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How Federal Subsidies Shape Local Transit Choices

Jianling Li and Martin Wachs

Suppose you're going to buy a new car that you’ll keep for ten years, and you've reduced the choices to two. The first has a price tag of $20,000 and an annual operating expense of $1,500, while the second costs $15,000 with annual operating costs of $1,800. If you were making an economically rational decision—all else being equal—the second car would be your least total-cost choice, since your total ten-year cost for the first would be $35,000 and for the second, $33,000. But if your rich uncle came along and offered to pay half of the initial purchase, your economically rational choice would change to the first one. Now your net cost for ten years would be $25,000 for the first and $25,500 for the second.

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2017-05-30T23:07:57+00:00Categories: ACCESS 18, Spring 2001|Tags: |
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The Value of Value Pricing

Kenneth A. Small

Seeking ways to ease highway financing and alleviate traffic congestion, policy makers have put toll roads on the national agenda. The public is skeptical of the idea, to say the least. So the federal government has been sponsoring demonstration projects, both to gain practical experience and to increase public familiarity with road-pricing concepts and the ways they work. Although most of the demonstrations are merely studies, two are currently operating on real roads in California. They show that the hardware and software work well, that transactions and enforcement are manageable, and that drivers easily adjust to pricing. One project, the SR91 express lanes in Orange County, is a privately financed ten-mile roadway that parallels the Riverside Freeway (SR91), a notorious bottleneck. Drivers using the new roadway pay electronically according to a fee schedule that varies by time of day and day of week. Three-person carpools use the lanes at a discount. When the new lanes opened, typical peak-hour delays on the original lanes on this ten-mile section fell from over thirty minutes to less than ten minutes.

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2017-05-31T21:25:54+00:00Categories: ACCESS 18, Spring 2001|Tags: , |
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Taking Turns: Rx for Congestion

Carlos Daganzo

Freeway congestion at bottlenecks is different from tie-ups caused by accidents and other random incidents. It’s recurrent and therefore more easily diagnosed and perhaps even more easily controlled. Thus, at least in principle, we can reduce bottleneck congestion by modifying either the freeway’s design or the management policies that affect freeway operations. Unfortunately, the most obvious modifications often redistribute benefits and burdens unevenly, so some people feel they’d be worse off of the so-called improvements. The resulting clamor often leads to inaction, leaving congestion unabated. So we need to find win-win strategies that everyone might like—lowering bottleneck congestion while garnering widespread support.

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2017-05-31T21:26:59+00:00Categories: ACCESS 17, Fall 2000|Tags: , , |
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Should We Try to Get the Prices Right?

Mark Delucchi

There is considerable interest these days in “getting the prices right” in transportation. Some environmentalists and supporters of mass transit believe the “right” prices will induce a lot of people to switch from cars to public transit. So they advocate a variety of additional charges on vehicles, fuel, road use, emissions, and so on. Some economists believe that the “right” prices will lead to an economically efficient and socially desirable use of transportation modes and fuels. In a society seeming to become ever more leery of government regulations, and concomitantly more enamored of “market” solutions to difficult social problems, there can be strong appeal to getting the prices right in transportation. Arguably, if we can estimate and implement transportation prices intelligently, without slighting efforts towards important social objectives that are not well addressed by pricing, then perhaps we ought to try to “get the prices right.” But that’s a big “if.”

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2017-05-31T21:28:04+00:00Categories: ACCESS 16, Spring 2000|Tags: , |
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THE ACCESS ALMANAC: Gas Tax Dilemma

Mary Hill, Brian D. Taylor and Martin Wachs

Prior to 1923 California, like most states, financed highway construction and maintenance by issuing general obligation bonds. By the early ’20s direct appropriations for highways and interest payments on the bonds had risen to more than 40 percent of the state’s budget. So in 1923 California adopted a new system of highway finance using earmarked user fees, in particular the per-gallon fuel tax. Before long all fifty states had similar user taxes, as did the federal government.

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2017-05-31T21:36:42+00:00Categories: ACCESS 14, Spring 1999|Tags: |
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Congress Okays Cash Out

Donald Shoup

Chances are you drive to work alone and park free when you get there. Ninety-one percent of commuters in the United States travel to work by automobile, 92 percent of commuters’ automobiles have only one occupant, and 94 percent of automobile commuters park free at work. Employers provide 85 million free parking spaces for commuters. The resulting tax-exempt parking subsidies are worth $31.5 billion a year.

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2017-05-31T21:37:17+00:00Categories: ACCESS 13, Fall 1998|Tags: , , |
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Taxing Foreigners Living Abroad

David Levinson

Will toll roads ever become the norm, leaving “free” roads a distant memory? Now that new electronic toll-collection systems can collect fees from vehicles traveling at full speed, we must ask whether they inevitably will. People who believe technological developments compel institutional changes expect tolls will replace taxes in transportation finance. Those who believe institutional arrangements are independent of technological changes are dubious.

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2017-05-31T21:37:34+00:00Categories: ACCESS 13, Fall 1998|Tags: |
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Hot Lanes: Introducing Congestion-Pricing One Lane at a Time

Gordon J. Fielding and Daniel B. Klein

For years, economists have claimed that the only solution to highway congestion is to charge motorists for driving. But it's clear that congestion pricing still remains politically unpopular. People easily recognize the losses they'll incur by paying tolls. But they ignore the prospective benefits, including equitable distribution of driving costs, reduced congestion, efficient use of road capacity, increased public transit and ridesharing, and funding for highway upkeep and expansion.

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2017-05-31T22:37:28+00:00Categories: ACCESS 11, Fall 1997|Tags: , , |
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Does Contracting Transit Service Save Money?

William S. McCullough, Brian D. Taylor, and Martin Wachs

Reflecting the international trend toward privatizing government services, many scholars and elected officials favor contracting out public transit services. During the 1980s many states and the federal government implemented policies that explicitly favored private-sector participation in the provision of transit service. Proponents continue to argue that contracting will bring dramatic cost savings and improved service and have recently convinced many transit agencies to switch to contracted service.

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2017-05-31T22:37:52+00:00Categories: ACCESS 11, Fall 1997|Tags: , , |
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