planning, where the potential and fea- sibility of road pricing are tested, as well as the formal phase of detailed planning with in-depth evaluation and an extensive engagement process. The points explained below are not surefire steps to implementing pricing projects but include lessons to date, cautions on pitfalls, and actions with the best possible prospects for bringing forth effective and acceptable road pricing plans and projects. 2.1.2.1 Target and Frame Problems Strategically In both the preliminary and formal planning stages, it is important to focus discussion and effort on a problem or set of problems that are as pressing and compelling as possible. Road pricing often aims at the problem of congestion. As such, it is often called “congestion pricing.” However, road pricing can address multiple problems, including congestion, pollution, underutilized or over- utilized HOV facilities, and lack of revenues for roads and other desired transportation improve- ments. Planners need to choose which problem or problems to underscore in planning and communications to match with greatest public concern. Acceptability is enhanced where the prob- 18 Road Pricing: Public Perceptions and Program Development

Planning Guide: Developing Road Pricing Plans and Programs 19 lem is both clear and severe to affected parties. Planners need to show how pricing ties to those prob- lems and does so effectively compared to other less effective, ineffective, or infeasible alternatives. Again, congestion may or may not be the most resonant candidate problem in some areas. In some settings, it may be pollution or the need for revenues in a time of shrinking traditional rev- enue sources. Planners need to assess which problems are most pressing and their impact on affected parties, all of which will help fashion the kind of pricing proposed, how it is cast, and how its benefits are framed in communications and engagement. Examples from Interview Sites: In the Washington D.C. region, planners stressed widespread congestion concerns, national congestion rankings, framing of outsiders as culprits for part of the congestion problem, and funding constraints in their painting of the problem to be addressed and how pricing could address it. Plan and communication materials portrayed a “system in cri- sis,” highlighting the twin problems of “rapidly worsening congestion and funding shortfalls.” Planners also stressed independent evidence about the ranking of the region on a congestion index as “number two” in the nation with the reminder of a significant number of commuters from “out of state.” The approach has resonated with decision makers and local motorists suf- ficiently to aid the acceptability of several road pricing programs. While planners also made indi- rect reference to “sustainability” and a “green future” associated with tolling and pricing as options, such reference may not resonate as favorably as intended. Some in the environmental community view HOT lane development as a surreptitious way of adding highway capacity and therefore contrary to a green future. The North Central Texas Council of Governments likewise emphasized funding issues and part of the problem as revolving around outside influences. Planners underscored inadequate roads and finance resources for improvements and expansion, and highlighted a congress and state legisla- ture either not able to raise funds or diverting transportation funds to other uses. In this light, locally controlled toll roads and managed priced lanes become a solution to the perceived problem of lost local control. The agency also has stressed that gas taxes simply have not kept up with high- way resource needs and that tolling and pricing are “the only” way forward since doing nothing is unacceptable. Thus, the problem addressed is not only an inadequate finance source but an unfix- able one. The Metropolitan Transportation Commission (MTC) in the San Francisco Bay Area gained acceptance of its HOT lane network in the regional plan in part by framing content around a press- ing problem with strong public recognition (congestion and inadequate transportation facilities), which also was a top priority of key member agency actors and interests. MTC stressed not just managing traffic or reducing congestion and pollution via pricing, but financing planned highway improvements with HOT components faster and more credibly than under current lacking finance resources. That combination of issues resonated sufficiently with a sufficient number of key agency and stakeholder actors for passage of the plan, in spite of some opposition from an influential com- munity group—the San Francisco Planning and Urban Research Association (SPUR). Other goals around carbon dioxide and nitrogen oxide emissions were also highlighted, but were not so piv- otal and controversial with SPUR. Most pressing interactions around the plan centered on the highway development needs and finance, including revenue allocation back to where revenues originated. No doubt adoption of the plan was aided by some contextual elements of the proposal, for example, a neutral or somewhat positive MTC agency image and its referencing of experience of HOT lanes elsewhere (“tried and true” experience) showing income equity to be either not an issue or a manageable one. However, building upon a strong resonant problem for the traveling public and key stakeholders, then involving them in a special committee all the way appears to be the main combination behind successful adoption. Examples of policy and communication vehi- cles on these points are shown in Exhibits 4 and 5.

20 Road Pricing: Public Perceptions and Program Development Exhibit 4. San Francisco MTC HOT network implementation principles and objectives. Exhibit 5. Excerpt from Frequently Asked Questions MTC website on need for express lanes and use of revenues. Source: MTC Resolution 3868, Attachment B, adopted July 2008. http://www.mtc.ca.gov/planning/hov/Res3868_Att_B-HOT_Network_Principles.pdf Development and implementation of a Bay Area Express/High-Occupancy Toll (HOT) Network has five primary objectives: More effectively manage the region’s freeways in order to provide higher vehicle and passenger throughput and reduce delays for those traveling within each travel corridor; Provide an efficient, effective, consistent, and seamless system for users of the network; Provide benefits to travelers within each corridor commensurate with the revenues collected in that corridor, including expanded travel options and funding to support non-highway options that enhance effectiveness and throughput; Implement the Express/HOT Lane Network in the Bay Area … using a rapid delivery approach that takes advantage of the existing highway right of way to deliver the network in an expedited time frame; and Toll revenue collected from the HOT network will be used to operate the HOT network; to maintain HOT system equipment and software; to provide transit services and improvements in the corridors; to finance and construct the HOT network; and to provide other corridor improvements. Express (HOT) Lanes and Carpool Lanes There are several gaps in the region's current carpool lane system. Filling these gaps would create a seamless network of unobstructed lanes to provide a faster commute for travelers who use them. MTC's 25-year Regional Transportation Plan indicates that these gaps cannot be filled with traditional existing revenues. What is the express lane revenue used for? Express lane revenue can be used to help pay off bonds issued to finance construction, provide for maintenance, operations and enforcement of the lanes, and to fund new or enhanced transit service. Source: http://www.mtc.ca.gov/planning/hov/faq.htm Frequently Asked Questions Why consider express lanes? The appeal of this concept is three-fold: Why the need for an express lane network in the Bay Area? It expands mobility options in congested urban areas by providing an opportunity for reliable travel times for express lane users; It generates a new source of revenue which can be used to pay for transportation improvements, including enhanced transit service; and It improves the efficiency of carpool facilities.

Planning Guide: Developing Road Pricing Plans and Programs 21 2.1.2.2 Identify and Involve Relevant Decision Makers and Affected Parties; Understand Their Perceptions; and Fashion Program Options and Messages Accordingly The literature on acceptability of road pricing shows travelers, voters, residents, and the public at large may well perceive congestion problems and pricing options differently. Especially once planning moves from testing the waters to a formal process, it becomes vital to identify which par- ties are most important to engage, given congestion-related problems and the pricing options of potential interest. It is also important to assess the relationship and influence of the parties with respect to specific decision makers who must pass program proposals. Important actors include active and influential interest groups such as businesses, truckers, residents, and environmental organizations who have the ear of key decision makers with the power and responsibility to clear or reject proposals. If a standing group of the relevant parties already exists, planners can use it as the engagement group for the study. If such a group does not exist, a new task force, working group, or commission may be useful for engagement purposes. Depending on the depth and complexity of the anticipated analysis, the group might be best served by technical, policy, and outreach sub- committees. Cultivating champions at this stage is another way to enhance prospects for acceptable pricing proposals. Champions are influential policymakers, public officials, or stakeholders favoring a pricing concept, who are willing to take action in support of it. The literature and interview find- ings suggest that the presence or absence of champions can influence the course of road pricing proposals. The more influential a champion is in the decision-making process leading to the required policy approval, the more important their support and actions can be. Thus, the support of policymaker champions can be pivotal. While there are cases of road pricing programs arising without strong support from prominent policymakers and instead mostly from the actions of agency officials and active stakeholders, and examples of failed proposals with active decision makers and/or agency officials, the positive potential of champion support should not be ignored. In particular, planners should ensure that champions (or their close aides) are part of the plan- ning process, have an opportunity to shape proposals, and receive timely information on points of concern and interest. While assessing the perceptions of decision makers, stakeholders, and the general public about the nature and severity of congestion-related problems, planners should keep in mind that rele- vant parties may believe congestion is only one or even a lesser problem than other problems pric- ing can address. Planners should not ignore decision makers, especially their views on the best ways to allocate revenues, as their support or opposition often turns on this point. It is best to do inter- views on such issues as the formal process begins and before a specific proposal is fleshed out, and to do so before any open and publicized outreach campaign as early adverse reactions can slow or reverse progress toward acceptability. Only after planners gain a sense of perceptions about the problems to be addressed and account for stakeholder reactions should they begin fleshing out and analyzing more specific proposals. Proposals should combine pricing with other strategies including transit, traffic, and demand man- agement to create an effective package. Reactions should be assessed in an open manner, prompt- ing engagement on all likely issue areas suggested in the literature: • Perceived nature and severity of congestion • Probable effectiveness of pricing compared to non-pricing options • Equity broadly defined and ways to mitigate potential fairness issues • Revenue allocation and uses • Transportation alternatives and improvements • Broader issues such as the credibility of potential implementing agencies and the conduct of the planning and engagement process to come

Examples from Interview Sites: Development of a successful parking pricing program in New York City (NYC) demonstrates the important assessment and engagement methods, as well as sensitivity to areas of concern. New York City, as part of developing Park Smart pilot programs in specific neighborhoods, focused on areas with high demand for on-street parking and atten- dant traffic and parking violation problems. Planners held numerous meetings with commu- nity boards and business associations to take the pulse of the communities and ensure that the Park Smart goals and design fit the perceived problem. Planners used sidewalk surveys to measure the proportion of shoppers who arrived by car to reassure businesses that most of their customers would not be affected by parking pricing. The program was based on commu- nity opt-in so that neighborhoods were not forced to participate. Planners fostered trust between NYCDOT and community stakeholders by repeated meetings and collaboration on data collection and program design. Communication vehicles highlighted the accepted goals of increasing parking availability and reducing double parking, the opt-in nature of the pro- gram, merchant involvement, and DOT credibility in delivering on transportation. Exhibit 6 22 Road Pricing: Public Perceptions and Program Development Exhibit 6. Description and goals of NYC Park Smart program. Source: NYCDOT Park Smart Program website: http://www.nyc.gov/html/dot/html//motorist/parksmart.shtml

Planning Guide: Developing Road Pricing Plans and Programs 23 shows an example of NYCDOT’s communication content, highlighting the resonant goals of the Park Smart program and how the agency engages with community groups in implement- ing the pilot programs. 2.1.2.3 Develop Convincing Specific Plans, Plan in Depth, and Iterate Toward Acceptance As the formal plan process proceeds and presuming sufficient support exists for detailed analysis and planning of a road pricing concept, planners must understand and communicate the details of their work and iterate plan particulars toward acceptability. The research on public acceptability sug- gests that one obstacle to specific pricing proposals at this stage may be skepticism on the part of the public or decision makers about the effectiveness of pricing in addressing the problems of concern (e.g., reducing congestion or pollution) and the potential for generating net revenues supporting operations and/or facility improvements. This is the time for communications and presentations in which the planners clearly reference experience elsewhere and as well as their own and independent studies for the proposed pricing area in order to convincingly demonstrate effectiveness. Sometimes the root of suspicions rests in the tools of analysis. Actual experience with impacts from existing pricing projects may well be more convincing than model projections or results of cost–benefit analysis. Nevertheless, there is growing experience that simulation models are useful for projecting impacts on specific highways and street layouts in study areas, and can provide potent information about impacts to stakeholders and the public. Also, where there is interest in possible private sector participation in project development and operations, bonding agencies will require use of specialized models. Thus, modeling should not be avoided but done with full acknowledgment of potential weaknesses, and results should be given not as exact points but esti- mate ranges. Where local planners lack experience with such models, they should be guided by outside expertise and supporting resources such as those available from the federal Value Pricing Program and other U.S. DOT programs. As analysis proceeds, it must go more in depth and stay responsive to the top priority issues, concerns, and preferences of stakeholders and decision makers. An initial detailed planning step is for planners to demonstrate how pricing affects traveler groups and eases congestion. Model- ing and analysis should use a wide array of performance measures in synchronization with the problems addressed. Indicators may include changes in delay, traffic volumes, levels of service, speeds for both autos and transit, probability of accidents, and emission impacts. Planning and analysis also should focus on: • Revenue generation and revenue/cost results from existing programs • Potential role of pricing in the face of declining revenues from traditional sources • User pay equity considerations including comparison to gas and sales taxes • Enabling policy and legal requirements (e.g., pricing restrictions on federally aided facilities) • Institutional requirements For example, the literature suggests the importance of relying on existing policy authority and organizations to improve the prospects of acceptance and minimize the need to create whole new policies, authorities, and organizations. Equally important is attention to specific program design elements including those that the literature shows are key to acceptability, such as: • Gearing revenue allocations and uses in line with stakeholder preferences, usually toward improvements of interest in the priced zone, though other options also may be preferred including potential tax reductions • Providing not only enhanced alternatives to driving, but an acceptable free driving alternative • Good enforcement strategies to ensure equitable access to priced facilities and avoid “free riders” • Simple rather than complex toll schedules • Handling possible traffic and parking diversion in sensitive areas • Handling data and traveler information to maintain user privacy

Certain pricing concepts at this stage may require developing pilot programs as a first step. Areawide pricing and VMT-based fees are two concepts where U.S. experience is limited and analytical tools may be lacking in precision and credibility. An examination of international experience for these concepts is a useful step to estimating impacts and illustrating operations. Additionally, small-scale pilot programs offer opportunities to test effectiveness, operational details, and user reactions through the involvement of volunteers. Pilot programs can build the familiarity and acceptance required for later expansion of programs. Some pilot programs may be supported by the federal Value Pricing Program, which offers technical assistance and funds to support planning, operations, and evaluation. Examples from Interview Sites: Examples of accepted and adopted plans with transit and other travel options emphasized and communicated are numerous. The plan for HOT lanes in Los Angeles incorporates and underscores a strong “multimodal” approach (see Exhibit 7), in part to serve low-income groups, as do information websites for Minneapolis, the San Francisco Bay Area, and others where revenues go toward supporting project operations and transit. At the same time, numerous HOT lane projects in all these locations stress that the free driving option is always available. North Central Texas Council of Governments (NCTCOG), Metropolitan Planning Organization (MPO) for the Dallas region, goes a bit further by stating in policy that no current free lanes will ever be tolled. Again, while transit expansion is a common and much touted element of pricing plans, eas- ily communicated and generally well received, it is no guarantee of success for a pricing pro- posal. For example, both the areawide pricing plans in New York City and San Francisco stressed transit expansion and devoted some pricing revenues to transit, but neither project has come to fruition. As stated at the outset of this section, a number of variables bear on the suc- cess of pricing proposals; any one of these variables—whether equity, image of planning or implementing agencies, planned use of revenues, privacy, or other issues enumerated in the acceptability literature—can be paramount in determining the success or failure of project pro- posals. Nevertheless, most successful pricing projects have improved transit as a central element in the overall program. Explanations of the workings of road pricing aimed at portraying its effectiveness and impacts are less common. One example of apparently effective communications is found in Texas. NCTCOG frames dynamic pricing as “guaranteeing” acceptable speeds. It also stresses that the traveler’s value of time is a function of the opportunity cost of trips, as when one is hurrying to arrive at day care for a pickup where a late penalty might apply. The message attempts to counter the usual criticism that willingness to pay is a function of wage rate and that low-income people will suffer because of that. The workings and benefits of parking pricing probably are more eas- ily explained and accepted. SFpark provides an example of very straightforward and easily digested information (see Exhibit 8) on how new variable rates following the peaks and valleys of parking demand will make finding parking easier, improve movement of transit and emer- gency vehicles, and attract more shoppers. 24 Road Pricing: Public Perceptions and Program Development Exhibit 7. Multimodal approach of LA Metro ExpressLanes. Project Benefits Increased Transit Service and Expanded Vanpool Program Purchase 59 alternative fuel buses for increased feeder service and Silver Line service Provide an operating subsidy for the one-year demonstration period Promote vanpool program and create a minimum of 100 new vanpools that travel on the I-10 and I-110 Express Lanes Source: http://www.metro.net/projects_studies/expresslanes/images/10- 1683_ntc_ExpressLanes_condensed_web.pdf

Planning Guide: Developing Road Pricing Plans and Programs 25 2.1.2.4 Address Fairness and Equity Issues Broadly Equity issues are important to address both in preliminary discussions of road pricing and as planning proceeds. Equity across income groups who are subject to pricing often leads equity discussions among analysts of road pricing. However, research shows that acceptability of pric- ing programs does not vary greatly across income groups and equity defined more broadly may deserve more attention. Fairness concerns can revolve around concerns about “paying twice” necessitating clear demarcations between improvements and services supported by traditional taxes versus those supported by new pricing revenues. Other fairness concerns to address in plan- ning and communications may center on possible evasion of pricing, the ease of participation in developing pricing plans (sometimes termed “procedural” fairness), and pricing effects per- ceived as a hardship on certain population segments. Finally, use equity (benefits in proportion to facility use) and spatial equity (benefits by location) are important, calling attention to pro- gram design issues related to providing transit as an alternative in undeserved locations, and set- ting upper limits on charges and the number of crossings priced in a given time period. Examples from Interview Sites: The importance of income and other equity issues is illustrated by the interview sites. MTC addressed income equity along the way to successful adoption of its HOT lane network with not only the common approach of emphasizing transit improvements, but also the work of an independent expert suggesting no one is “forced” to pay as the free alter- native always exists. Oregon DOT suggested a voluntary switch from the gas tax to mileage fee to counter perceptions that the mileage fee is unfair to rural versus urban drivers and the contentious issue of double payment. Planners with the SR-520 project in Seattle propose expanded transit, telework programs, and active traffic management to address potential inequities based on Exhibit 8. Excerpt from website of SFpark program highlighting project effects and benefits. Source: Website of SFpark program, http://www.sfpark.org

income, work schedules, and traffic diversion into certain communities but not others. NCTCOG in Dallas carried out a special study on environmental justice showing no detriment to job access across areas affected by successfully adopted projects slated for implementation. See Exhibits 9 and 10 for how fairness concerns were targeted in communication content for express lanes in Los Angeles. 2.1.2.5 Keep Planning Open and Responsive; Make Government a Problem-Solving Partner, not Culprit As planning moves from preliminary assessment to an open formal process, the conduct of the process itself may become an important acceptance issue. Numerous literature findings suggest that how planners, their governmental units, and communications are perceived can be as impor- tant to acceptance as the nature of their pricing proposal(s). Government itself may be perceived as a culprit for congestion problems, an issue which may be addressed by actions adjunct to pric- ing such as improving transit and traffic management. Suspicion of government motives in pric- ing for revenues underscores setting and communicating a clear-cut and committed revenue plan as important to acceptance. This is especially true when the implementing agency is not perceived to be competent, transparent, and attuned to impacts and potential improvements across all travel modes. It is worth cautioning that while presenting revenue options, planners also need to be 26 Road Pricing: Public Perceptions and Program Development Exhibit 9. Excerpt from LA Metro ExpressLanes fact sheet. Exhibit 10. Excerpt from LA Metro ExpressLanes FAQ. Discounts for Low-Income Commuters (proposed) Residents of LA County with an annual income at or below $35,000 will qualify for a discount. A one-time $25 discount will be received when a new account is set up. It can then be applied towards the prepaid toll balance or transponder deposit. Monthly account non-user fee will be waived. Source: http://www.metro.net/projects_studies/expresslanes/images/10- 1683_ntc_ExpressLanes_condensed_web.pdf 12. We all paid for the HOV lanes with our gas taxes, and now you want us to pay again for the right to use them? Shouldn’t freeways remain free? These are optional tolls, and the choice is yours. While it’s true that the converted HOV lanes would become toll lanes, you only pay if you choose to use them – and in most cases, they will continue to be toll-free for many commuters. Either way, all general purpose lanes will remain free. What’s different under the ExpressLanes program is that commuters will have more options. For example, whereas HOV lanes are currently restricted to cars with two or more passengers, ExpressLanes will be open to solo drivers willing to pay a fee. And those drivers who choose to use the ExpressLanes provide a benefit to drivers who do not choose to pay a toll by creating more capacity in the other lanes. As tolling experiments in other cities have shown, this extra capacity produces speedier trips for non-toll paying drivers as well. 13. Aren’t low-income drivers being punished by being priced out of certain lanes? No. The toll policy includes toll credits for low-income commuters. Carpools, vanpools, transit and motorcycles will not be charged a toll. The ExpressLanes project provides increased transit service and net toll revenues will be reinvested in transit and HOT lane improvements. The current proposal is to credit the accounts of qualifying LA County low-income households $25 for account set-up/establishment fees that can be applied to the transponder deposit or pre-paid toll balance. Source: http://www.metro.net/projects_studies/expresslanes/images/10- 1680_ntc_ExpressLanes_FAQ_web.pdf

Planning Guide: Developing Road Pricing Plans and Programs 27 sensitive to the possibility that some decision makers, their constituents, and influential stake- holders will be suspicious of revenue plans if the motive appears to be growing government agencies. Also important may be matching funds from central governments and well-publicized agree- ments across levels of government demonstrating broad commitment. In terms of planning pro- cedures, resistance can arise where pricing proposals appear “sprung” on people, suggesting the importance of clear and continuous communication and solicitations for input. Meaningful and sincere attempts at involving affected parties and answering questions are important to accep- tance prospects, as well as clearly communicated program objectives, comparison of potential outcomes of road pricing to non-pricing options, supporting the results with credible analysis, and reference to successful projects elsewhere. Examples from Interview Sites: Evolution of pricing proposals in the interview sites shows the role of a responsive planning process and capable, trustworthy agency image. Modifications to the original congestion pricing plan for New York City helped build support for the revised plan after intensive public discussion and a series of well-attended public hearings. Even after these changes, however, much of the public was skeptical that the promised transit improvements would materi- alize. At the same time, the New York State Metropolitan Transportation Authority (MTA) rolled back some promised service enhancements shortly before the failed state assembly vote. This action probably deepened skepticism that the MTA could deliver on service improvements if congestion pricing were adopted. NCTCOG in Texas illustrates the effort necessary to build and maintain a credible planning and execution image. The agency has engaged state legislators, neighborhoods, chambers of commerce, and local officials over 15 years to build and maintain consensus and credibility around imple- mented and planned tolling projects and priced managed lanes. As a result, the 40 elected officials at NCTCOG have given unanimous support for tolling and pricing policies. Still, they are informed by monthly communications from staff on pricing rationales and program progress. The agency has adopted a policy of never ignoring opposition at community or agency meetings. All parties including opponents at relevant meetings always are invited to subsequent meetings. Minnesota DOT (MnDOT) takes a similar tack by “leaving no question unanswered” in its outreach and engagement processes. The final example of open and credible outreach, planning, and analysis is the evaluation of tolling options and public outreach around the SR-520 bridge replacement project in Seattle. A 520 Tolling Implementation Committee was established by the state legislature in 2008 compris- ing senior officials from the state department of transportation, the state transportation com- mission, and the Puget Sound Regional Council (PSRC). The committee ran a year-long process of meetings with cities, counties, interest groups (over 40 meetings in 2008 alone) and main- tained a media website and a Q&A website (input from over 2,700 people). They also engaged a panel of independent experts as a “peer review” group to give credibility to PSRC’s modeling process (see Exhibit 11). 2.1.2.6 Coordinate with State and Regional Agencies and Planning Processes As project planning proceeds, it is important to take into account the regional plan processes required by federal regulation and guidance. This is not to say successful projects have come about through the regional or state plan process. Typically, projects have begun outside such processes. However, especially for a project affecting a large area or corridor, involving regional and state planners is important for several reasons: • Clearance of the project by the responsible regional and state agencies will be needed to receive potential federal funds supporting demonstration or implementation, and/or transit services expanded with the pricing program.

• Regional and state planners and agency officials can be important and knowledgeable allies on developing new or revised regional and state policy and gaining necessary approvals. Regional planners also provide a regional perspective and regional analysis on such important matters as geographic equity, revenue distribution, and why pricing is considered for one corridor or area and not another. • Regional and state planners assess the balance of revenues and costs as part of fiscally con- strained metropolitan plans for significant projects. An important potential benefit of pricing projects for regional and state highway planners is how pricing may generate planned capacity sooner than traditional state and local funding sources allow. This effect is especially important in light of ongoing and projected shortfalls in revenues from such sources. • Finally, regional planners attend to air quality conformity and environmental justice require- ments for significant projects. Section 2.2 addresses in detail how road pricing can fit into regional and state transportation planning processes as structured under federal law and guidance. The important point for plan- ners carrying out project plans is to involve regional and state planners and be aware of how the formal federal plan process can bear on project development, especially for anticipated large projects. 2.1.2.7 Use Respectful, Clear, Non-Jargon Messages in Engagement and Communication Vehicles; Tailor Messages to Audience Segments Throughout the entire planning process, communications should: • Describe and underscore the nature of the problem(s) to be addressed • Highlight key elements of proposed or implemented programs • Be convincing about pricing effectiveness in addressing problems • Convey experience with pricing to date to build familiarity • Reiterate achievements of relevant agencies to boost credibility For effective communication, the form, content, and tone of communication vehicles around these purposes should be as respectful, pithy, clear, and free of economic, planning, or engineer- ing jargon as much as possible. Ensuring that the communication vehicles are available in mul- tiple languages represented in the region and to minority communities, English speaking and otherwise, also helps ensure that all potentially affected parties are reached and have the infor- mation they need to participate in the planning process. 28 Road Pricing: Public Perceptions and Program Development Exhibit 11. Independent peer review recommendations to the 520 Tolling Implementation Committee. Recommendations from Peer Review Conduct a more detailed review of results, including focus on target corridor Run the model under different assumptions, including: – fixed trip table – sensitivity analysis Improve model consistency, including: – values of time – operating costs in trip distribution Include strategic recommendations for future work – stated preference survey – corridor specific analysis State results in ranges to account for uncertainty Source: Washington State DOT website for the SR-520 project: http://www.wsdot.wa.gov/Partners/Build520/documents/PeerReview_NextSteps_081208.pdf

Planning Guide: Developing Road Pricing Plans and Programs 29 Examples from Interview Sites: While the areawide pricing plan in San Francisco has been put on hold, planners there have learned that jargon in road pricing discussions and communica- tions can be off putting. Planners believe terms such as “marginal cost” pricing and even “con- gestion pricing” connote an overly technical slant. In fact, “congestion pricing” seems to imply a double burden: first, congestion itself, then pricing added on top. San Francisco planners found that organizing several working groups as part of planning (technical, business, policy, citizen, and agencies) and matching language accordingly reduced the risk of offending audi- ence members. Other interview sites also have chosen not to use the term “congestion pricing.” For example, Texas uses “managed lanes” and Minnesota uses “express lanes” or simply “MnPASS lanes” after the well-received and widely recognized transponder used on the express lanes (see Exhibit 12). The term “express lanes” is intended to convey a premium service enabling customers to receive faster and more reliable service for the price they are paying. The message especially targets users versus taxpayers or citizens at large. Texas provides another illustration of pithy, easily remembered, and catchy phrasing in its com- munications about the rationales for tolling and pricing. A phrase coined by the former Chair of the Texas DOT and adopted by planners and decision maker advocates is “no roads, slow roads, or toll roads” to underscore the need for pricing in the face of growth and declining gas taxes. Such digestible messages coupled with an open, continuous communications program referenced ear- lier for legislators and communities helps maintain a supportive constituency behind the ongoing program in Texas. 2.1.2.8 Learn from Glitches and Setbacks; Move on Because road pricing has its roots in economic analysis and perceptions, it is not unusual for analysts and planners developing pricing options to focus on the most effective, efficient, or opti- mal solutions, often centered on congestion. As the above checkpoints indicate, such an avenue may be a mistake as such options may not be the most acceptable, or are entirely unacceptable. The planner’s task is to identify the most resonant problems and find the mix of pricing options that work and are acceptable. For example, to attack downtown congestion, areawide pricing may be more effective than parking pricing, but far more perilous to plan, gain acceptance around, and move toward implementation. Planners should be aware that the acceptability research shows that HOT lanes, traditional toll facilities, and express lanes generally garner the most support, and less support is likely for cordon pricing, mileage-based fees, and private sector partnerships involving rights to revenues. General or hypothetical pricing concepts are less likely to meet with support than those applying to specific facilities. However, all is not lost if a pricing plan runs into resistance, misunderstanding, or even rejec- tion. As the literature suggests, some successful plans had long gestation and hiatus periods as well as early rejections, as in the Minneapolis–St. Paul Twin Cities area and in London. The planner’s task is to learn from stumbling points and regroup, whether by altering the concept, engagement strategies, timing of plan efforts including waiting for a more auspicious time to begin again, or a combination of all of these. For example, planners with MnDOT turned to a “grasstops” approach of contacting, educating, and seeking support from elected officials and community leaders after Exhibit 12. Logo for Minnesota’s MnPASS lanes. Source: MnPASS website: http://mnpass.org/

setbacks with an earlier “grassroots” approach aimed more toward travelers and the public at large. The “grasstops” approach eventually helped in gaining acceptance around the successful I-394 HOT lane project. London too eventually implemented an areawide scheme after many years of study and rejection by decision makers, due in large measure to the rise of a high-level advocate and forceful public official to mayor of the city, supported by strong analysis, worsening conges- tion, and a transit expansion plan appealing to a large segment of residents and commuters. Examples from Interview Sites: The Oregon DOT (ODOT) mileage-fee pilot program illus- trates the importance of recovering from a problematic public and media communication process to go forward with a proposed program, address concerns, and set the stage for poten- tial further expansion of the pricing concept. To begin the mileage-fee program, planners engaged key stakeholders and decision makers in the state on the issue of replacing gas tax rev- enues to address the twin problems of insufficient revenues for current and foreseeable roadway needs and congestion varying by location. A 12-member task force of legislators, local decision makers, auto interests, and others supported a mileage-fee pilot program with price variation for congested areas and possible replacement of the state gas tax with a fee based on VMT on the state’s roads. However, the broad driving public never came “on board” with VMT fees as a possible replacement to the gas tax. While the pilot program went ahead with willing volunteers, the driv- ing (and potentially voting) public was skeptical about the VMT fees because of uncertainty about possible double paying for road use, fairness to high- versus low-mileage drivers, and potential privacy breaches. These concerns about double billing and privacy were addressed in the pilot (e.g., operations changed from central to fuel station billing and changed from storing traveler coordinates to only counting mileage in tracking devices). In hindsight, planners believe a better job could have been done in developing the specifics of the mileage fee concept early on in light of broad public concerns. Instead, ODOT program administrators were forced to react with information on program specifics after the public and media made assumptions about how a general mileage fee system might work. Good explanation as in Exhibit 13 eventually quelled adverse press reaction and calmed some public fears, and keeps alive the potential of a future VMT fee system for the state. 2.1.2.9 Stay Engaged and Responsive as Implementation Proceeds A consistent finding from the literature is that acceptance tends to grow the longer pricing programs are in existence, although the exact reasons for growing acceptance are not well explored. Some research suggests that proven effectiveness may be important and, where appli- cable, may minimize adverse reactions from influential parties such as local business. In other cases, it may be a proven link between revenues and promised transportation improvements. Whatever the case, research suggests that growing positive program experience is important for all parties including decision makers who must engage their constituents on the progress of the program. An important implication is that concerns about acceptability should not end with program adoption. For best chances at avoiding termination, gaining continued acceptance, and setting the stage for expansion of pricing in a region or state, it is important to keep promises about program design elements generally, and revenue distribution commitments in particular, as implementa- tion proceeds and operations commence. Continually highlighting successful program experience, detailing costs and revenues, and inviting stakeholder input after implementation via newsletters, briefings, and communications will enhance prospects for long-term success. Examples from Interview Sites: MnDOT well illustrates how engagement and communication do not end with adoption and startup of a pricing program. After successful implementation of its first HOT or express lane project, I-394, MnDOT has operated not only an interactive website 30 Road Pricing: Public Perceptions and Program Development

Planning Guide: Developing Road Pricing Plans and Programs 31 for users and prospective users of the facility, but also performed impact analyses and revenue/cost evaluations and publicized the results through press releases and information meetings with deci- sion makers and stakeholder groups. MnDOT believes that ongoing engagement and communi- cation are important not only to the future of I-394 but also to plans for future express lanes such as those recently implemented on I-35W. In the same vein as outreach for I-394, a user satisfac- tion survey and its results are made available to I-394 users through the MnDOT website (see Exhibit 14). Exhibit 13. ODOT’s correction of inaccuracies in media reports about the road user fee pilot program. Road User Fee Pilot Program Corrections to news reports The Wall Street Journal, Editorial Page by Brendan Miniter May 10, 2005 Inaccuracy: “…it’s clear the state is looking to influence behavior in addition to raising revenue by implementing a “vehicle mileage tax.” Fact: The Road User Fee Pilot Program is designed to measure behavior among motorists not influence driver behavior. With this pilot program, Oregon is not looking to raise revenue but looking at options for the inevitable future road revenue decline. While it is true that ODOT is obliged to test congestion pricing in the pilot program, this is a requirement of ODOT’s FHWA Value Pricing Pilot Program grant and not an indication of a specific policy directive adopted by the Oregon DOT or the state legislature. Any future policy decision Oregon may make on the mileage fee does not necessarily translate into application of congestion pricing, as these two policy decisions are separate. The pilot program will simply test whether or not an electronically collected mileage fee could technologically include congestion pricing should policymakers ever decide to go in that direction. Inaccuracy: “To administer this tax, a global positioning system would be mounted in each car.” Fact: The Oregon Road User Fee concept recommends that only new vehicles be equipped with the on- board technology. All of the technologies being used in the pilot program are already being manufactured in cars today. Some automobile manufacturers have already announced that key components will be standard equipment on all models within the next few years. The Federal Highway Administration and transportation standards organizations are working to adopt universal standards for the same technologies being used in the pilot. In the near future, therefore, it is very likely that a state adopting a GPS-based mileage fee would not need to require additional hardware be installed in vehicles. Some sort of software upgrade seems more likely. Clarification: “As a driver fuels up, the device would relay mileage information to the gas pump, which would calculate the VMT.” Fact: The Oregon concept is that as the driver fuels up, the VMT is calculated AND the gas tax is deducted. Inaccuracy: “What Oregon is showing us is that taxes can provide a government with the rationale to amass and act on all sorts of personal information, including when and where you’ve driven.” Fact: The GPS receiver in cars simply tells the electronic odometer whether to count the miles as “in state” or “out of state.” This is necessary to prevent Oregonians from being charged for miles driven outside the state. No location data is transmitted anywhere or stored in the device or elsewhere; since vehicle location data is not collected, it cannot be accessed. The only data collected and transmitted is the mileage, which is sent to the gas pump reader through a radio frequency that can only travel about eight to ten feet. Source: Website of Oregon DOT’s Office of Innovative Partnerships and Alternative Funding: http://www.oregon.gov/ODOT/HWY/OIPP/mileage_newsroom.shtml

2.2 Road Pricing in the Transportation Planning Process Section 2.2 addresses how road pricing can fit into the transportation planning process as struc- tured under federal law and guidance. Where road pricing is expanding from individual projects to multiple projects and possible application across regions, it should be treated in required formal planning, both for proper authorization and for programming in concert with complementary transit, HOV programs, parking, and land use policy. Also, road pricing has good potential to help meet many typical regional and state planning goals, air quality conformity, and fiscal constraint requirements. The guidance in Section 2.2 has been developed based on a literature review and interviews at sites with agencies involved in developing road pricing projects. The interviews focused on plan- ning for road pricing projects and the treatment of road pricing in regional and state plans. The 32 Road Pricing: Public Perceptions and Program Development Exhibit 14. Interactive user website for MnPASS lanes providing detailed information. Source: MnPASS website: https://support.mnpass.net/kayako/index.php?_m=knowledgebase&_a=view

Planning Guide: Developing Road Pricing Plans and Programs 33 interview sites are those specified in Section 2.1. Interviews were supplemented by collecting plans and studies important to understanding the treatment of road pricing in planning, engage- ment, and communication. The literature review focused on road pricing planning in states and regions, and federal guidance and law underlying the transportation planning process. Part 2 contains the literature review and interview findings. The literature review of planning documents and studies is contained in Appendix A and the review of literature related to accept- ability and communications is contained in Appendix B. The interview findings on planning, com- munication, and engagement issues are contained in Appendices E and F with links to supporting studies and reference materials contained in Appendix G. 2.2.1 Overview of the Transportation Planning Process As shown in Exhibit 15 from FHWA and FTA, transportation planning involves a series of steps conducted by the MPO, state DOT(s), and transit operators: • Developing a regional vision and goals for the transportation system • Identifying alternate improvement strategies—Monitoring existing conditions; forecasting future population and employment growth, including assessing projected land uses in the region Exhibit 15. Steps in the transportation planning process. Source: FHWA and FTA, The Transportation Planning Process: A Briefing Book for Transportation Decision Makers, Officials, and Staff. A Publication of the Transportation Planning Capacity Building Program. FHWA-HEP-07-039, September 2007. Available at: http://www.planning.dot.gov/documents/briefingbook/bbook_07.pdf

and identifying major growth corridors; identifying current and projected future transportation problems and needs; and identifying potential strategies • The evaluation and prioritization of strategies—Analyzing, through detailed planning studies, various transportation improvement strategies to address needs • Developing long-range plans (the long-range transportation plan, or metropolitan transporta- tion plan) of alternative capital improvement and operational strategies for moving people and goods; estimating the impact of recommended future improvements to the transportation sys- tem on environmental features, including air quality; and developing a financial plan for secur- ing sufficient revenues to cover the costs of implementing strategies • Developing short-range programs (the Transportation Improvement Program) that identify funding and a schedule for implementation of projects • Perform project development, including environmental review as part of the National Environ- mental Policy Act (NEPA) process, design, and construction • Perform system operation and monitoring of system performance and effectiveness of imple- mented strategies The metropolitan planning process also can be grouped by a set of broad important require- ments. As shown in the center of Exhibit 16, MPOs must consider eight planning criteria in developing their long-range metropolitan transportation plans (MTPs, or LRPs as in Exhibit 15), including the highlighted efficient management and operations (M&O) of the transportation 34 Road Pricing: Public Perceptions and Program Development Exhibit 16. Metropolitan transportation planning requirements, highlighting system management and operations. Source: FHWA and FTA, Advancing Planning for Operations: A Guidebook for an Objectives- Driven, Performance-Based Approach to Integrating Operations in Metropolitan Transportation Planning. February, 2010. Available at http://ops.fhwa.dot.gov/publications/fhwahop10026/fhwa_hop_10_026.pdf

Planning Guide: Developing Road Pricing Plans and Programs 35 system where road pricing has strong potential applicability. Other planning criteria where road pricing may help achieve goals include improving accessibility and mobility; improving economic vitality; and maintaining the environment, energy, and quality of life. In addition to these eight planning criteria, the MPO planning framework addresses several other planning requirements: • MPOs in transportation management areas—metropolitan areas with a population over 200,000—must develop a Congestion Management Process (CMP). • MPOs in air quality non-attainment or maintenance areas must demonstrate conformity of the plan with the State Implementation Plan (SIP) for air quality. • MPOs must develop a fiscally constrained plan—that is, the plan must be based on reasonable estimates of revenues that will be available to fund projects; the MTP is not intended to be a wish list of projects, but is implementable based on existing and projected funding sources. • MPOs must develop an effective participation plan involving affected parties and stakeholders. 2.2.2 Bringing Road Pricing into the Transportation Planning Process Plans for road pricing projects should be considered in conjunction with: • Steps 1 through 3 leading to Step 4 in Exhibit 15, when the long-range plan is finally adopted • Requirements in Exhibit 16 specifically, the CMP, air quality conformity through transporta- tion strategies, participation plan, and fiscal constraint Specifically, the following subsections indicate where in the formal planning process road pric- ing can and should fit and contain examples of how it has been done. 2.2.2.1 Regional Vision and Goals Road pricing fits with several major goals common to state and regional plans including reduc- ing single occupancy vehicle travel during peak periods (e.g., by encouraging shifts to carpools, transit, and other HOV options), providing reliable travel options (e.g., by providing a congestion- free priced option), and reducing emissions (e.g., by reducing traffic delay and sluggish traffic flows). More specifically, depending on the pricing concept selected and the program structure, road pricing can support the following typical goals in formal regional and state plans: • Timely development of improved and new transportation capacity. Compared to normal devel- opment and improvements to capacity, road pricing offers more timely development compared to reliance on traditional transportation finance methods. • Management and reduction of congestion. Especially where congestion is severe and persistent, road pricing offers prospects for effective and lasting relief and management, improving speeds and reliability for autos, transit, and goods delivery. Also, because there are several types of pric- ing strategies available (areawide, corridor, parking), the strategy can be tailored to an array of congestion problems. • Development of a sustainable and environmental friendly transportation system. Because of revenue-generating capacity, road pricing has the potential to aid in the finance of the trans- portation system, especially as expanded into sizeable regional or state projects. Also, because road pricing can support and help finance multimodal auto alternatives as it tames congestion, it can aid in meeting long-standing and newly emerging greenhouse gas emission conformity requirements. There are a host of other typical goals found in regional and state plans [and arrayed in the cen- ter of Exhibit 16 (as planning factors)] where road pricing can be supportive. Depending on the specific pricing project or projects being considered for inclusion in formal plans and the particu- lars of the supporting studies and projections, road pricing can: • Support economic vitality—improve transportation system reliability, which is valued by the freight and business communities

• Increase safety—reduce congestion and associated accidents and delays • Enhance livability and quality of life—encourage more walkable and transit-oriented centers by reducing auto use; by improving bus speeds and deliveries to businesses; and, for parking pricing, by reducing cruising for parking and the volume of parking demand • Enhance system connectivity—reduce congestion areawide or in corridors and corridor networks and support transit expansion depending on net revenue allocation plans • Emphasize preservation of the existing transportation system—optimize existing road capac- ity rather than build new capacity 2.2.2.2 Performance Measures An important part of establishing broad goals in the first step of the process provided in Exhibit 15 is developing associated specific objectives and performance measures around the goals. As parts of recent guidance documents, FHWA and FTA are promoting use of an objectives-driven, performance-based approach in the metropolitan transportation planning process. The approach defines specific, measurable, agreed-upon objectives for system performance tracked at the regional level and used to inform investment decisions. Formal regional and state plans must incorporate specific performance measures as they are developed. Planners involved in these processes should be aware of several specific performance measures appropriate to the assessment of road pricing both for the assessment of specific pro- posed project plans and for the ongoing evaluation of projects as they move toward implementa- tion and operations. Exhibit 17 provides some example measures. Other performance measures applicable to pricing relate to: • Revenue generation and net revenues • Equity, as measured by demographic categories of facility users overall and by frequency of use • Air pollutant emissions 2.2.2.3 Alternatives Analysis An important part of the transportation planning process is analyzing alternatives. Offered here are checkpoints for analysis of pricing with a focus on its benefits, thereby enhancing prospects of adopting worthwhile projects and supporting policies. The points are in line with both interview findings and literature on developing acceptable and successful plans and projects. Road pricing proposals should include options for the use of revenues and potential for speed- ing transportation capacity enhancements and supporting transit services. The analysis of road pricing as a solution should involve a package of investments and specific policies for planned rev- 36 Road Pricing: Public Perceptions and Program Development Exhibit 17. Examples of performance measures related to road pricing. Type of Measure Examples of Performance Measures Traffic Congestion Lane miles congested (defined based on volume/capacity ratio of speed during peak periods) Average hours of congestion per day Travel time index Lost time due to travel delay Wasted fuel due to travel delay Average speeds by corridor Reliability Buffer time index Planning time index Multimodal Choices Percentage of travel by transit or carpooling Availability of alternatives to congestion

Planning Guide: Developing Road Pricing Plans and Programs 37 enue allocation. An example is pending legislation in the San Francisco Bay Area specifying that network HOT lane revenues will be returned to corridor developments in proportion to the rev- enue generation from specific corridors. Specific studies of road pricing will be needed to identify the potential impacts on traffic on the priced facility and adjoining roadways, transit ridership, air quality, and revenue generation, which is especially critical to pricing projects relying on bond market finance. The credibility of model projection also may be an issue in such analysis. Ways to handle these challenges include the use of an add-on microsimulation traffic assignment tool, or the HERS economic benefit–cost analysis model, which produces a revenue estimate associated with road pricing. These and other such models are available from specialized consultants or government or university sources. Another helpful approach is the use of model peer review groups to enhance credibility during planning (e.g., as used by the PSRC). Alternatives involving road pricing should also be analyzed for legal compliance on federally aided facilities because tolling may not be permitted on such facilities, e.g., on Interstate highways. However, states approved for the Federal Value Pricing or Urban Partnership programs (a limited number) are not held to the federally aided restriction. Under these programs, federal aid may be available to support road pricing options for enhanced analysis and implementation. To date, sup- port has spanned HOT lanes, pricing on existing facilities, areawide pricing, VMT fees geared to congested locations, and parking pricing (such support may or may not continue under forth- coming reauthorization of federal transportation programs). 2.2.2.4 Fiscal Constraint The metropolitan long-range transportation plan must be fiscally constrained and include a financial plan that estimates how much funding will be needed to implement recommended improvements, as well as operate and maintain the system as a whole, over the life of the plan. This plan includes information on how the MPO reasonably expects to fund the projects included in the plan, including anticipated revenues from FHWA and FTA, state government, regional or local sources, the private sector, and user charges. Road pricing offers potential as a funding source for highway infrastructure improvements asso- ciated with the project (e.g., to help pay for additional lanes) and for ongoing highway maintenance and operations, transit services, or other related investments. Depending on the area, road pricing projects evaluated as part of formal regional and state plans may not be so extensive as to help meet fiscal constraint requirements. However, road pricing can help where multiple projects or networks of priced facilities are planned or emerging, as in the San Francisco Bay Area, Washington D.C. area, and Puget Sound, or in Texas where private investment in the Dallas managed lanes helps reduce public sector costs in the overall plan. An example for planners to consider on how road pricing can be applicable in transportation finance planning is the PSRC in the Seattle, Washington, region. PSRC has included road pricing as a key element of its Draft Transportation 2040 Plan. This financing plan suggests a long-term shift in how transportation improvements are funded, with more reliance on road pricing as a means to pay for transportation improvements, while also contributing to other goals, such as reducing contribution to climate change and air pollution. Similarly, recognizing that potential shortfalls in the gas tax will lead to limited funding in future years, planners in Dallas have been including managed lanes in its regional plans since the 1990s when the fiscal constraint require- ment was first introduced. Exhibit 18 shows how NCTCOG expects to meet the Dallas–Fort Worth region’s transportation funding needs through “innovative” finance sources, including revenues from managed lanes proposed on multiple facilities in the region. These priced facilities have been adopted in the current regional plan and are expected to fund about 30% of NCTCOG’s 2030 Metropolitan Transportation Plan costs for the roadway system.

2.2.2.5 Public and Stakeholder Participation Formal regional and state plans must be developed with public involvement. Usually, regional and state planning agencies maintain standing technical, policy, and advisory groups for develop- ing and adopting plan updates. Because road pricing is still a new and potentially controversial con- cept, planners need to augment the usual established process for public involvement in developing regional plan updates. Experience with road pricing suggests the importance of involving orga- nized affected parties, stakeholders, and decision makers specific to pricing proposals rather than relying on standing committees with more general interests and charges. A significant engagement effort will be necessary following the recommended nine pointers in Section 2.1. State DOTs are important actors in the engagement process, as the document review and inter- views suggest, because they either directly control potential priced facilities or are vital to the development of necessary enabling policies and legislation for pricing in regions. They also have strong interests in uniform, safe operations and enforcement of new priced facilities such as HOT lanes. Regional planning agencies involved in areawide or corridor pricing plans must engage state DOT planners, especially around needed state legislation, enforcement and operations on state roads, and financial issues of toll revenue allocation and use of multiple revenue sources for proj- ect development. As part of effective engagement, communications particular to pricing must be continuous, responsive, and tailored to issues of specific resonance to affected parties in a region or state. Stan- dard agency newsletters and websites devoted to general regional or state plan development may not be adequate to communicate and engage on pricing proposals. Nor will generic descriptions of pricing benefits make for effective messaging, such as general references to congestion relief, environmental benefits, and a new revenue source. Messages must be tailored to specific audi- ences depending on their perceptions of the issues road pricing can address, and communications must be structured as two-way to ensure that parties feel they can influence plan development. Model involvement and engagement processes involving specialized organized groups focusing 38 Road Pricing: Public Perceptions and Program Development Exhibit 18. Use of innovative finance sources to fund the regional transportation system in the Dallas–Fort Worth region. Source: “A Guide to Understanding Current Transportation Funding”, a funding presentation by NCTCOG at the request of Texas State Senator John Corona, August 12, 2008; available at htpp://www.nctcog.org/trans/presentations/TransportationFundingPrimerIrving8-13-08.pdf

Planning Guide: Developing Road Pricing Plans and Programs 39 on pricing are found in the PSRC region, Minnesota, and Oregon, where planners have engaged task forces and commissions and developed successful plans in the process. Beyond paying heed to the recommended planning, engagement, and communication pointers in Section 2.1, regional and state planners are encouraged to review Part 2 for sample message con- tent used for public and stakeholder outreach, which includes links to websites at the above- referenced sites. Finally, “success considerations” in the exhibits within Section 2.3 for each of the six pricing concepts give points important to acceptance and adoption once planners are ready to focus on one or more specific pricing concepts. 2.2.2.6 Congestion Management In the Congestion Management Process (CMP), a region must define what it means to have unacceptable congestion and include specific congestion management objectives and performance measures, along with methods to monitor and evaluate the performance of the multimodal trans- portation system. It also must identify strategies to manage congestion, evaluate the anticipated performance of these strategies, and assess the effectiveness of implemented strategies. An important step in the CMP is establishing congestion management objectives and principles. As noted previously in the discussion of goals, objectives, and associated performance measures, road pricing supports several congestion-related objectives and associated performance measures. Depending on varying congestion management objectives, strategies to be considered can include stand-alone road pricing projects or areawide pricing approaches or incorporate elements of pric- ing into the existing system. Some metropolitan areas have congestion management principles that prioritize demand management and operational strategies before infrastructure development. Road pricing can support these objectives and focus more attention to optimizing system per- formance and providing options to avoid congestion. In transportation management areas (TMAs) that have air quality issues, the CMP takes on a higher level of importance and should focus attention on road pricing especially for consideration of all new highway capacity projects. According to federal regulations, in a TMA designated as non- attainment for ozone or carbon monoxide (CO), federal funds may not be programmed for any project that results in a significant increase in single-occupancy vehicle (SOV) capacity unless the progress is monitored through the CMP. Road pricing offers the promise of managing SOV demand “safely and effectively” and is therefore a “reasonable travel demand reduction strategy,” in the language of federal regulations. In particular, regulation for non-attainment areas states, “the congestion management process shall provide an appropriate analysis of reasonable (including multi- modal) travel demand reduction and operational management strategies for the corridor in which a proj- ect that will result in a significant increase in capacity for SOVs . . . is proposed to be advanced with Federal funds. If the analysis demonstrates that . . . additional SOV capacity is warranted, then the congestion man- agement process shall identify all reasonable strategies to manage the SOV facility safely and effectively (or to facilitate its management in the future).” (23 USC 450.320) Consequently, in these regions, road pricing should be considered as part of any capacity expansion project included in the metropolitan transportation plan. 2.2.2.7 Air Quality Conformity In air quality non-attainment and maintenance areas, the MTP must demonstrate “conformity” with the State Implementation Plan (SIP) for air quality. That is, a regional emissions analysis must be conducted to demonstrate that the emissions associated with implementation of the MTP do not exceed the emissions budget for the region’s on-road mobile sources. (In certain circum- stances, emissions tests, such as build–no build test, are used. For a more complete discussion of conformity, see FHWA, “Transportation Conformity Reference Guide.” Available at http://www. fhwa.dot.gov/environment/conformity/con_bas.htm.)

To include road pricing projects in the MTP therefore requires that such projects be analyzed as part of the regional emissions analysis. Consequently, travel modeling and emissions analysis tools are needed to examine the impacts of road pricing projects on emissions. In many cases, as previ- ously discussed, traditional transportation models may require supplemental model analysis to assess travel and associated emission impacts for such pricing projects as conversions of HOV lanes to HOT lanes. Where planned or programmed road pricing projects are few and relatively small in a region or state, pricing impacts on emissions may not be significant in the conformity analysis. However, where several corridors or an entire network is anticipated, as with planned HOT lane networks in some regions, there will be important consequences for conformity analysis. For instance, an emissions analysis for the San Francisco Bay Area HOT lane network showed reduced emissions compared to the existing HOV network; this type of analysis was necessary for inclusion of road pricing into the transportation plan (see Exhibit 19). In some cases, road pricing may function as an emissions reduction measure. Whether the proj- ect reduces emissions will depend on many factors, including the type of pricing strategy employed (e.g., peak period pricing, round-the-clock pricing, corridor, network, areawide, or VMT-based pricing), the availability and inclusion of driving alternatives as part of the project (e.g., new or more efficient transit services), and the extent to which travelers shift to alternative modes or other routes. Certain types of road pricing—such as parking pricing—may be considered a transporta- tion control measure (TCM) and appear as such in Environmental Protection Agency (EPA) guid- ance documents. Justifying inclusion of such measures as a direct emission control strategy and analyzing their emission reduction potential will be aided by EPA guidance. Air quality analysis related to road pricing is not only a function of conformity analysis. Projects developing in regions and states, whether derived from formal planning processes or arising in a more ad hoc fashion, may require an environmental review under the NEPA. The exact extent of the review is variable depending on the nature of the pricing strategy, application to new or exist- ing facilities and the extent of the project. Large projects involving significant new capacity proba- bly will require a full Environmental Impact Statement (EIS). Small projects and those applying to existing facilities may not require the same treatment. Exemption or a less demanding environ- mental assessment without detailed analysis might be possible for pricing projects on existing facil- ities stressing vehicle trip reduction and support of transit. Parking pricing projects explicitly defined as TCMs may be exempt. Finally, major environmental analyses will involve not only air quality analysis but also analyses of indirect and cumulative impacts, economic impacts, and social 40 Road Pricing: Public Perceptions and Program Development Exhibit 19. Emissions associated with San Francisco Bay Area HOT network compared to HOV network in year 2030[1] Reactive Organic Gases (ROG) (tons) Nitrogen Oxides (NOx) (tons) Particulate Matter (PM10) (tons)[2] Carbon Dioxide (CO2) (thousands of tons) AM Peak Period Emissions—Two peak hours from 7 to 9 AM HOV network 2.10 2.18 0.20 4.65 HOT network 2.06 2.11 0.18 4.32 Percentage change –2% –3% –10% –7% [1] Figures are for emissions on freeways with HOV or HOT lanes only and reflect results of analysis assuming existing HOV occupancy requirements for HOV and HOT lanes. [2] PM10 emissions reflect exhaust only and do not include tire and brake wear emissions. Source: Bay Area High Occupancy Toll (HOT) Network Study, December 2008 Update, Metropolitan Transportation Commission, available at http://www.mtc.ca.gov/planning/hov/12-08/HOT_Network_Report_12-08.pdf

Planning Guide: Developing Road Pricing Plans and Programs 41 impacts including environmental justice issues along with a public participation process in select- ing preferred alternatives. Environmental justice sometimes is the only substantive issue evaluated in environmental documents involving pricing projects. It involves conducting thorough analysis to show that disadvantaged populations, including low-income and minority communities, will not be disproportionately burdened by a road pricing scheme and that the project is the least dis- criminatory alternative. Experience has shown that it is important for state and local actors, includ- ing state DOTs, local leaders, MPOs, and congestion management agencies (CMAs), to collaborate in moving road pricing projects forward through the complex stages of project development and environmental review. 2.3 Analytic, Policy, and Success Considerations for Each Road Pricing Concept This section presents examples for all six road pricing concepts. Each example is followed by a table with information on: • Travel impacts • Revenues and finance • Equity • Environment • Policy and institutional requirements • Popular reasons for attention to the concept • Promising recent developments bearing on acceptability and success Exhibits in the rest of this section have been developed through interviews with regional and state actors active in road pricing development, a review of plans and studies collected as part of the interviews, and a review of literature related to each of the road pricing concepts. The interview sites are listed at the beginning of Section 2.1. The exhibits incorporate not only findings from com- pleted studies but also the latest projections of travel and other impacts from ongoing studies gath- ered from respondents and agency sources. Part 2 contains the interview summaries with reference reports and website links for those interested in site sources. 2.3.1 Conversion of Existing HOV and Other Lanes to HOT Lanes This category of pricing introduces a new, more reliable travel option on congested corridors that have existing HOV lanes by converting the HOV lanes to HOT lanes. It also includes cases where shoulder lanes are converted to HOT lanes. HOV lanes are converted to HOT lanes usually to make better use of underused capacity or to alleviate HOV lane congestion. Either way, the objective is to gain more precise control over lane volumes than is possible using occupancy eligi- bility alone. In the case of congested HOV lanes, it may be necessary to reduce or eliminate free access to two-person carpools. Vehicles with single occupancy (or lower than required occupancy) can use the HOT lanes by paying a toll that varies with the level of congestion on the corridor and/or the time of day. Vehi- cles meeting the HOV occupancy requirements of the lane (typically 2+ or 3+ passenger occu- pancy) travel free of charge or at a discounted rate in most applications. The goal is to achieve optimum utilization of an existing HOV lane (whether under- or overused) or new HOT lane. HOT lanes ensure good level of service for HOV drivers, while allowing single-occupancy vehicles or vehicles with lower than required occupancy to enjoy the same level of service by paying a charge. HOT lanes can be developed with new or existing road capacity. Most early HOT lanes converted existing HOV lanes to HOT lanes and mostly on underused rather than overused HOV facilities. More recently, new HOT lanes and networks of lanes are receiving attention. Where developing

additional roadway is not desirable or feasible, especially in highly developed and congested corri- dors, planners are giving new attention to converting shoulder lanes to HOT lanes providing a more reliable travel option compared to the general purpose lanes. Planners should be sensitive to occupancy requirements in cases of converting HOV lanes to HOT lanes, as well as whether the HOT will include general purpose lanes. For instance, the fol- lowing options can be expected to have differing usage and diversion potential, as well as accept- ability implications: • Conversion of HOV2+ lanes to HOT lanes • Conversion of HOT2+ to HOT3+ lanes • Conversion of an HOV2+ lane and a general purpose lane into a combined two-lane HOT facility The following projects have been implemented under this category: • I-15 “FasTrak” project in San Diego implemented in 1991, the earliest of all projects, with goals of better utilizing the HOV lanes and raising funds for expanded transit service. Initially 8 miles of reversible lanes were priced with tolls varying dynamically with the level of congestion (as often as every 6 minutes) in order to maintain free-flow traffic conditions. The charges were managed electronically and deducted from prepaid driver accounts recognized via in-vehicle transponders. The normal toll varies between 50 cents and $4, but during very congested peri- ods it can be as high as $8. The average price paid per trip typically has been under $3 and sel- dom goes above $4. The project’s success has spurred an expansion project to add 20 additional miles in the I-15 corridor. • “QuickRide” HOT lane projects on I-10 (Katy Freeway) and US-290 (Northwest Freeway) in Houston, begun in 2000 and created to reduce heavy congestion on HOV lanes, in contrast to the San Diego project. Free access is restricted to vehicles with three or more people during peak periods. Two-person carpools can use the Katy Freeway lanes by paying a $2 per trip toll dur- ing peak hours, while single-occupant vehicles are prohibited. All transactions are completely automated. • HOT lanes on I-25 in Denver, begun in 2006 with preset pricing by time of day, with goals of increasing HOV lane utilization and generating revenues for general corridor improvements. • I-394 HOT lanes in Minneapolis (also known as MnPASS lanes), implemented in 2005 with objectives of increasing corridor capacity and throughput, improving utilization of HOV lanes, reducing congestion, creating a new travel option for solo drivers willing to pay a toll, and using excess revenues for improving highway facilities and transit service in the corridor. The project uses dynamic pricing on an 8-mile and 3-mile segment of I-394, with tolls varying as often as every 3 minutes depending on the levels of congestion. A HOT lane conversion project on I-35W is also currently under development in Minneapolis and southern suburbs, involving dynamic pricing on shoulder lanes on a 3-mile section near downtown Minneapolis. The pric- ing policy on that facility will mirror the policy on I-394 with a toll range of 25 cents per segment to a maximum of $8. • SR-167 HOT lanes in the Puget Sound region became operational in May 2008. The project includes 9 miles of non-barrier-separated express lanes in both directions. The toll varies with demand to ensure smooth traffic flow, with rates between 50 cents to $9. Carpools of two or more people, vanpools, buses, and motorcycles use the HOT lane toll free. • HOT lanes on I-95 in Miami–Dade County, also called “95 Express Lanes,” opened in 2008 in the northbound direction as part of Phase 1. Southbound lanes opened for tolling in 2010. The project involves a variable-priced toll starting from 25 cents upwards, depending on the level of congestion, to encourage travel in less heavily traveled periods. It also offers a toll-free option for registered carpools (HOV3+), vanpools, transit and emergency vehicles, and registered hybrid vehicles. 42 Road Pricing: Public Perceptions and Program Development

Planning Guide: Developing Road Pricing Plans and Programs 43 • I-15 express lanes in Utah, implemented in 2006 initially as a permit system where a limited number of solo drivers pay a monthly fee of $50 to use the lanes; however, a full electronic tolling system with charges varying by time of day based on actual traffic volumes is expected to be implemented by late 2010. Exhibit 20 provides more information on conversion of existing HOV and other lanes to HOT lanes. 2.3.2 Variable Pricing on New or Rehabilitated Facilities and Regionwide Networks The distinguishing feature of these projects is that instead of applying pricing to existing facili- ties, congestion pricing is introduced with new road capacity or along with major rehabilitation. The overall goal is to improve the facility and enhance traffic flow in the corridor while managing traffic demand through pricing, thereby creating a new high-quality travel option for the users. Like HOT lane conversions, new and revamped express lanes or other facilities use variable pricing to control traffic, reduce peak period congestion, and generate new revenues. Some projects may also give preference to HOV travelers. State and local budget cuts and unsuccessful attempts to fund transportation improvements through taxation have increased the interest of states in financing lane additions using toll revenues. For example, the planned SR-520 project in the Puget Sound region involves widening and reha- bilitating a bridge, while supporting improvements with new variable tolls on the bride. Planners in the region hope to extend the concept to other new facilities and existing facilities combined with improvements. Projects include: • Newly constructed express lanes with variable tolls on SR-91 in Orange County, California, opened in 1995 to reduce congestion on one of the most heavily congested highways in the United States. The project added two new lanes in each direction, with tolls varying by direction, day of the week, and time of the day according to a pre-set schedule. Unlike many HOT lane conversions, the toll schedule on SR-91 does not vary automatically with level of traffic (“dynamic pricing”) but is set by management and is updated periodically to reflect trends in traffic conditions and to maintain free-flowing traffic. In 2007, the peak toll in the busiest half hour was 95 cents per mile. In-vehicle transponders are used to assess and deduct tolls from a pre-paid account. • Managed lanes on the 15-mile I-30 corridor in Dallas; the first 6 miles opened in 2007 with two reversible express lanes operating during the peak periods, allowing single-occupant vehi- cles for a fee and HOVs for a fee that was up to 50% off the SOV rate at peak periods. A fixed fee was applied during the first 6 months (75 cents per mile maximum) and pricing varying by traf- fic levels (“dynamic”) thereafter. New express lane projects currently under development include the I-15 managed lanes in San Diego arising as an extension of I-15 HOT lanes, the I-10 (Katy Freeway) reconstruction in Hous- ton, and managed lanes on I-30 and I-635 and the North Tarrant Expressway in Dallas. Also included in this category are regionwide networks of new express lanes or facilities at sev- eral potential locations within a region and, in some cases, including regionwide initiatives to pro- mote carpooling or improve transit services. The overall purpose is to add highway capacity while managing new traffic levels and generating revenues through pricing. The lane management is aimed at creating new high-quality travel options for the users where the toll revenues can cover all or a significant proportion of the associated costs. Feasibility studies or long-range plans for regionwide networks of express lanes with inclusion of demand management and

44 Road Pricing: Public Perceptions and Program Development Exhibit 20. Conversion to HOT lanes. Planning Considerations Travel/Traffic Impact: Evaluations of I-15 in San Diego and US-290 and Katy Freeway in Houston show 21% to 24% increase in lane use across projects with no decrease in travel speeds and 11- to 20-minute travel time savings for HOT lane users; impacts on traffic in general purpose lanes were positive in Houston and Minneapolis (speeds were up 15% in peak period with up to 1,000 fewer vehicles), but not conclusive in San Diego. SOV violations: I-15 showed fewer SOV violators in the HOT lanes, probably due to more enforcement and some previous violators buying into the lanes. Revenue/Finance Revenues and program costs: Revenues typically used to cover operating costs of operations and enforcement in full or part; where available, additional revenues sometimes recommended for transit, transportation improvements in the corridor, and/or implementation of ridesharing and other TDM programs (e.g., San Diego, Minneapolis, Los Angeles). Revenues may cover all improvements and operating costs for projects with sufficient volumes and low capital costs, but may not for small, low-volume or highly capital-intensive projects; revenue/finance balance also influenced by competing facilities, as with I-15 upon opening of SR-56. Equity Experience shows that income equity has not been a major issue; usage surveys of I-15 lanes in San Diego and I-394 lanes in Minneapolis showed high support for HOT lanes across all income groups, with lowest and highest income groups expressing about equal support. Experience shows that HOT lanes are likely to be used by all income groups, although higher-income drivers are more likely to have transponders (I-394 Minneapolis); transit usage has improved in the case of Minneapolis I-394 HOT lanes benefiting low-income commuters; no disadvantages caused to transit and carpool users. Equity concerns may center more on those with inflexible work schedules, with peak-hour tolling in effect on HOT lanes; however, optional nature of HOT lanes reduces concerns about some travelers being worse off than before. Requirement of an electronic tolling account (e.g., need to purchase a transponder, maintain a pre-paid account balance) can be a concern for low-income or other groups without credit cards or access to checking accounts. Environment Assessments limited: Evaluations of HOT lanes focus primarily on traffic impacts and traveler reactions; limited evaluations show no increase in noise or corridor emissions (I-394). Possible reduction of congestion on general purpose lanes due to shift of traffic to HOT lanes may reduce overall emissions in corridor in the short term. Policy/Institutional Authorization: State authorization required for toll collection and for any private sector role in development and operations. Revenue allocation: How much allocated to HOT lane operations, to improvements in the corridor, to transit, or to other programs, in the same corridor or across the transportation network. Freight: Applicability to freight vehicles must be decided, i.e. whether or not they can use the lane for time-sensitive trips; in Minneapolis, free passage for freight vehicles in off-peak hours is being considered. Discounts: Discount policy for HOVs, buses, and hybrid vehicles are decision points for revenue generation and demand management. Agreements: Agreements between HOT lane operating agency, transit operators, enforcement agencies and highway department needed to specify transit, enforcement, and maintenance services. Local planning and federal programs: Congestion management process and fiscally constrained long-range plan may bear on HOT lane development and cost/revenue plans and require specification in or amendments to long-range regional transportation plan. Emerging Directions Motivators Underutilized or overutilized HOV lanes; perceptions of severe congestion in general purpose lanes; and willingness to pay for time savings, enhanced safety, and reliability. Violation rates in HOV lanes perceived as an issue with credible promise of improved enforcement via HOT conversion.

Planning Guide: Developing Road Pricing Plans and Programs 45 Exhibit 20. (Continued). Emerging Directions Revenue generation supporting HOT operations and development. Promising Developments Electronic tolling technologies make variable pricing by time of day, level of congestion, and vehicle occupancy easier to implement and customer friendly with ability to accept various payment types. Generally promising cost/revenue balance with support for new transit service and no delays to HOV users in operations to date. Technologies offer improved data collection on HOV use, toll payment, travel behavior, equity impacts, and vehicle mix for evaluation and planning. Emerging technology for vehicle occupancy detection and enforcement; new technology for license plate recognition (LPR) and optical character recognition (OCR). Plans for linking individual HOT lane projects into larger regional HOT networks likely to scale up benefits. Experience from San Diego (I-15), Denver (I-25), Minneapolis (I-394), Houston (Katy Freeway), and Puget Sound region (SR-167) provide recent, concrete impacts to reference in planning. Priced dynamic shoulder lanes are increasingly receiving more attention (e.g., I- 35W in Minneapolis–St. Paul). Success Considerations Combine HOT pricing project with complementary congestion reduction strategies like telecommuting, transit enhancements (e.g., bus rapid transit proposed on HOT corridor shoulder lanes), transit incentives, and active traffic management strategies. If HOV lane conversion to HOT is combined with change in carpool exemption/discount from 2+ to 3+, emphasize, document, and report congestion reduction benefit to lane users. Develop explicit plan for revenue allocations to support transit, telecommuting, etc., taking into account discounts/exemptions for low-income groups, to counter potential “Lexus lanes” criticisms. Consider construction of park-and-ride lots near HOT lanes to encourage ridesharing. Plan transit access and egress requirements carefully where applicable to allow for buses moving across traffic into and out of HOT lanes. Collaborate across agencies on operations, enforcement, planning, and communication (highway patrol, transit operators, local transport authority, and regional planning and congestion management agencies). Evaluate trade-offs between toll level required for good level of service, break-even revenues, and political acceptability; ensure toll flexibility in enabling policies. Enforce against non-paying solo drivers; monitor effects on transit access and speeds; plan for customer service and relations program upon implementation, including newsletter and feedback vehicles. Plan for effective marketing of transponders; readable, understandable toll, occupancy, and ingress/egress signage. Higher emissions in part related to stop-and-go congestion on general purpose lanes. transit components have been completed in Maryland, Virginia, Minnesota, Texas, and the Wash- ington, D.C. area. New express lanes that are expected to eventually become part of such a network are currently under construction in Virginia and Maryland. Exhibit 21 provides more information on variable pricing on new or rehabilitated facilities and regionwide networks. 2.3.3 Variable Pricing on Existing Toll Facilities This category of pricing introduces variable tolls on highway facilities, bridges, and tunnels hav- ing existing fixed tolls.

46 Road Pricing: Public Perceptions and Program Development Exhibit 21. Variable pricing on new or rehabilitated facilities. Planning Considerations Travel/Traffic Impact: SR-91 added two new lanes in each direction to an existing highway with variable tolls by time of day and day of week, resulting in free-flowing express lanes carrying over 40% of peak traffic versus stop and go in general purpose lanes; forecasts for new priced lanes projects in the National Capital Region estimate an increase in transit use, some decrease in HOV, slight increase in VMT, and some increase in speeds on mixed use lanes; forecasting suggests that a network of variable priced lanes can be more effective than the simple sum of individual projects. Mode effect: 40% increase in HOV3+ on SR-91 probably due to initial free-use policy, though charging HOV3+ 50% did not change overall HOV use; overall, more SR-91 commuters shifted from solo to high occupancy than vice versa; no significant effect on transit use (1%) in the corridor. Effect duration: Initially, the new SR-91 capacity dramatically reduced traffic and congestion on the general purpose lanes, but traffic has increased on these lanes with growth in travel. Revenue/Finance Construction: Four-lane, 10-mile-long SR-91 toll facility was constructed for approximately $134 million with private funds and toll revenues covered construction and operating costs; costs did not involve new right-of-way, interchange modifications, or intermediate access/egress points resulting in a cost of about $3 million per lane mile versus $10 million or more per lane mile for typical major urban freeway construction. Cost/revenues: SR-91 income (revenue less expenses) was $733,000 in 1996 rising to $13.7 million in 2001, according to private owner/operator audits; National Capital Region forecasts of revenues versus costs showed revenues may not offset capital and operating costs for major investments in segments of a new network. Economic, finance issues: State of California saved construction and operating/enforcement costs and Orange County gained property taxes from SR-91 private owner/operator of $6.8 million in first 6 years; positive benefit/cost for the expressway compared to carpool lanes as an alternative; combination of new and HOT conversions in SF Bay Area projected to generate revenues to finance capacity 30 to 40 years faster than traditional state and local tax funding; plans for SR-520 (Washington) estimates toll revenues need to be combined with traditional federal and state funds (e.g., gas tax) for financial feasibility. Equity Experience to date shows the income equity issue has not blocked programs, nor has it been critical in focus groups and surveys, e.g., for planned expansion of I-15, survey of facility users found 71% consider the extension fair with few differences based on ethnicity or income; equity assessments are limited but for SR-91, use of the express lanes increased over time for all modes across all incomes, with percentage of trips for the lowest and highest incomes (20% and 50%) stable over time. Environment Assessments limited; projections for network in SF Bay Area indicate that CO emissions reduced 10 million tons over 40 years compared to regular HOV network, in part because of better use of transit due to uncongested speeds. Policy/Institutional Authorization: Legislation required for new authority to finance, build, and operate and required for public–private venture (e.g., AB680 California), as well as carefully crafted agreement with private sector. Emerging Directions Motivators Delays, accidents, travel time unreliability. Inadequacy of traditional finance for new capacity. Possible allies in traveling public, businesses concerned with aging roads, inadequate capacity and taxpayers wanting user pay equity. Possible emission reductions compared to do nothing or regular highway expansion. Promising Developments Electronic technologies make variable pricing by location, time of day, and vehicle class easier to implement and customer friendly by accepting various payment types; new information signs add value for real-time status of traffic conditions, accidents, speeds, and travel times. New payment cards and other pay technologies enabling toll and transit fare payment via a single account may enhance toll customer relations and encourage more attention to transit options.

Planning Guide: Developing Road Pricing Plans and Programs 47 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. 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 public–private partnership is involved, heed cautions about public concerns over private build–operate monopoly position and non-compete clauses prohibiting construction of competing facilities.

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 Developments Electronic technologies make variable pricing by time of day and vehicle class 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.

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; 60,000–65,000 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)

50 Road Pricing: Public Perceptions and Program Development Exhibit 23. (Continued). Planning Considerations 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. 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 Lidingö in Stockholm are allowed free passage through the central charging zone as it is their only north–south 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.

Planning Guide: Developing Road Pricing Plans and Programs 51 Exhibit 23. (Continued). Emerging Directions low-income advocacy groups); identify influential group positions and seek acceptable compromises; identify and nurture champions; run open, credible, responsive planning and outreach processes. State–local: State clearance very likely necessary, requiring interaction, clearance, and legislation. Goals: Identify appropriate multiple goals of interest to affected parties (e.g., reduced travel time, better transit, reliable deliveries, neighborhood protections); tailor strategy for different travel markets. Revenues: Develop explicit benefit plan for increased revenues dovetailing with goals and mitigation concerns (e.g., enhanced transit, spillover protections, better enforcement). Enforcement: Mount effective enforcement upon implementation of new pricing to ensure acceptability and long-term implementation; pay heed to privacy concerns in data collection and processing. Payment: Design convenient payment channels and options, e.g., easy-to- understand price structures. Examples: Extensive public outreach and stakeholder consultations in London began 18 months prior to start of congestion pricing; London mayor’s leadership was a strong supporting factor; transit was expanded and improved in Stockholm, London, and Singapore before charging began. communications (resident associations, large and small businesses, auto drivers, transit riders, shoppers, media, environmental interest groups, and Increasing emphasis on improving air quality and reducing urban carbon emissions, particularly in large cities. Revenue constraints for transportation system investment. Promising Developments Transponder, GPS, cell phone beacon, and license plate recognition technologies applicable to areawide pricing and enforcement; also technologies offer improved traffic data collection and evaluation and possible enhanced crime security (e.g., London). Promising cost/revenue balance in experience to date, with support for new transit service, improved/higher speeds, and reduced delays to vehicle drivers; more safety and travel alternatives for non-drivers. Possible integration of pricing technology with payment for transit, parking, and existing tolls (e.g., use of EZ Pass in New York City). U.S. Examples: Proposed in the United States for the first time in New York City in 2007 and San Francisco in 2008. Success Considerations Auto options: Implement adequate transportation improvements as part of pricing program to improve transit capacity, frequency, and reliability; construct park-and-ride lots; provide express bus services in neighborhoods where majority of auto trips to charging zone originate; accommodate truck delivery considerations; improve conditions for pedestrians and cyclists; institute neighborhood preferential parking where spillover parking is a risk. Program design: Evaluate discounts and exemptions (e.g., residents, emergency vehicles, taxis, zero emission vehicles) for enhanced acceptability but balance against reduced effectiveness; tailor pricing to peaks (versus all day) with possible limits on the number of charges per zone crossing and reduced business or other taxes as offsets to pricing revenues; where air quality is a paramount objective, alternative fuel vehicles may be exempted, as in London. Politics: Identify/be cognizant of proportion of auto versus other mode users affected by pricing; accordingly, attend to key interest groups and tailor 2.3.5 Mileage Fees Road pricing where the charges paid are based on the number of vehicle-miles traveled has largely been applied to light-duty vehicles and/or trucks to date. A key goal of many VMT-based fee programs has been to preserve or increase transportation revenues, compared to declining gas tax revenues. However, traffic management also is a target of VMT fees where they vary by most congested times and places. Another potential goal is to vary the fee by vehicle emissions and/or

weight to reduce emissions and account for added road wear from heavier vehicles. Unlike some other pricing concepts, implementation of VMT-based fees has been discussed at all levels of government—national, state, and metropolitan. Regional trials for mileage or VMT fees have been conducted in Portland by ODOT, in the Seat- tle area by the PSRC, in the Twin Cities region by the MnDOT, in Atlanta by the Georgia Institute of Technology, and in multiple locations around the country by the University of Iowa. Abroad, distance-based pricing has been implemented for heavy trucks in Switzerland, Austria, Germany, and Eastern European countries including Hungary and Slovakia. Exhibit 24 focuses on VMT fees that vary based on location and time of day and thus have the same objectives as other road pricing strategies, as opposed to flat rate VMT fees as a potential replacement for the fuel tax. The matrix discusses VMT fees with variable rates to address prob- lems of peak-period congestion delays, pollutant emissions, and the need to capture costs and apportion revenues based on location, jurisdiction, or user group. The regional trials of VMT charges have evaluated driver responses in experimental groups rather than in developed, ongoing, fully operational programs. The following projects have exam- ined the effects of particular variable road use pricing strategies on travel behavior and seek insights 52 Road Pricing: Public Perceptions and Program Development Exhibit 24. Mileage fees. Planning Considerations Travel/Traffic Overall travel impact: 8% to 16% reduction in VMT has been recorded across trial programs, as a combined effect of mode shift and change in travel times or routes. Results from VMT fee trials: In Oregon, fees of 0.43 cents per mile in off-peak periods and up to 10 cents in peak periods in congested zones led to 11% to 16% reduction in VMT; in Puget Sound, peak tolls of 40 to 50 cents per mile on freeways (10 to 15 cents off-peak) and 20 to 25 cents per mile on non-freeways (5 to 7.5 cents off-peak) led to about 10% reduction in VMT during peak periods and more on specific roadways. Results from truck tolling in Europe: Differential tolls by number of axles and emission standard for heavy vehicles (> 12 tons) on all major roads in Germany was followed by increased purchase of lower emission trucks; higher load factors have been observed in Switzerland under a similar pricing scheme. Revenue/Finance Construction: Preliminary cost estimates for a distance tolling system in the Puget Sound region include initialization costs of approximately $0.75 billion to $1.5 billion and operations could equal 5% to 10% of proceeds; includes costs for in-vehicle technology, supporting infrastructure, fee collection, and enforcement. Cost/revenues: A recent AASHTO study (June 2009) shows a revenue-neutral switch to a flat VMT fee of 1.1 cents per mile applicable to all vehicles would yield $35.7 billion of revenues in 2015—the same as would result from current fuel tax rates—but switching to VMT fees would result in about $7 billion to $9 billion of additional revenue by 2030—an increase of at least 20% compared to fuel tax revenues at current rates. Economic and finance issues: If implemented at a nationwide-scale with central billing, there is a possibility to apportion revenues more in line with travel volume within boundaries of states, counties, and regions. Equity Research shows that the distribution impacts across income groups of a flat mileage fee are not significant; however, geographic equity may be an issue as some rural residents drive longer distances than urban residents, which may be moderated by lower rural road fees; equity issues for congestion pricing component same as with other road pricing concepts—see exhibits in this section. Owners of fuel-efficient vehicles would be advantaged if charges vary by emissions as opposed to those driving typically less fuel-efficient farm and business vehicles.

Exhibit 24. (Continued). from trials in Oregon, Puget Sound, Georgia Institute of Technology, and Minnesota, and nationwide trials by the University of Iowa. Increasing recognition during 2009 economic downturn that new sources of infrastructure finance must be explored. Oregon legislature expected to pass HB 2001A making the mileage-fee-based road pricing pilot program permanent, and authorizing a congestion pricing pilot in Portland. Success Considerations Communicate with public about how transportation is financed and the problem of declining gas tax revenues due to inflation; evaluate indexing of VMT fees with inflation. Gain legislative support early on; pilot project in Oregon would not have been possible without legislative support; engage all affected and influential parties including city and community representatives, auto owners associations, environmental groups and media; gain agreement on revenue allocation. For best chance at acceptance, consider starting with a voluntary approach. Use tried and tested, reliable, and familiar technology; address driver privacy concerns through technology or data storage mechanism (in Oregon, only mileage counts were transferred to billing system). Ensure that all vehicle types are accounted for in system planning, including potential future growth in electric vehicles. Design system with minimal burden on users for payment method, purchase of equipment, or regular inspections of odometers. Develop detailed program design including billing and collection technology, rate structure, enforcement, spillover guards, revenues and gas tax replacement strategy, and mitigation for perceived geographic inequity before communicating with public. Trial programs: Information on potential impacts and actual operations available Planning Considerations Environment Reduced trips and travel distance can reduce emissions following travel impacts noted above. Available results show that higher VMT fee rates for vehicles with higher emissions encourage adoption of less polluting vehicles; e.g., in Germany, a relatively high VMT fee of 12.4 Eurocent (20 US-cents) per vehicle-kilometer for trucks resulted in an increase in the number of new trucks with higher emissions standards. Policy/Institutional Authorizations: Enabling legislation, policy, and procedures needed to encourage adoption of tried and tested open, flexible and cost-effective technology interoperable across states; enabling legislation also needed to allow state/regional governments to levy congestion pricing element of distance-based pricing systems. Policy for apportioning revenues across jurisdictions and agencies established prior to implementation. Selection of technology and protocol (open versus closed) that allows interoperability across states/countries and allows states to opt in or opt out. Transition: Policies to allow motorist adoption of technology over time. Emerging Directions Motivators More stable and sustainable revenue source as compared to fuel tax supporting road development and maintenance costs. Potential to reduce congestion and emissions compared to “do nothing” scenario or regular highway expansion. Possible allies in state and regional governments struggling to meet revenue needs and traveling public, businesses concerned with aging roads and inadequate capacity, and road users who believe the strategy offers greater equity due to “user pays” principle. Promising Developments Technologies: Oregon piloted mileage fees at vehicle refuels; the Puget Sound pilot used in-vehicle meters charging by location (type of roadway) and time of travel; GPS units tested well in Oregon, although privacy concerns remain; relatively low-cost RFID technology allows equipping all vehicles with mileage- metering capabilities; use of cell phone and Bluetooth applications. Planning Guide: Developing Road Pricing Plans and Programs 53

54 Road Pricing: Public Perceptions and Program Development into some of the institutional and technological challenges facing large-scale implementation of these concepts: • Road User Fee Program is a pilot implemented in Portland, Oregon, and assesses the technical feasibility of replacing the state gas tax with mileage fees in order to fund transportation, as well as the potential of using variable fees in congested areas at peak travel times to influence traffic levels. ODOT is also conducting a demonstration of a weight–distance tax for trucks in partner- ship with a Portland-based trucking company. • Traffic Choice Study in the Puget Sound Region was implemented over 8 months to test the prac- ticality and travel behavior implications of charging tolls based on distance, time of day, and road location. • Mileage-Based User Fee (Pay-as-You-Drive) demonstration project in Minnesota evaluated the impact on travel of charging auto lease costs or insurance premiums by the mile. The project aimed at better understanding the sensitivity of drivers to alterations in vehicle ownership/ lease costs and how results varied by income, location, and annual mileage driven. Planners also wanted to gauge the potential of VMT fees to reduce travel, acceptance of VMT fees, and requisite institutional arrangements for eventual wide-scale implementation. All the above studies involved relatively small sample sizes and were conducted in metropolitan areas. Cooperating gas stations in the area and participant vehicles were equipped with hardware needed to charge fees based on mileage. All programs established mileage budgets based on base- line driving records from which mileage-based charges were debited. 2.3.6 Parking Pricing Parking pricing strategies are applicable on and off street at spaces controlled by municipalities and can be of the following types: • Revising or instituting rates to vary by times and/or locations of peak use, for example higher in congested zones and/or peak times of day • Rates progressing by length of time parked, for example more costly rates for second or subse- quent hours parked • Charges applied by actual time parked versus by time blocks; examples include daily versus monthly parking charges and rates by minutes instead of by hours or all day rates Recent examples of these parking pricing strategies include the SFpark program in San Fran- cisco, the Park Smart pilot program in New York City, and a pilot program in Austin. Exhibit 25 provides more information on parking pricing. Exhibit 25. Parking pricing. Planning Considerations Travel/Traffic Elasticity: General price-demand elasticity “rule of thumb” is –0.1 to –0.3, meaning a 10% increase in price reduces demand about 1% to 3%, including shifts to other available parking on and off street, alternative modes, or forgone trips. Through-traffic proportion: New York City finds 39% of central business district traffic is through, unaffected by parking policy. The role of subsidized parking: Subsidized parking by employers affects the price elasticity of parking demand (New York City experience). Municipal rate hike: The City of Eugene raised monthly parking rates at two municipal garages from $16 to $30 per month, and at several surface lots from $6 to $16 per month, reducing number of monthly parkers from 560 to 360 (about half changing parking locations, the rest shifting modes).

Planning Guide: Developing Road Pricing Plans and Programs 55 Exhibit 25. (Continued). Planning Considerations Revenue/Finance Generally parking demand has low elasticity, meaning an increase in price usually brings an increase in revenues to operators, though results depend on the availability and price of alternative parking supply; where such supply is very competitive, parking demand may prove to be more elastic. Revenue sharing may enhance acceptability, as with some increased revenues going to a parking district for priced zone improvements in sidewalks, lighting, landscape, and security. Equity Little empirical research on parking pricing impacts across income groups. Perceived or actual income inequity may be mitigated by some revenues devoted to increased transit, as in Boulder, Colorado. Environment Revised on-street variable pricing projected to reduce VMT 14,000/day in non-attainment areas of California (San Francisco, Los Angeles, Sacramento, San Joaquin Valley). Policy/Institutional Little or no required new policy or institutional formation if parking authority and operations already in place. New residential preferential parking programs require legislation, permit sales, and enforcement. Emerging Directions Motivators Driver familiarity and acceptance of parking pricing. Possible allies in businesses concerned with commuters “poaching” shopper parking, where there are no time limits for parking and/or low meter rates encouraging feeding. General excess parking demand relative to availability of spaces. Inconvenience to many interest groups in long search times for parking. Promising Developments New electronic technologies make variable pricing easier to implement and customer friendly by accepting various payment types. Possible integration of parking pricing technology with payment for transit and toll roads. Technologies offer improved data collection on parking use and turnover for evaluation and planning. New York City and San Francisco implementing pricing pilots on street, with comprehensive evaluations. Success Considerations Identify and engage affected parties early in planning, including residents, businesses, commuters, shoppers, and environmental interest groups (downtown and residential associations may provide starting points). Identify appropriate multiple goals of interest to affected parties (e.g., reduced cruising, more shopper parking, neighborhood protections); tailor strategy to particular commuter market (especially cash out). Develop explicit benefit plan for increased revenues dovetailing with goals and mitigation concerns (e.g., enhanced transit, spillover protections, better enforcement). Ensure that revenue increase and allocation plan is within the bounds of public and business acceptability. Examples: New York City employs neighborhood and business champions, walking surveys to evaluate and communicate impacts, regular neighborhood seminars to 59 community boards, voluntary participation in pilot; Redwood City, Pasadena, and Austin return portion of fee revenues to improvement districts for zone. Ensure effective enforcement upon implementation of new pricing. Variable on-street meter rates: Port of San Francisco adopted “progressive rates” at meters (low first 2 hours, higher third and fourth hours) with “minimal change” in parking demand or turnover due to minimal enforcement in contrast to same strategy in New York City with good enforcement bringing “significant decrease” in occupancy and duration.

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TRB’s National Cooperative Highway Research Program (NCHRP) Report 686: Road Pricing: Public Perceptions and Program Development explores road pricing concepts and their potential effectiveness and applicability. The report includes guidelines for project planning and integrating pricing into regional and state planning processes, and for communicating strategies and engaging affected parties.

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