High traffic, high toll

Today, Gordon and Reed discuss charging motorists tolls based on the changing volume of traffic. Previously, they debated the to convert some carpool lanes into toll lanes and the slow pace of in Los Angeles. Later in the week, they’ll discuss the impact of population growth on Los Angeles and more.

Private solutions to reducing gridlock
By Peter Gordon

Congestion pricing in Los Angeles would be nothing like the area-pricing scheme that London has. London’s works for a busy center, which Los Angeles doesn’t have. Compared with London, our jobs and our traffic are dispersed.

A pricing scheme for L.A. should be “dynamic,” meaning that it has to be sensitive to time-of-day traffic conditions. We already know about matinee prices and early-bird specials: Prices adjust to demand specific to the time of day. There are predictable cycles of daily demand for almost all freeways, so prices must adjust. (And we must stop using the term “freeways.”)

The best plan for L.A. is to create a network of HOT lanes (high-occupancy or toll access), an idea first proposed by transportation expert Gordon Fielding and further elaborated by the Reason Foundation’s Bob Poole and many others. Let’s start by converting the mostly underused carpool lanes to toll lanes. Electronic toll- collection technology is here, and the old idea that the transaction costs of toll-taking are a barrier is now moot. As traffic builds up on a given highway, convert more lanes to HOT lanes or build new ones. Likewise, time-of-day pricing would have to be the result of successive approximation, learning and feedback. That is how prices for all other goods and services are found -- they are characterized by flexibility and reflect real-life conditions.

That brings up the question of whether public agencies can act like private owners, who either price and invest correctly or become extinct. Can public agencies running the HOT lanes behave in such a way? It is a tall order. This is why discussions on pricing are often linked to the idea of road privatization. There are many examples of private road construction and management in U.S. history and in other countries. If time-of-day pricing is profitable, investors in road construction and operation will emerge and let taxpayers off the hook. Gasoline taxes have not been doing the job anyway. Furthermore, politicians will not raise taxes to pay for new roads when the price of gas keeps rising. Besides, unlike the sales tax, the gasoline tax is usually a flat amount and not a fixed percentage of the sales price. Consequently, in many places taxes have actually shrunk as a percentage of the retail price of gasoline.

Privatization can proceed via franchising and competitive bidding by various consortia. In Los Angeles and elsewhere, local or state governments could evaluate bids. Governments already do this in many other fields; why shouldn’t they do the same in building and operating roads?

Economist Fred Foldvary provides a good model for understanding road construction. He reminds us that we enter many private buildings and take the elevators for free. The developers decide that elevators make the building function (and profitable) and that bothering with fees for elevator use is simply not worth it. Similarly, the developers of private communities supply the roads. Most do not charge for the use of these roads, but that’s a business decision. The point is that mobility is not held up by politics; it is supplied because it makes the project work. All of the complaining that we hear about the awfulness of traffic in L.A. suggests that the same cannot be said about Southern California. Highway capacity is not supplied in ways that makes the place work. This may not be the case for much longer.

Peter Gordon is a professor of real estate economics and public policy at USC.

The right kind of congestion pricing
By Bart Reed

London’s pricing scheme has indeed reduced traffic there, but reports show that between 65% and 80% of the revenues collected have been paid to the operator of the pricing system and for enforcement of the most widely violated law in Britain. The system is so controversial that the British government has dropped plans for national implementation. As London’s program shows, road pricing in the U.S. carries risks that can become a political embarrassment.

There is a form of congestion pricing that could work in Los Angeles: charging tolls on all free-flow lane through several of the region’s geographic passes. For this to work, transit options would have to be significantly upgraded. If we treat all vehicles the same -- rather than let a few buy their way out of traffic -- paying a toll would allow some motorists to make the rational choice to use transit. Several bus systems travel through the Newhall Pass, and Metrolink connects the San Fernando and Santa Clarita valleys via rail. Charging all motorists a toll pegged to highway demand would result in many commuters opting for transit instead of their cars.

At the Cahuenga Pass, the Los Angeles County Metropolitan Transportation Authority could charge a toll after adding additional bus routes. Red Line subway service beneath the pass would have to be doubled or tripled. The Sepulveda Pass could get increased bus service, and the MTA could toll the 10 miles of carpool lanes now under construction on Interstate 405. Revenue from the Sepulveda Pass toll could fund a true rail alternative that would run south through the San Fernando Valley on Van Nuys Boulevard and enter a tunnel under the Santa Monica Mountains with stations at UCLA, Westwood and Los Angeles International Airport. Doubtless commuters would prefer a nine-minute train trip from the valley to Westwood over inching through the Sepulveda Pass.

Peter, the fact that our region is so decentralized doesn’t mean that we can’t have an efficient rail and bus system. Fully one-third of Metrolink Antelope Valley line riders end their journeys in Burbank or Glendale rather than traveling to the line’s terminus in downtown L.A.

Why should we reconfigure capacity on our already overburdened roads by allowing a select few to pay more and bypass congestion? It’s a good idea if you are adding new lane capacity to our existing highways, but the ill-conceived plan to convert carpool lanes on Interstate 10 and Interstate 210 to toll lanes will drastically slow down carpoolers and divert them to the already overloaded adjacent lanes, thus slowing everyone down.

Now you want private industry to build and operate high-occupancy vehicle lanes, which would increase costs for drivers by introducing a profit motive. Building 10 miles of new carpool lanes on the 405 Freeway will cost nearly $1 billion; how expensive a toll is needed to recover this investment in a reasonable time frame?

Politicians don’t want to index or increase gas taxes. So why is it that if everyone won’t pay another nickel, dime or quarter per gallon for gas, it’s OK to charge motorists to drive on carpool lanes they’ve already paid for? There are a few good transportation proposals in which demand-based tolling would work: the Interstate 710 tunnel beneath South Pasadena, the High Desert Corridor or the 91 Express Lanes extension into Riverside County. But the ill-conceived plan for the 10 and 210 Freeways to wreck to most successful carpool lanes in L.A. County could destroy the public’s confidence in transportation planning and set back more worthwhile projects.

Too many of your ideas, Peter, are based on a kind of thinking out of line with average voter behavior. The upcoming disaster on the 10 and 210 Freeways will again provide a solid lesson. Watch out!

Bart Reed is executive director of the Transit Coalition, a Sylmar-based nonprofit organization dealing with issues of transportation, mobility and land use planning.