Bacon's Rebellion

Democracy Thrives in Sunlight

The Swedish Solution

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by

James A. Bacon
in

The House of Delegates has unveiled a dramatic package of land use reforms, and I’ve been so busy publishing the Bacon’s Rebellion e-zine this morning that I haven’t had time to get to it. I will endeavor to do so this afternoon. In the meantime, I would plug a worthy legislative package submitted by Del. Chris Saxman, R-Staunton.

Saxman’s bills would encourage the U.S. Department of Transportation to establish a congestion-pricing demonstration project in Virginia. He would offset the congestion tolls by eliminating the gasoline tax in the transportation corridor covered by the tolls for the length of the project, and he would require a referendum within 12 to 18 months to allow citizens to scrap the tolls or make them permanent.

Unlike other tolls, and I cannot emphasize this enough, the primary purpose of congestion pricing is not to raise more money, although it would do that. The purpose is (a) to encourage motorists to use other transportation modes, shift their travel times or telecommute, thus reducing demand, and (b) to allow freeways to operate at optimal traffic levels thus increasing rush-hour capacity.

Embracing congestion-pricing tolls for all congested thoroughfares is the quickest, most cost-efficient thing that Virginia can do to ameliorate traffic congestion. The impact would be felt within a matter of months after implementation, as compared to the years or decades it would take for new road construction to take effect — assuming that new road construction is really the answer at all.

Indeed, I would argue that congestion tolls are the holy grail of the Axis of Taxes: a reliable and sustainable transportation funding source. The beauty of congestion pricing tolls is that they automatically adjust in response to market demand: If congestion gets worse, the tolls go up, and so do revenues for new transportation improvements. If congestion diminishes, the tolls go down. Of course, you can’t say that about new taxes passed by the General Assembly. Taxes only go up.

Finally, I would suggest that congestion pricing is an indispensable complement to land use reform. By increasing the cost of driving long distances on gridlocked arteries, congestion tolls would encourage people to move to well-integrated communities where they can live, work, shop, play and worship without hitting the highways. Shifting market demand would encourage developers to build those kind of communities, and developers would pressure local governments to approve them. Virginia doesn’t need to resort to social engineering to achieve more efficient settlement patterns.

I explore those issues in “The Swedish Solution.” For you policy wonks who want to deep-dive into the details, read “A Congestion Pricing Primer.” The Department of Transportation provides cogent answers to my questions about the economics of congestion pricing and the availability of federal funds for a demonstration project in Virginia.

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7 responses to “The Swedish Solution”

  1. C. P. Zilliacus Avatar
    C. P. Zilliacus

    Jim, your reliance on the Stockholm
    (_NOT_ Swedish) congestion taxing
    trials is misplaced – even though
    I personally feel that the
    Stockholm congestion tax scheme
    was shown to be a success, and
    was approved by voters in an
    advisory referendum in the
    municipality of Stockholm a
    week ago (popular referenda in
    Sweden have no legally-binding
    value, though the government
    will usually go along with the
    vote in setting policy).

    First, the Stockholm
    congestion tax scheme was a
    _cordon_, not a corridor
    tax – the cordon being
    around the some of the most
    densely-developed real estate
    in this otherwise sparsely-populated
    nation of Scandinavia (52 persons per square mile, compare to 179 persons per square mile in the Commonwealth of Virginia). Think of the
    congestion charging scheme in London,
    which is somewhat similar to that tested in Stockholm. Consider then
    that toll charging rings might
    be drawn around places like
    downtown Richmond or Tysons Corner.

    Second, Sweden is building _significant_ new motorway (=freeway)
    (that’s right, _freeway_) capacity
    relatively close to the area
    covered by the congestion tax.
    A Southern Link was recently
    completed, and an Eastern Link is
    under study, as is a Western Bypass
    of Stockholm. Significantly, I see
    no mention of new highway capacity
    in your article.

    Swedish Motorways on Wikipedia (English):
    http://en.wikipedia.org/wiki/Motorv%C3%A4g

    Southern Link on Wikipedia:
    http://en.wikipedia.org/wiki/S%C3%B6dra_l%C3%A4nken

    Stockholm Congestion Tax (in English):
    http://www.stockholmsforsoket.se/templates/page.aspx?id=183

  2. Jim Bacon Avatar
    Jim Bacon

    C.P., Thanks for the additional background about the Stockholm congestion-pricing experiment. I never meant, and I doubt that Chris Saxman ever meant, Stockholm as a model for Virginia. Rather, the success of the experiment was an inspiration for Virginia. Should Virginia establish a Stockholm-like “cordon” around Tysons Corner? Or should it take a “corridor” approach, establishing congestion tolls on the likes of Interstates 95, 66 and 64? Those fundamental decisions have not been made.

  3. Ray Hyde Avatar
    Ray Hyde

    “Unlike other tolls, and I cannot emphasize this enough, the primary purpose of congestion pricing is not to raise more money, although it would do that. The purpose is (a) to encourage motorists to use other transportation modes, shift their travel times or telecommute, thus reducing demand, and (b) to allow freeways to operate at optimal traffic levels thus increasing rush-hour capacity.

    Embracing congestion-pricing tolls for all congested thoroughfares is the quickest, most cost-efficient thing that Virginia can do to ameliorate traffic congestion. The impact would be felt within a matter of months after implementation, as compared to the years or decades it would take for new road construction to take effect — assuming that new road construction is really the answer at all.”

    I agree. And Larry Gross has correctly stated the difference between increased gas txes and congestion fees.

    We need both.

    However, I submit that you have not fully appreciated the unintended consequences. I suspect that these will amount to, not less traffic over all, but more traffic in other places; a relocation of traffic if you will.

    Suddenly, all those less congested roads we built in other places will start paying their own way, but only if the land use rules allow it.

  4. Ray Hyde Avatar
    Ray Hyde

    And, Stockholm previously spent a considerable amount on new transit, which went unused prior to the congestion pricing.

    Is congestion pricing just another subsidy to transit? Will congestion tolls go to suport transit, or to the roads that generate the funds?

  5. Larry Gross Avatar
    Larry Gross

    re:

    “However, I submit that you have not fully appreciated the unintended consequences. I suspect that these will amount to, not less traffic over all, but more traffic in other places; a relocation of traffic if you will.”

    I agree with Ray on these two points:

    1. – the impacts of congestion pricing on the Regional Network

    2. – a direct question as to the PURPOSE of congestion pricing and more to the point what Performance Standards are the GOALs of congestion pricing.

    Congestion Pricing need to be done as a regional network strategy NOT on a per road basis.

    And this goes to the goal.

    The goal is NOT to reduce congestion on the basis of a snapshot of a particular road in a particular timeframe.

    The goal is to have a SUSTAINABLE transportation network.

    For instance – what happens when a particular stretch of road with congestion pricing MAXES out?

    This should never happen because the performance standard that the operator of the road should meet is to MAINTAIN a specific Level of Service over the LIFE of the facility.

    What that might mean is that some point – you’ve got all you can get out of that road and without expansion – the level of service will deteriorate.

    The second point is that – it’s highly unlikely that a particlar road can and will operate independent of other roads – as Ray points out. More likely.. if level of service degrades on a congestion-priced road – it will spill over onto other roads.

    That’s why you cannot look at one particular road with regard to congestion pricing.

    It needs to be part of a network strategy and (Ray is not going to like this) – OTHER modes need to be part of the analysis because … the location of a road .. or to put it more specifically the PROSPECTIVE location of a road expansion necessary to maintain level of service may not be practical nor cost-effective.

    This is not rocket science. You don’t knock down hospitals to make room for new roads and you can’t divert a river etc.

    The Stockholm experiment IS a network approach and that is why, in my opinion, it shows promise.

    and hey folks… (in my opinion) when you do this – you need to be thinking INTERMODAL not just roads.

  6. Larry Gross Avatar
    Larry Gross

    re: US DOT interview on Congestion Pricing.

    Thank you. I encourage others to read this and to be honest… why haven’t our legislators read this and at the least commented on it – or even better have a bill in the GA asking that NoVa ask for funds for a pilot program.

    Here’s on compelling and one telling exerpt from the interview:

    compelling: (1) pricing increases the number of vehicles a facility can serve in a given time period (i.e. it dramatically increases highway capacity). This is counter-intuitive to people who believe that pricing is simply about kicking people off of highways. As traffic speeds grind to a crawl, a typically congested facility during peak periods in Northern VA is handling less than 1,000 vehicles per lane mile per hour, sometimes as low 800 vehicles. Free flow facilities can handle approximately 2,200-2,300 vehicles. Pricing can approximate free flow conditions, meaning that priced lanes can handle more traffic, not less.”

    Telling: “The main hurdle that remains is interest in conducting such a demonstration given the magnitude of the undertaking.”

  7. Ray Hyde Avatar
    Ray Hyde

    Nope, I agree that other modes should be part of the analysis. We are not looking at the system as a whole.

    I do think that if we do the analysis without having pre-sold the results to ourselves, that the other modes will have relatively minor roles, but those roles can be very important in the places that they actually work.

    I don’t think they will have much impact on the basic problem.

    Gas costs $2.36 a gallon.
    Milk costs $3.50
    Bottled Water is $7.00
    Starbucks coffe is $33.00 a gallon.

    Which do you think people will give up first?

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