Steve Heminger Executive Director, MTC Joint Policy Committee September 21, 2007

1. Getting the Price Right • Steve Heminger • Executive Director, MTC • Joint Policy Committee • September 21, 2007

2. Transportation 2035 Vision Performance Targets • ECONOMY: Reduce congestion (delay) • Governor’s Strategic Growth Plan: 26% below 2005 levels by 2020 • Target: 20% below 2006 levels by 2035 • EQUITY: Reduce the share of income spent by low-income households on housing and transportation • Center for Housing Policy 2006 report: Bay Area households 10% above national average • Target: 10% reduction by 2035

3. ENVIRONMENT: Reduce Vehicle Emissions and Vehicle Miles Traveled • Carbon Dioxide • Governor’s Strategic Growth Plan: 1990 level by 2020 and 80% below 1990 by 2050 • 2006 CA Global Warming Solutions Act: 1990 level by 2020 • Target: 40% below 1990 level by 2035 • Particulate Matter • State Standard PM2.5: 10% below 2006 by 2035 • State Standard PM10: 45% below 2006 by 2035Target: Same • Vehicle Miles Traveled (VMT) • SB 375 (prior to amendment): 10% below 2006 by 2030 • Target: 10% below 2006 by 2035

4. The Limits of Infrastructure Investment

5. Transportation 2030 Investments Transit(63%) Maintenance (51%) Efficiency (1%) Expansion (11%) Roads(37%) Maintenance (29%) Efficiency (3%) Expansion (5%)

6. Transit Spending as Percent of Funding in Long-Range Transportation Plan

7. Highway Expansion as Percent of Funding in Long-Range Transportation Plan

8. Transportation 2030 Performance Source: Transportation 2030 Plan Draft Environmental Impact Report

9. Transportation 2030 Vision “In the long run, building unpriced road capacity in a growing region is fighting a losing battle with traffic congestion.”

10. The Impact of Pricing Policies

11. Peak Pricing Common in Many U.S. Industries Telephone Charges Hotel Rates Air Fares Movie Tickets

12. … But Not in the Transportation Sector

13. Top Ten Congested Metro Areas Source: Texas Transportation Institute, 2007

14. European/Asian Model:Cordon/Area Pricing London Stockholm Singapore

15. Small Charges Can Reduce Traffic By A Lot: Stockholm • Toll per trip as low as $1.50 • 9% to 26% reduction in traffic at cordon locations • 10% to 14% reduction in inner city emissions • 40,000 increase in transit trips per day Source: IBM

16. Higher Charges Even More Effective: London Toll: $16 per day Transit ridership increase (2%) Travel time reduction for trips into the zone (-14%) Travel time reliability improvement (+30%) Traffic reduction within in the zone (-30%) Source: Transport for London

17. U.S. Model: HOT Lanes Orange County (1995) San Diego (1998) Houston (1998) Minneapolis (2005) Denver (2006) Seattle (2008) Miami (2009) Bay Area - I-680 (2010)

18. HOT Lanes AchieveModest Success • Orange County • Used by all income groups and occupation categories • Toll lanes double vehicle throughput • San Diego • Carpooling up 58% since I-15 HOT lane opened • Revenues fund express bus • Minneapolis • Travel speeds in general purpose lanes up 2% to 5% • Corridor crashes down 12% • Revenues fund express bus

19. HOT Lanes Are Popular Minneapolis: What do you think of allowing single drivers to use the carpool lanes by paying a toll? After 6 months of operation Source: NuStats Presentation

20. Proposed Bay Area HOT Network Revenues could cover costs Billions (2006 $) Net revenue from converted lanes* Capital cost to close gaps High est. Low est. * Net revenue over 30 years

21. But… • HOT lanes are popular because motorists can choose to use them – or choose not to • That choice also limits the effectiveness of HOT lanes as a congestion relief strategy for most motorists

22. Cordon Pricing in the U.S.? New York? San Francisco?

23. Urban Partnership Program • $160 million grant from U.S. DOT • Focus is Doyle Drive congestion pricing • Would complete funding package for one of worst “structurally deficient” highway bridges in California • Contingent on state Legislative authorization for tolling on Doyle Drive

24. The Politics of Congestion Pricing

25. Why is paying more (higher tolls) for a scarce commodity (road capacity) such a hard sell (in transportation)?

26. Are There Technology Obstacles? © 2006 John O’Brien from cartoonbank.com. All Rights Reserved.

27. Toll collection lanes with electronic toll collection capability Source: FHWA Not Anymore

28. Is the Public Opposed?

29. Not if You Ask Them 1995 Bay Area Poll: $3 peak toll 2000 Bay Crossings Study: $4 peak toll Support for Congestion Pricing

30. Is Pricing Fair to the Poor? • The answer depends on two things: • Who pays the higher toll • How the revenue is spent

31. Who Pays Household Income: Average Household vs. Bay Bridge Peak Commuters

32. Robin Hood Spending • Travel alternatives –transit, carpooling, vanpooling • Off-peak discounts – lower tolls in non-commute hours • Lifeline toll – similar topublic utility programs for low-income customers

33. Annual Household Income: Comparison of Transit Riders and Bay Area Population

34. Transportation 2035 VisionSensitivity Tests

35. Pricing Analysis (Year 2035 costs in 2007$) Carbon/VMT Tax Double auto operating costs (from $0.23 to $0.46/mile) Congestion Pricing $0.25/mile on congested freeways Parking Charges$1/hour surcharge ($8/day for work trips & $1/trip for non-work trips) Assess discount programs for low-income travelers

36. Toll Comparison +23 cents – auto operating +25 cents – congestion charge +36 cents – parking fee Cents per Mile

37. Traffic Congestion = Evil #1Congestion Pricing = Evil #2

38. “ When faced with a choice between two evils, I always choose the one I haven’t tried before” Mae West