Another Free-Market Argument for Congestion Pricing

An opinion piece in today’s New York Sun addresses the congestion-pricing incentives laid out in the Bush Administration’s new budget proposal. The article, by Diana Furchtgott-Roth, a former chief economist at the US Department of Labor who is now with the conservative Hudson Institute, argues that "the only effective way to reduce traffic congestion is to use pricing," and that "Americans rely on prices for a
stable supply of food, clothes, water, energy, and telecommunications.
Why should roads be an exception?"

Citing Singapore, Oregon, and California as potential models for different types of variable road pricing, Furchtgott-Roth attempts to address objections from both the left and the right:

Some on the political left claim tolls are unfair to lower-income drivers. To resolve this, Alameda County, Calif., and Atlanta, Ga., are experimenting with Fast and Intertwined Regular lanes. Drivers in fast lanes pay tolls, and drivers in slow lanes receive credits. Such credits can be used toward payment of tolls for future trips, or for other transit-related activities. In New York, credits could be given to lower-income drivers through license plate numbers.

But it’s not tolls that are particularly detrimental to the poor, because they can be rebated – it’s congested roads. Congestion lowers mobility, making it harder to travel to much needed jobs. Converting some highway lanes to toll lanes gives low-income drivers a valuable choice of more time. A waiter on his way to pick up a child from day care might find a toll cheaper than a late fee.

An objection from the right is that President Bush is breaking his no-tax pledge. However, like parking charges, tolls are not a tax. They are a user fee for road space. Toll revenues can be used not only to ensure that road space is not overly crowded and available when people most need to use it, but also to finance road improvements. One example is new truck-only highways, such as a new tunnel from Brooklyn to New Jersey.

That waiter example isn’t exactly compelling. But judging from the debate that’s been going on here all week over the congestion-pricing question, it seems Streetsblog readers will have their own thoughts on Ms. Furchtgott-Roth’s theories. Anyone care to discuss?

  • I like how she reframed the idea of congestion pricing being a “user fee” instead of a tax. The other way to organize this would be to start a feebate system whereby the taxes collected from the tolls get equally distributed among all people, whether they drive or not. That way you are really only penalizing a small fraction that overuse the roads, bridges or the high speed toll roads.

  • P

    You’re right Glenn- it’s a good political move: don’t want to pay for it? Don’t use it.

    I’m more convinced about the waiter example- it relates to the issue of choice: we could take the ‘democratic’ path and allow the govermnet to eliminate the option to drive for rich and poor alike or we can allow drivers to make these decisions on their own depending on their needs.

  • ABG

    I’m distressed by Furchtgott-Roth’s idea of a truck-only “tunnel from Brooklyn to New Jersey.” Ugh. If my NIMBY neighbors in Queens that have been blocking the cross-harbor rail freight tunnel because it would put more trucks on the street show a double standard and allow a truck tunnel to go through, I’m going to be seeing red.

  • P

    Yeah, I wonder if she is aware of the Cross-Harbor Tunnel. It seems like a much better solution to me.

  • Calling it ‘democratic,’ scare quotes or not, gives the rationing argument more rhetorical weight than it deserves. A free market solution that is imposed by our elected representatives will be as democratic as any other law we live under.

  • Jane

    Price incentives should apply to BOTH cars AND mass transit. Increased pricing for cars makes them less attractive; decreased pricing for mass transit would make it more attractive. Revenues from congestion pricing could be applied to subsidize the fare, creating a balanced transportation policy with a carrot AND stick approach to eliminating traffic. Theodore Kheel’s Nurture New York’s Nature has recently commissioned a $100,000 study to study this issue. See http://www.csrwire.com/PressRelease.php?id=7437.
    The press and congestion price advocates should join consider ALL types of price incentives. Why look at only half the picture?

  • Drivers in fast lanes pay tolls, and drivers in slow lanes receive credits. Such credits can be used toward payment of tolls for future trips, or for other transit-related activities. In New York, credits could be given to lower-income drivers through license plate numbers.

    Uh, how do I get my credit chit for not having a car and (almost) never taking up any lane at all?

  • Though your post is a bit dated, I thought I’d supply a relevant link to a post at rightOregon.org which contains more objections to “Congestion/Rush Hour Pricing” as well as “subsidies to fuel-efficient” vehicles. These nuances are being considered alongside Oregon’s “Road User Fee” pilot program.

    With kind regards,

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