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I’ll Tell You What I Think: A National Review of How the Public Perceives Pricing David Ungemah , Associate Research Scientist Tina Collier , Associate Transportation Researcher 2007 Annual Conference – Transportation Research Board

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i ll tell you what i think a national review of how the public perceives pricing

I’ll Tell You What I Think:A National Review of How the Public Perceives Pricing

David Ungemah, Associate Research Scientist

Tina Collier, Associate Transportation Researcher

2007 Annual Conference – Transportation Research Board

slide2
Experience is a hard teacher because she gives the test first, the lessons afterwards.

- Vernon Sanders

this is a fine mess you ve gotten me into
This is a fine mess you’ve gotten me into!

Annual delay per traveler by size of urban area

Source: 2005 Urban Mobility Study, TTI.

erosion in value of fuel tax by inflation
Erosion in Value of Fuel Tax by Inflation

Average state motor fuels tax

Federal motor fuels tax

Source: GAO Report (2006)

vmt rising much faster than population and highway growth
VMT Rising Much Faster than Population and Highway Growth

Source: Texas Transportation Challenge, TXDOT (2006)

highway revenue needs txdot urban areas
Highway Revenue Needs: TxDOT Urban Areas

Source: Texas Transportation Challenge, TXDOT (2006)

pricing bridging the gap
Pricing: Bridging the Gap

FINANCE

DEMAND MGMT

GROWTH

MOBILITY

SYSTEM SUSTAINABILITY

types of pricing
Types of Pricing

New Capacity

  • Managed Lanes
  • Mileage (VMT) Fee
  • Variable (area) Fee
this presentation
This Presentation
  • Although there’s a need for pricing…
    • Manage demand
      • Reduce congestion at its source
    • Raise revenue for highway & transit capacity
    • Leverage consumer economics
  • … Has the public been convinced of the need for pricing?
managed lanes 12 states 40 projects
Managed Lanes: 12 states, 40+ projects

I-394

NJ Turnpike

I-15

SR-91

I-25

I-15

I-10 & US 290

Implemented

Tampa Bay Expy

Pending/Studied

Interested

use based fees who s studied
Use-Based Fees: Who’s Studied?

Seattle

Minneapolis

Manhattan

Portland

Boulder

Bay Area

Los Angeles

Atlanta

use based fees who s experimented
Use-Based Fees: Who’s Experimented?

Seattle-Area (Variable Fee)

Oregon (Mileage Fee)

(Pay As You Drive Insurance)

public has high expectations
Public has HIGH Expectations
  • Maintain a superior public roadway system
    • Adequate maintenance
    • Address congestion
    • Expand capacity
    • Preserve the environment
    • Keep us economically competitive
  • Gas tax revenues should cover costs

Source: TTI / TxDOT Public Opinion Research, 2004.

public has concerns about pricing
Public Has Concerns About Pricing
  • Persistent controversial issues
    • Equity for low-income individuals
    • Geographic distribution of benefits and burdens
    • Privacy of electronic toll collection
    • Double-taxation implications of a public highway system
  • Tolls are an easy target for criticism
    • Why pay more if someone else tells you that you don’t have to pay more?
the political gotcha
The Political Gotcha!

Nature of U.S. government:

The closer any agency is to implementing a new policy…

… the greater the agency is at risk of “last minute withdrawals” of political support

Pricing projects are an easy target for criticism

Exacerbates the “last minute withdrawal” problem

Easy to make headlines criticizing projects

Difficult to make headlines outlining benefits

hits and misses
Hits and Misses
  • Every state has hits and misses in terms of gaining acceptance for tolling and pricing
    • Minnesota public and politics…
      • rejected tolls on SH-212 and I-494
      • accepted HOT lanes on I-394
    • Texas public and politics…
      • accept managed and toll facilities in Dallas / Houston
      • strongly oppose tolling and pricing in San Antonio
selected experience 91 express lanes
Selected Experience: 91 Express Lanes
  • SR-91 Express Toll Lanes
    • Planned as HOV lanes; built as toll lanes
  • Public Opinion
    • Initially lukewarm (45% approval)
    • After implementation, 60% approval
      • Over 65% believe tolls are an “effective means to address congestion”
selected experience i 15 hot lanes
Selected Experience: I-15 HOT Lanes
  • I-15 HOT Lanes
    • Built as HOV lanes; adapted to HOT lanes
  • Public Opinion
    • 89% view as success
    • 77% approve of concept of tolling
    • 66% approve of HOT lanes on I-15
    • Consider the program fair …
      • 71% general purpose lanes users
      • 75% HOT lane users
selected experience texas
Selected Experience: Texas
  • Toll systems
    • HOT Lanes on I-10 and US 290 in Houston
    • Traditional toll facilities in Dallas / Houston
    • Express Toll Lanes under…
      • … construction in Dallas / Houston
      • … consideration in Austin, San Antonio, and El Paso
  • Public Opinion
    • 71% oppose pricing existing roads
      • Now outlawed by state statute
    • 52% oppose pricing new roads
    • 82% improve existing before building new
    • 75% tolls should terminate after construction
lessons learned barriers to acceptance
Lessons Learned: Barriers to Acceptance
  • Ideological opposition
    • NOT a partisan issue
  • “Free” is better than “not free”
    • Ensure “free” options are competitive options
  • Obscure funding processes
    • Planned = promised
    • Public / private partnership not well understood
  • Perceived unfairness
    • Perception of unfair is enough to undo projects
    • Variable pricing = consumer gouging
lessons learned selling points
Lessons Learned: Selling Points
  • HOT lanes – the current compromise
    • Ways to use and benefit without paying more
  • Demonstrable experience with pricing
    • Easier to accept
    • Multiple facets of “free” alternatives
  • Advancing construction of new facilities
    • “User pay” system still has resonance
    • Connect users with who pays for the new roads
lessons learned identifying potential advocates and opponents
Lessons Learned: Identifying Potential Advocates and Opponents
  • Business Groups
  • Environmental Groups
  • Grassroots / Ideological Organizations
  • Government Leaders
  • Transportation Professionals
lessons learned public education
Lessons Learned: Public Education
  • Simple question: Why are you doing this?
    • Distinguish concisely & simply the concepts
    • General messages with resonance:
      • Efficiency
      • Reliability
      • Simplicity
      • Project advancement
  • Think like a consumer
  • Educate like a business
lessons learned the right forum
Lessons Learned: The Right Forum
  • Multiple forums for public debate
    • Purpose & need: Relief of congestion vs. finance tool
    • Alternatives assessment: Congestion pricing to reduce new capacity needs
    • Environmental documentation: Augment financing
  • Beware reality
    • Toll proponents for congestion pricing may become opponents of tolling as a means to finance new capacity
  • Careful and deliberate process of planning, documenting, and educating
conclusions
Conclusions
  • Projects that are politically acceptable:
    • Fairly simple in design
    • Build incrementally on experience
    • Address clearly understood and widely supported objectives
    • Involve transparent financial flows that facilitate public trust

Source: Road Pricing for Congestion Management, 1994

resources
RESOURCES
  • TRB Congestion Pricing Committee:
    • http://www.trb-pricing.org/
  • Value Pricing Homepage
    • http://www.valuepricing.org/
  • TTI Managed Lanes Library
    • http://managed-lanes.tamu.edu/

Author’s email: D-Ungemah@tamu.edu