UK Thought Leadership

I laughed so hard I cried.

Sparing partner and mythmaker Peter Roberts the heroic author of the 2007 1.81M signature Downing street petition that brought the UK National Road Pricing program to it knees remains the most influential congestion pricing thought-leader in the UK. Far outranking Mayor Livingstone whose legacy congestion pricing zone has lost over half of its efficacy, Mr Roberts still leads a crusade against everything that is not inside an automobile.

In 2003 many predicted that the UK would have National Road Pricing by 2014. Today, I predict that in 2034 the UK and the Congo will be the only two countries on the Earth left with free roads. They’ll be full of stopped cars, but they’ll be free.

Favorite new Robertian road myth: "It is madness to suggest that by building a new road we are causing a problem rather than solving one."

Here is the article just in case someone saves Britain and burns the original. What a mess.

Congestion Charging Makes Crash Gordon Look Popular

Beleagured Prime Minister Gordon Brown has only collected 60,000 signatures on the 10 Downing St. Petition asking him to resign - compared with the 1.8 million who signed against Road Pricing in 2007.

"It may provide a crumb of comfort to Gordon Brown that road pricing is 36 times more unpopular than his premiership", said the ABD's* Nigel Humphries. "But it's a disaster for his team of transport advisers, who appear to be wedded to the concept in the face of unparalleled public hostility."
*Association of British Drivers

Although plans for a national road pricing scheme were put on the back burner following the petition, the government has been twisting the arm of local authorities by offering transport investment in exchange for city based charging schemes.

In Manchester, voters in the 2008 referendum were told there was "no plan B" for transport investment should they reject road pricing plans for the city. Reject them they did, by an overwhelming majority, and within a few months an alternative transport plan has been produced, providing £1.4bn for the tram extension which was supposed to be impossible without road pricing.

In Cambridge, the latest city to pick up the poison chalice, the ABD has slated plans for a congestion charge on the grounds that traffic levels in the city are already in freefall - just as they were in Manchester and in most other British cities.

"When will they get the message that road pricing is not wanted?" said ABD Chairman Brian Gregory. "It's an unfair, regressive tax on necessary car journeys, it harms local businesses and it works against urban renewal programmes by encouraging people to live, work and shop away from city centres."

Road pricing is not necessary, nor is it financially viable - it is part of a political policy designed to penalise drivers and force them off the road, one step at a time. Leader of Birmingham City Council, Mike Whitby, described congestion charging on essential car journeys as 'morally corrupt' at the 2009 Birmingham Transport Summit. Thankfully, the concept is dead and buried in the West Midlands. Surely it is time to abandon it nationally and get back to building a competitive infrastructure for the UK?

How can a country-full of professional transportation people be so wrong in the face of such clear understanding and moral outrage? Road pricing! My word!

One is used to hearing, every time a government increases or adds a tax, cries of gouging and grabbing. But note in the video at the Manchester link above that the politicians came up with part of a new transport package by taxing everyone instead of just motorists. A tax was still raised, albiet smaller and a transport plan was still proposed, though less grand. But this is seen by the congestion-worshippers as a victory, as capitulation, as proof that the politicians "had the money after all". I'm not especially a fan of politicians, but if I was forced to be one, I would not choose to be one in the UK.

Did LaHood just extend a hint to NYC?

US Federal Transportation Secretary Ray LaHood recently

spoke about Mayor Michael Bloomberg's congestion pricing initiative, which would have charged drivers a fee for coming into parts of Manhattan. The city was slated to receive about $350 million in federal transportation funds to implement the plan, but it was stalled by State Assembly Democrats in Albany. LaHood said the money is still there if lawmakers change their minds. “The money that was going to be provided for that particular project is still at the Department of Transportation,” said LaHood. “If New York got its act together around that kind of opportunity, I think we would look at it.”

This $350M made-on-TV offer was oddly squeezed in after a more current story about airport congestion. Somebody in Manhattan, please start making some serious noise here!

We all know that congestion pricing is not dead in NYC, and we also know that the way it was proposed a couple of years ago was a pretty brutal approach that in some key ways mimicked the London system – a flat-rate cordon that is expensive, inflexible and while effective at first has over six years lost almost all of it absolute benefits. To be cautious, the assumption is that if it had never been installed, London would be even worse-off (relatively and absolutely), but the point is that a blunt, fixed-rate cordon is a brain-dead approach, that I would not even wish on Tehran or Pyongyang.

There is another message, here, that LaHood is giving us. The money that was ear marked for NYC two years back was forfeited after the State legislature voted against it by simply not voting at all (talk about cowardice!). But now LaHood says: “The money … is still at the Department...” Well, not exactly just sitting there in a shoe box waiting for NYC. What is happening, is that LaHood needs to find someone bold enough to start taking the advice of the National Surface Transportation Infrastructure Finance Commission, and start charging mileage-based fees. Mayor Bloomberg is just the man.

So what NYC needs to do is to think about a proper mileage-based scheme, instead of gantry-madness. One that can eventually manage congestion in all five boroughs, with lower rates outside Manhattan. One that would even allow Manhattan to sell gas without a gas-tax to participants in a proper ‘pay-for-use’ system.

There really is a way to abandon the gas-tax. And that technology is ready. And now even the courage that is needed is less than ever…

~~~added next day ~~~

Here is more reaction. First from Streetsblog...and secondly from Streetsblog. Huh, only Streetsblog? is anyone else awake? Oh, here is secondavenuesagas.

Considering the non-response in the press, maybe we are stimulated-out with respect to large sums of money. Or is $350M now just chump change that folks like LaHood just keeps in a wad in his drawer? Alternatively, maybe New Yorkers are so defeated by Albany that LaHood couldn't get a rise out of them. One activist sent me a comment: "Honestly, I don't think ANYONE in NYC is going to seriously advocate for congestion pricing until something major changes in Albany."

Intelligent Solutions to America’s Transportation Challenges

The Intelligent Transportation Society of America (ITS America) recently forwarded recommendations to Congress re Authorization of the next Transportation Bill.

Here are two key outtakes from those recommendations pertaining to mileage-based user fees:

VMT-Based User Fee Demonstrations –

The Smart Towns and Cities would provide ideal locations to conduct real-world demonstrations and operational testing of a vehicle miles traveled (VMT)-based user charge demonstration program.

According to the National Surface Transportation Infrastructure Financing Commission, a VMT-based system “should be designed to facilitate integration with intelligent transportation systems, such as traveler information systems, and with emerging IT-based safety applications such as vehicle infrastructure integration programs” and “existing vehicle GPS systems.” The Commission further notes that “Pricing technology could be implemented in conjunction with a program such as IntelliDrive(SM)…, which, as envisioned, “will support secure communication between the vehicle and roadside to support mobility, traffic management, and traveler safety.” The Commission concludes that using technological advances to improve how people pay for their use of the transportation system “will enable the delivery of a host of other benefits, including real-time information to vehicle drivers to help reduce congestion, improve safety, and reduce emissions, to transit operators to improve the convenience and reliability of public transit, and to system managers to better monitor and manage the system and improve the allocation of transportation infrastructure resources.”

Congress should provide towns and cities receiving funding under the Smart Towns and City Streets Initiative with incentives to conduct broad-based demonstration programs of mileage-based user fees that could vary by time of day, pricing zone and other factors; be interoperable with other tolling, pricing, and intelligent transportation systems; and accommodate multiple forms of payment including cash, credit and debit cards, the Internet, and other integrated payment systems.

Conducting a VMT User Fee Research, Development and Demonstration Program –

The National Surface Transportation Infrastructure Financing Commission, in its recently released report, unanimously called for an aggressive research, development and demonstration (RD&D) program to address technical and policy challenges associated with the possible deployment of a VMT-based user fee as a potential financing mechanism for our nation’s transportation system. The Commission recommends that the RD&D program be overseen by a multimodal body within U.S. DOT that combines technology, policy, tax administration, and systems expertise, with the ITS Joint Program Office cited as an example of one such body. The Commission further recommends the creation of an expert independent advisory committee to help review and advise on funding of R&D and pilot programs, to further explore policy issues, and to make specific recommendations to Congress regarding the best option(s), system design, required technology, and implementation plan.

Moving forward on a mileage-based system will require extensive coordination and consensus building among the public and private sectors. ITS America’s membership – which includes a broad cross-section of state and local transportation and planning agencies, university research centers, and industry leaders from automakers and tolling companies to GPS device manufacturers and real-time traffic data providers – provides a unique combination of research, technology, policy, and systems integration expertise that will be critical for advancing an effective mileage-based charging system. In addition, ITS America’s role as a national 501(c)(3) association and former Federal Advisory Committee to the U.S. DOT presents a unique, independent resource for providing research, technology and policy expertise and building consensus across the public and private sectors.

To effectively implement the RD&D program, U.S. DOT should utilize ITS America’s unique expertise and broad-based membership to review and advise on funding of R&D and pilot programs, to further explore policy issues, and to make specific recommendations to Congress regarding the best option(s), system design, required technology, and implementation plan. Furthermore, the U.S. DOT should engage ITS America in conducting a report that would identify:

• Necessary protocols and systems to accommodate concerns regarding personal privacy;
• Impacts of such a system on rural drivers who have no choice but to drive long distances;
• Options related to the method and point of collection of a national VMT fee;
• Methods to ensure the feasibility of multiple forms of payment;
• The administrative costs associated with such a national program;
• Whether it is more logical to transition all vehicles simultaneously or some vehicle classes first as early adopters;
• How to ensure individuals are not paying both the gas tax and the VMT fee under any phased-in transition approach;
• Impacts of a voluntary or mandatory use of the system;
• Whether different systems for different vehicle types will be necessary or appropriate, including pilot programs for automobiles and different classes of trucks;
• How to provide the positioning accuracy and availability necessary to support state, local, or private charges based on specific areas or lanes traveled; and
• Other benefits that could be gained through integration of a VMT-based user fee system with other intelligent transportation systems and technologies including IntelliDrive.

How much will Pay As You Go driving cost you?

There is an oft-stated fear that time, distance, place (TDP) road use charging will “price cars off the road”. (The US calls this VMT charging.) Let’s play with some numbers.

Revenue Neutral (see comment #2): The average American motorist pays less than $20 (about $C25 in Canada) per month in fuel taxes. That is $240 per annum or 66 cents per day. 1000 miles per month means about 2 cents per mile as a rough figure. In this scenario you would pay the same amount in a mileage charge instead of a fuel tax.

System costs: This is unrealistic because TDP charging costs a couple percent to operate – assume a 4% credit card level – so expect to pay an extra $0.0008 per mile to stay revenue neutral or $9.60 per year to have the charge collected. We are now at $250 per annum, up from $240. Or up 2.75 cents per day.

But this is also too simplistic, because you are not paying enough to keep the roads up anyway, so…

More Funding needed: To make up the projected $15B annual shortfall in the Highway Trust Fund (shared by 253M vehicles), your share would be an extra $5 per month or ½ cent per mile. So a flat mileage fee that tops up the Highway Trust Fund would mean an average of $.0258 per mile or $310 per year up from $240. An average of $70 difference annually means an extra 20 cents per day per vehicle compared to now – what’s that – the price of a cigarette, right? Do we really want to keep our crowded, crumbling roads, and polluted cities to save 20 cents a day?

And who would not be able to drive their car to work because of 20 cents? So what’s the fuss?

Well, TDP charging means variable rates. Time, distance and place means that more or less will be charged for traveling at more or less congested times or in more or less congested places. So, as an example only, expect that driving in congested times or places would cost you 3 or 4 times more per mile (say 8 to 10 cents* at the top of the scale, up from 2.5 cents) AND driving in less congested places and times would cost less (say, 1.5 cents at the bottom of the scale). So immediately, if you are a rural dweller you would be better off while an urban dweller who takes a car into the city at rushhour could be worse off.

* Yes, Manhattan might go higher. But why are you driving in Manhattan?

But who among us ONLY drives in congested places and at congested times? If you are a suburban driver who drives the same 12,000 miles after charging begins, at the projected average 0.258 cents per mile for 2/3rds of your trips and 10 cents per mile for the other third, your annual road use fees would be $606 instead of $310 or an additional 81 cents per day more than the simple, non-green, miles-traveled, non-variable rate.

The assumption is that a majority of urban drivers will have some choice regarding traveling earlier or later or by different means. More efficient car types will also carry lower TDP per-mile rates. Perhaps the suburban driver will pay more for a long daily commute. Or perhaps that driver will start using light rail where it is available. The key is: the amount of road use charge to be paid for the same miles traveled can be altered by the choices the driver makes rather than how many gallons of gas are used. You will have some choice of cheap miles and expensive miles. That is not possible when paying gas-taxes fixed by volume.

To be realistic, only the drivers who still prefer to drive during rushhour would pay more. For those that wish to do so or the few that literally have no choice, at least their trip will be less congested.

TDP road use charging carries advantages for all of us.

Rising Oberstar

A lot of influential transport leaders understand why moving to a Vehicle Miles Traveled (VMT) form of road user charging and away from gas taxes is essentially unavoidable. Since this is not understood by the average motorist, few of these leaders speak out about it – fewer still if they depend on votes to keep their job.

One of those rare people, US Representative James Oberstar, D-MN and House Transportation and Infrastructure Committee chairman carries the torch for VMT charging in the United States. He recently told White House press secretary Robert Gibbs: “…transportation policy isn’t going to be written in the press room of the White House,” – which I am sure several thousand of us wished we could have said.

The National Surface Transportation Infrastructure Finance Commission (NSTIFC) report “Paying Our Way” and the American Association of State Highway and Transportation Officials (AASHTO) call for VMT charging by 2020, and Representative Earl Blumenauer, D-OR, has recommended that pilot programs be included in the upcoming US transportation bill.

But Oberstar asks “Why do we need a pilot program? Why don’t we just phase this in? I'm at a point of impatience with more studies.” He asserted: “There are many suggestions it would take five to 10 years. I think it could be done in far less than that, maybe two years.”

Oberstar warns “if we do nothing … [the highway trust fund] will run $US90B short in six years”. He points out that people spend 40 hours a year in their cars longer than if they could travel at posted speed. “We need to cut that waiting time in half.”

The key social issues he and fellow law-makers grapple with are privacy protection, fair distribution of revenues, and driver equity (there is a fear that rural drivers could be treated unfairly). Oberstar knows “this has to be done in an open deliberative process” and that “it would take years to install the technology on 253M vehicles in America.”

So what’s the difference between Oberstar’s “let’s phase it in” and Blumenauer’s recommendation for pilots? Courage and commitment. Lawmakers know this change is big – ten or more years big. But only Oberstar’s commitment will meet NSTIFC and AASHTO schedules. I thanked Secretary Mary Peters in this column (Feb/Mar 08) for talking straight for the previous administration about the failure of the gas-tax. I applaud Congressman Oberstar, now, for talking straight for this administration.

The Biggest Myth of All

The tendency of many politicians is to see the shift away from gas-tax to road use charging as something so onerous as to be best left to the “next administration” is a common theme. Expedient at best. To assume that it is impossible to make this shift, as an ex-mayor of Toronto did recently is to step over the fact that such a shift it is almost certainly unavoidable – i.e., that rather than impossible it is inevitable (see outtake, below). That is the elephant in the room.

On Thursday 30 April, Steve Paikin's panel on TVO’s Agenda, (filmed live at Toronto’s Munk Centre for International Studies) included:

• John Sewell (past-Mayor Toronto, '78-'80)
• Glenn Murray (past-Mayor Winnipeg '98-'04) now president of the Canadian Urban Institute
• David Crombie (past-Mayor Toronto '72-78)
• Adam Giambrone (one of Toronto's favorite councilors and chair of the Toronto Transit Commission)

Paikin’s debate that night was: “Toronto: World Class or Second Class?”

The program included a Post-Show Web Chat to respond to call-in questions. One of the questions was: “Why doesn’t Toronto start charging for driving downtown?”

During the ensuing seven minute response, one was able to learn most of what one needed to know to think intelligently about road use charging. The entire socio-political history (Crombie, Giambrone), the social-urban potential (Giambrone, Murray), the social-urban value (Murray) were outlined. Toronto has never been so well informed or so prepared to have an informed debate, as they were that night.

The heart breaker was Sewell’s unfortunate overstatement that followed such a mature understanding from the prior speakers. He said emphatically that it could never be done. Ever. That it was a dead issue. That three other sitting mayors he interviewed told him so.

Thoughtless consensus like this burned witches not so long ago. Exaggerations like Sewell’s (well known for thinking only in black and white), help hide the truth from Paikin’s viewers.

Sewell’s door-closing diatribe serves only to scare Toronto and its politicians away from grown-up debate. His unnecessary and simplistic comments overshadowed and negated the intelligent comments from Giambrone and Murray, as well he mocked the question that some congestion-oppressed Toronto citizen posed.

To see this seven minute segment, go here: then click Post-Show Web Chat (check you are in the right video by checking length is 25:16). Listen from timemark 16:55

~~~

FULL TRANSCRIPT: 7 minute segment of Toronto: World Class or Second Class? TVO Agenda. Steve Paikin - Exclusive Web Chat

Steve Paikin [show host] here’s the next question: “Why doesn’t Toronto start charging a tax or a fee for driving downtown?:

SP: Is that something that you ever considered back in the 70’s?”

David Crombie [Toronto Mayor 1972-78]: “No.”

SP: “Would it have worked today? Other places do it.”

DC: “It might, it certainly… in London they had a good experiment, and I just don’t know how they are doing now. I just don’t know.” The Toronto experience that I had, it was not on as a policy, no. We tried other ways in which to make driving downtown more difficult, we chose not to widen streets even though we were pushed to do so, etc… we tried a number of things, but using a pricing system, no. We put up the cost of parking.”

Adam Giambrone [Toronto Councillor since 2003 and chair of the Toronto Transit Commission]: “There are lots of cities that tried to do so. Singapore, Stockholm, New York tried and got pushed back, they are still trying, and London… you know, we could do it but the traffic situation in the GTA is not just about a downtown. You look at the biggest problems in 20 years from now – it’s not going to be the 416, it’s the 905 so you’ve got to be, there’s no, despite what everyone thinks it’s not going to be able to get much worst on the DVP in the rush hour… what we need is a comprehensive regional road tolls, you need to be able to toll people for going from Richmond Hill to Mississauga… coming downtown. You’ve got to put it that way then everyone is on an equal footing so you are not putting another tax on the downtown regions, because you want economic activity coming downtown and also, it actually addresses where the real problems are, which aren’t just downtown. Now I’m not saying there aren’t problems downtown with traffic, but it addresses the entire region and that’s how you do it and that also brings you enough revenue… just taxing… tolling… people coming downtown doesn’t give you enough revenue to actually invest in real public transit and cycling and walking alternatives that are going to shift the modal split, getting people out of their cars and into other modes.”

SP: “Glen….”

Glen Murray [Winnipeg Mayor, 1998-2004, President of Canadian Urban Institute]: “Two things, one, we talk about innovation Skymeter is a Toronto company and its got a technology solution that I think is very workable, if we have the political courage to implement it and it would get rid of parking ticket enforcement and would save us hundreds of millions of dollars and be able to redirect policing to better things and simply have a scale because you can use a GPS system most people can buy. Most of us buy these things so we don’t get lost anyway and so why not take this made in [Toronto] technology which they’re selling to other cities and do it.”

SP: “What does it do?”

GM: “Basically you have a little monitor, and you can park and move everywhere and you pay for road services based on the amount you use and it’s like instead of putting money in a parking meter or paying parking fines, which God knows if you live in Toronto you’ve… I’ve made very generous contributions through the parking authority, here [laughter]… but it’s also this, it’s and people may say that’s unfair, but think about this, over half the property taxes you pay in most Canadian cities and I would guess given the high dependency that Toronto has unfortunately on property taxes doesn’t go to services to your home it goes to services to your automobile and if you live in high density residential and you don’t own a car then you are paying … more than half of your property taxes are going to support the road, parking and infrastructure of that. Why not go to a little fairer system because one of the differences we could learn from Europeans is that you can afford to live in Madrid even though you pay a lot higher taxes than you do in Toronto overall because you don’t have to pay for an automobile which costs you about 12-14 thousand dollars a year, all in, with what you have to do that… and believe me that improves your disposable income especially for working middle class and lower middle class who have to own a car, when you liberate people who can actually spend more time with their kids in the park and a walk there, so why not show some real leadership. Why not invite the citizens of Toronto and the province into a conversation with the provincial and federal government?”

SP: “We’re going to do it next week, a week tonight were going to do it, transit users, cyclists, drivers, truckers, pedestrians… Sharing The Road – that’s our show a week from tonight.”

GM: “Why don’t we make Toronto’s economy if we’re talking about the great economies, and do the bold and the brave, and make us the new system for better more efficient transportation and traffic management and make us a world leader in it.”

SP: “John Sewell…”

John Sewell [Toronto Mayor 1978-80]: I think the traffic problems in the 905, you put a road toll on the 905, or you suggest it as a politician, you will never be elected, ever, so it’s a dead issue, I wish that wasn’t the case, but I was talking with three Mayors last week in regard to my new book [The Shape of the Suburbs: Understanding Toronto's Sprawl] and every one of them said, if we suggest that we will never get elected we are interested in being in power, and therefore...”

SP: “You don’t begrudge them that do you?”

JS: “No, no, no, and the point is…

DC: “…I thought John might!”

AG: “In Stockholm they had a referendum after they implemented it and people voted to keep it because they saw the effect it had, so I’m not disagreeing with you [John] but on the analysis of the politics of it – that’s the problem – but you know it can happen.”

JS: “I’d love to see some one run in Markham on the basis we’re going to have a road tax, they, you won’t hear from them ever again.” [laughter]

GM: “You don’t start it in Markham, that would be like trying to start Medicare in Alberta today… you try to find soil that you can sow it in… if you look at the success that the Americans had with Home Rule… I really think we should learn something there. They have been more successful there than other Canadian cities have had and that Home Rule structure that gives you a series of options so you don’t have to shove it down people’s throats, and you can have democratic citizen participation.”

AG: “The New York assembly blocked the city of New York which was taking it’s democratic right, you know, the Mayor’s elected by the city, they tried to do it and the state assembly convened and specifically blocked them from doing it, so...”

JS: “It should be very interesting to see whether in the city council of Toronto anybody… a majority… would support a road toll. I suspect that people in Etobicoke, North York, and Scarborough are going to say, ‘we don’t want a road toll.’ ”

DC: “The issue in being cut as a road toll, a tax …you pay your money. If the issue is cut starting with even your program what says how do we share the road …and how do we pay for the road that we’re sharing. You’re now cutting the issue a little bit differently the way in fact as has just been suggested we’re now going to talk about sharing the road, how do we pay for that road what’s the technology that we are using can we export that technology and make money out of doing so that’s a much better way of approaching...”

GM: “We forget one part of this; this is a big revenue generator obviously, right? If you just made this revenue neutral and you give Torontonians a 25 or 30% property tax cut and said you can now, and unlike having to write a tax which you have no choice of, you know have a choice of how much you use your car and where you park. It’s now citizen centered controlled taxation. I now control how much I pay, by how much demand I place and if I use less I don’t have to pay for my neighbour who drives an SUV and if they want to do that then they pay for the privileges which is how we pay for many of our services, but you make it revenue neutral you get the tax and if you don’t just shove this in you start a dialogue and you take two or three years which is what they have done in countries which they have done that and you don’t start it in Markham as brave as my dear friend John is and he’s a very brave guy but, you start it, you give cities the options and then when people start to see a big reduction in their fixed taxes all of a sudden in a savvy group of people like Torontonians who don’t embrace the automobile given how much we subsidize it publicly on top of that right now these days – I wish I was an automobile – you get a better subsidy from the federal government than anyone else does why not explore this as a discussion?”

SP: “You have all done such a good job at promoting for what our show’s going to be next week I’m going to bring the gavel down this is a good place to end. Can I thank you once again: John Sewell, Glen Murray, David Crombie, Adam Giambrone – Great discussion – Happy Birthday Toronto, 175. Good night from the Munk Centre at the University of Toronto.”

~~~

Outtake from a recent paper for a US audience, which applies to the Golden Horseshoe, equally:

"We currently pay for our roads with various combinations of fuel taxes, property taxes, sales taxes and spot-tolls associated with specific road segments, tunnels or bridges. In the United States fuel taxes fund less than 50% of the requirement, with individual states varying from that average. Worldwide, this figure may vary, but the trend is the same everywhere – the burden of funding roads, managing congestion and reducing emissions has reaching crisis proportions. The word ‘bankrupt’ has frequently been used to describe the US Highway Trust Fund over the past two years.

"The move toward fuel efficiency, greener energy and even reduced travel in many countries serves to diminish fuel tax revenue, ensuring that every success in transportation efficiency threatens the viability of the infrastructure those vehicles use. To depend on taxation of the energy source we are trying to abandon absolutely threatens our surface transportation networks. With every increase in transportation demand, capital expense and operating expense, fuel-based funding becomes less sustainable. Without stable and sustainable funding, transportation planning is hobbled and once thriving economic jurisdictions choke on mobility demand. This effect is already apparent in most, if not all megaregions of our six populated continents.

"Hence, we are being forced to reestablish a sustainable revenue-base for our road networks. Governments can tax anything they wish. Seeking to minimize political controversy, this may lead to new sales taxes, property taxes, and use of general funds. However, charging for use according to when where and how much is driven opens the door to a powerful demand management tool that can manage productivity-throttling congestion. If we consider vehicle type in a progressive charge calculation we can also speed the change to greener vehicles. Paying for use as detailed in the February 2009 report “Paying Our Way” from the US Congressional National Surface Transportation Infrastructure Finance Commission can be set up as win-win for all stakeholders."

Oberstar Gets It

Minnesota Representative James Oberstar may have been somewhat tentative about VMT pricing a year ago. But he is now very clear indeed. With Mary Peters no longer on stage, Oberstar has become to the US what Livingstone was to London and Eurlings is to NL. At a recent symposium re Mileage-Based User Fees, Oberstar's positive influence and encouragement was clearly felt during the final round table.

I will return to this article shortly and discuss its assumptions in depth.

Full Text Here for Archival Preservation purposes only. The original is here.

Minnesota Rep. Jim Oberstar advocates mileage-based tax

GPS would track driver use of roads

By Joan Lowy
Associated Press

Updated: 04/28/2009 11:39:36 PM CDT

A House committee chairman said Tuesday that he wants Congress to enact a mileage-based tax on cars and trucks to pay for highway programs now rather than wait years to test the idea.

Rep. Jim Oberstar, D-Minn., said he believes the technology exists to implement a mileage tax. He said he sees no point in waiting years for the results of pilot programs since such a tax system is inevitable as federal gasoline tax revenues decline.

"Why do we need a pilot program? Why don't we just phase it in?" said Oberstar, the House Transportation and Infrastructure Committee chairman. Oberstar is drafting a six-year transportation bill to fund highway and transit programs that is expected to total about a half-trillion dollars.

A congressionally mandated commission on transportation financing alternatives recommended switching to the vehicle-miles traveled tax but estimated it would take a decade to put a national system in place.

"I think it can be done in far less than that, maybe two years," Oberstar said at a House hearing. He was responding to testimony by Rep. Earl Blumenauer, D-Ore., who recommended that the transportation bill include pilot programs in every state to test the viability of a mileage-based tax.

Blumenauer said public acceptance, not technology, is the main obstacle to a mileage-based tax.

Pilot programs "would be able to increase public awareness and comfort and it would hasten the day we could make the transition," Blumenauer said.

Oberstar shrugged off that concern.

"I'm at a point of impatience with more studies," Oberstar said. He suggested that Rep. Peter DeFazio, D-Ore., chairman of the highways and transit subcommittee, set up a meeting of transportation experts and members of Congress to figure out how it could be done.

The tax would entail equipping vehicles with GPS technology to determine how many miles a car has been driven and whether on interstate highways or secondary roads. The devices would also calculate the amount of tax owed.

"At this point, there are a lot of things that are under consideration and there is also a strong need to find revenue," Oberstar spokesman Jim Berard said. "A vehicle miles-traveled tax is a logical complement, and perhaps a future replacement, for fuel taxes."

Gas tax revenues — the primary source of federal funding for highway programs — have dropped dramatically in the past two years, first because gas prices were high and later because of the economic downturn. They are forecast to continue going down as drivers switch to fuel-efficient and alternative-fuel vehicles.

Transportation Secretary Ray LaHood has ruled out raising gas taxes to make up for the funding shortfall, and the White House has rejected a mileage-based tax. They have not offered an alternative.

"The funding of the highway trust fund is a complex issue that will require consultation with Congress and consideration of a number of creative ideas," said Transportation Department spokeswoman Jill Zuckman. "The secretary looks forward to working with Chairman Oberstar and others as they consider how to keep the highway trust fund going."

A mileage-based tax has been unpopular in some states where it has been proposed. Critics say it unfairly penalizes drivers who live in rural areas and intrudes on privacy.

"When we can solve the equity issues to a majority's satisfaction in the Congress, when we can solve the privacy issues to the satisfaction of the American people, we can look at moving forward, but I just don't think we have the data or the experience right now to say we can set a timeline or a deadline," DeFazio said in a recent interview.

John Wayne Nation

Field Report: April’s Mileage-Based User Fee Conference in Austin Texas.

When I was nine I liked to poke a stick into ant nests I’d find in sidewalk cracks. Ants scattered in every conceivable direction. They ran in circles, they ran over and through each other. They screamed without logic. I was fascinated.

The state of the professional transportation opinion in the US today is pretty much the same. The stick poked at the nest in this case was the report released by the National Surface Transportation Infrastructure Finance Commission this February. The opening ant-scream was the spanking Obama’s Press Secretary Gibbs gave to Transportation Secretary Lahood. We professionals cringed in unison. Gibbs was in turn spanked next day by Congressman Oberstar, chair of the Transportation and Infrastructure Committee. We cheered. Of course the press went in every ant-direction imaginable for that and for the release of the NSTIFC’s Paying Our Way report 5 days later. Joe Motorist will have gleaned no real insight, and after fears were supplanted by next days’ tedious economic headlines will have simply forgotten, secure in the fact that opinion was sufficiently variable that no leader could possibly find a coherent position.

It seemed to me that in the weeks following the release of the report, US transportation professionals were – among friends – largely in favor of the key message in the report: “The gas-tax is a clever and simple idea whose time has run out and paying-for-use is the tax-shift to fix it.” We mocked Gibbs, commiserated with LaHood, and delighted in Oberstar’s defense – which had just vindicated all of us. On the whole we nodded in unison at the work of Rob Atkinson’s Congressional commission. Of course we would not all recommend spending the revenue the same way, but we all seemed aligned with the principles: meter all road use and pay according to number of miles traveled weighted by when and where the driving happened and of course by type of vehicle used.

With that in mind, I attended the April 14-15 Symposium on Mileage-Based User Fee, hosted in Austin by the Texas Transportation Institute’s University Transportation Center for Mobility, Hubert H. Humphrey Institute of Public Affairs, University of Minnesota, and Center for Transportation Studies, University of Minnesota. This would be about my 20th symposium dealing with Road Use Charging in five years.

I have come to view Road Use Charging symposia as prayer meetings. We preach to the Converted, whine about Congestion (you should see the pictures!), decry the free-road Infidels, mock the road-building Atheists, re-explain the evident Dogma of Adam Smith’s market economics, and await the messiah of Multimodal Commuting – led by transit and bicycles, of course.

So this time, I expected a real love-in. I foresaw the celebration of a tremendous breakthrough after, depending on one’s professional age, 10 to 40 years of economic argument for internalizing externalities, for transportation demand management (TDM), for correcting outmoded taxation and for resolution via a tax-shift. We were about to have our own little “Yes, We Can!” rally; we’d threaten to break out in song.

After celebrating, I was sure we’d set to work. How could we get started on the Commissions recommendations? What ideas did we have to implement their evident and clarifying direction? How could we help advise politicians who would be reeling from the shock of the unveiled truth? How could we ensure privacy protection? How could we educate? How could we make this affordable? How could we bridge such a massive change?

But that was not to be. Instead, I found ourselves to be 90 people with 90 opinions. I was told during Mayor Bloomberg’s congestion pricing scare that there were 8.3 million transportation experts living in New York City. I thought that couldn’t happen at a transportation conference.

While everyone seemed to agree that the Highway Trust Fund (HTF) was bankrupt – someone from the American Association of State Highway and Transportation Officials (AASHTO) stressed “flat-assed broke” – there were factions in every ant-direction about what to do about it.

The NSTIFC report called for a serious look at GPS-based VMT charging over the next HTF authorization cycle (commencing shortly). Some real investment and a detailed decision whether and how to deploy. It then recommended, assuming it turned out as they hope (the “least stinky option” as one of the Commissioners candidly noted), that the subsequent authorization cycle, six years on, would launch VMT charging so that 250 million American vehicles would have VMT meters by 2020 just like the Dutch will have had by 2016.

But only half of the Austin attendees agreed. 50% assumed the Commission was right and puzzled over how to do it. How should it be packaged for the public? How can we overcome the “privacy problem”, and the cost problem? Should the Fed lead or the States? (…now, that was a hot issue!)

Someone pointed out that Oregon invented the gas-tax in 1919 and by 1928 all the other states had followed, while the Fed took until 1932 to catch up, evidently proving the federal government cannot be responsive. So states that are running out of money fastest should jump-start this (which is already clearly threatening).

Another said we’d soon have a dozen non-interoperable VMT transponders, implying less enforceability, and drivers unable to see out of their cluttered windshield. Another repeated that the Fed is too busy with the economy, and that some states can’t wait. Another proposed a national payment clearinghouse framework that States could opt into. One humorist said we should fold the USDOT into the Department of Health to get the attention this needs.

And that was just one issue.

What we talked about most was trust – or the complete absence of it. Motorists do not trust GPS technology. Governments don not trust it to assure payment. Motorists do not trust that the government will spend the new money on transportation. Governments do not trust that the operating expense will be low enough. Some conference attendees did not trust the USDoT, others the State DoTs.

Then it was: Who’s on first? “Trucks are on first,” said several. “No way,” said a representative of the trucking industry, “there are easier ways to tax if we really need the money, he said, still not clear on the concept. “But no one will accept increased fuel taxes”, lamented someone else.

Is it just me or is this starting to read like the online comments to a road-pricing newspaper article?

It was evident that only three people in the room had read the Commission’s report including one of its authors. Here I was at a prayer meeting and we were arguing over every piece of TDM dogma known to the profession. I had never felt so adrift.

Someone said we need to legislate that location data cannot leave the vehicle except under the motorist’s control. Someone else said that a parent should be able to see where her teenager is. Someone reminded us (again) that privacy was the biggest elephant in the room, but another scoffed: “E-ZPass already keeps all your data.”

A representative of the AAA, who supports VMT charging(!), said: “We’re a John Wayne nation. It will be tough getting people to pay road taxes this way.”

Then the AASHTO speaker said something very sobering (numbers have that tendency). “The gas-tax currently funds 45% of the US surface transportation program requirements. We have three immediate choices (VMT charging is not immediate): we can [1] do nothing, [2] raise the gas-tax, or [3] take it out of the general fund – except there is nothing in the GF either.”

A Representative from Congress made an even more frightening point: “We cannot plan transportation in this country because next year’s transportation budget is set by last year’s gas-tax revenue. Since that is both uncertain and declining, we have no long-range planning guideline.”

Following this, another speaker made the point that if we priced electricity like we priced our roads, we’d have daily brown-outs which is effectively what traffic congestion is.

Then someone declared the biggest stinker: “We are funding a massive and critical system by taxing the very thing we want people to stop using. How stupid can we be?” And we are using less. We buy more efficient vehicles and are starting to drive fewer miles. The first victim of our fledgling green success story is our surface transportation system. [I recall my father’s favorite war story. A German U-Boat had sunk his merchant vessel. He and his shipmates all jumped into one of the lifeboats they were towing, but no one had a knife to cut the line! Tethering our transportation system to the gas-tax has the same effect.]

Someone pointed out that a one-sized VMT charge would be unfair to smaller vehicles. Another that the NSTIFC report said clearly that the fee should vary with vehicle type and size. One said: let’s just read odometers once a year, while another pointed out that many people could not cope with an annual lump-sum payment. The current average annual gas tax payment was reported to be about $240, so we’re talking three or four hundred dollars.

Wait a minute! Are you telling me this whole thing is all about a dollar per vehicle per day, i.e., about we spend per capita on tobacco each day?

Am I still just poking at ants on the sidewalk, here?

Fan Mail

The assumption that George Orwell’s time has arrived with VMT/TDP road pricing is especially visceral in the United States. I am accosted often and bluntly. Yesterday’s exchange with a new fan illustrates two things. Tolerance for tracking is near-zero and willingness to understand is there when explained.

Not one word has been altered in the following email conversation, except that my correspondent's name has been withheld.

Tonight I was in a bar with my best buddy, Malcolm, who, having recently been run over by an elderly lady in an SUV, was having a Guinness when my blackberry buzzed with a email from a satisfied reader of an article I had written for Roads and Bridges Magazine.

Mr. Grush – If you won’t admit that the eventual result of a GPS mileage system will be Orwellian monitoring of movement, you are either a fool or a liar. The U.S. State of Mississippi has recently outlawed ticket-writing red light cameras statewide. This is a very positive development that should be followed by more legislatures to stop the abusive implementation of technologies fostered by the political lobbying of companies that develop them. – K.N.

The perfect way to introduce oneself, I thought. Luckily this Canadian was born in Maryland and bullied in Pennsylvania, so I immediately appreciated the affection: “you are either a fool or a liar”.

Or a genius.

I shot back, certain that this would engender more affection.

The Third Reich and Soviet Union were full of geniuses led by very misguided people whom history has correctly judged very harshly. K. N.

I was right! My turn...

I'll bet you have a deep understanding of how GPS works, too. I suspect you watch a lot of telly. Seriously, Ken the technology is not what you imagine. It is anonymous. Unlike E-ZPass.

Then he started to go a bit soft.

Having graduated on the dean’s list from Georgia Tech and practiced engineering for thirty years, I do in fact have some understanding of technical matters. Running my own company has not left me much time for television. Your description of the anonymity of the system in the article may hold as originally implemented, but you can bet it will be manipulated by officeholders less well intentioned than yourself. My point is that technocrats tend to believe their creations can only be used for good purposes, but history has unfortunately shown otherwise. K.N.

Technocrat?! Now I’m insulted.

Then they will have to use a different device. Mine does not allow position data to exit the device.

Then he really starts losing it. What a spoiler!

Then let us hope if we are to be burdened with this that your device wins the bid and keeps the business in perpetuity. If after a few years one of your competitors underbids you, or sells some politician on their device which may not be so benign, let us hope we can resist them. K.H.

Next thing, he'll want to work at my company. This thing is going too far!

Thank you. I accept that as a blessing. Search "privacy" at www.grushhour.com. You will see I lobby for legislation that forbids location data to exit the vehicle. If you go back to the beginning you will see it was not always so. I have come to this only in the last year. e.g., see skymetercorp.com > Media > Archive and find Data Protection Act. I have since recanted.

The first time data from my system is used for harm, I'd be out of business. Oddly, your privacy is more important to me than it is to you. One mistake and I am exposed to serious and inescapable criticism.

BTW I was asked to build an ankle bracelet for prisoners about 3 years. I refused because I did not want to seen tracking anything. Ever.

I have not seen the article. Is it online?

Finally, he gives up all semblance of healthy disgust.

I am glad to hear you share my concern. The article was referenced in the NSPE email newsletter which aggregates articles from the technical press. Here is the article, and have a good evening:

Squeezing Tolls From Error Bars
Transportation Management & Engineering (04/09) Vol. 14, No. 2, P. 8; Grush, Bern

The tolling of wide areas such as regions, states or continents will be facilitated by a new vehicle-miles-traveled technology founded on processing innovations in vehicle positioning using Global Navigation Satellite Systems (GNSS/GPS). Some jurisdictions already have electronic road tolling technologies implemented including various radio-frequency identification (RFID) or dedicated short-range communications (DSRC) radio technologies, but not all of these systems boast interoperability. GPS signals are free, openly available and de facto standardized, which means that the opportunity for interoperability among toll-payment service providers can be concentrated on road-use metering standards, privacy standards and payment data exchange among metering providers, payment service providers and toll operators rather than interoperability among proprietary equipment providers. By focusing on road-use metering standards, costs can be reduced, operations can become more flexible, extensibility can be eased, and service acquisition and motorist-oriented services and transportation policies can be broadened. Transport authorities starting to toll wide areas using GNSS/GPS technology will face the temporary issue of interoperating between existing DSRC/RFID facilities with long-term management contracts and the more flexible GNSS-based time, distance and place systems. A high-resolution, GIS-based pricing grid overlaying an entire region can serve as an interim solution, and every component of this grid would be assigned a fee for passage through it and an owner or government entity that would receive the fee. Establishing this service only requires an accurate digital map of the facility to be tolled, the toll anticipated for each road segment, any time-of-day differences in charges and a collection, payment and audit agreement with each participating toll agency.

[more] http://www.roadsbridges.com/Squeezing-tolls-from-error-bars-article10268

Vehicle Type Underemphasized in NSTIFC report

The National Surface Transportation Infrastructure Financing Commission (NSTIFC) unnecessarily left themselves open to criticism regarding "one-fee for all vehicles". Leaving vehicle type addressed only in the fine print, many critics made the blunt assumption of a uniform fee regardless of vehicle size, arguing that this would encourage the purchase of large SUVs.

The report does state on page 77: “[Vehicle sales tax] rates could vary to encourage/discourage purchase of different types of vehicles]”; on page 91 Mileage Based User Fees (VMT fees) could be “based on user choice considerations such as … “type and weight of the vehicle, and vehicle emission levels; “type of vehicle” is again mentioned as a mile-based pricing variable on pages 127, 128, 183, 201. So the public criticism is largely because the document enjoys fewer readers than critics and partly because of the report’s emphasis on miles traveled and a lesser emphasis on when, where and what is driven.

There is no need to apply a flat fee, which would indeed make a VMT tax unfair to smaller vehicles and the environment. Unless vehicle type is included with time of trip, distance of trip and place of trip, we will have to leave the fuel tax intact, which will make the application of nationwide road pricing far more difficult politically. Worse, it will not address congestion.

Dr. Gilles Duranton, Economist at the University of Toronto, argues:

“While fuel taxes are not appropriate to deal with congestion or road financing, they are appropriate to deal with carbon emissions and particulates. The external cost of particulates is seemingly much higher than that of carbon emissions (see Parry et al in the Journal of Economic Literature). Those external effects are not related to occupying space on the road but instead caused by releasing pollutants into the atmosphere. How much should a carbon tax on gas be? At a guess, if we think the level of carbon taxation is $50 per ton, this means about 5c per liter. With particulates being more costly to society, we could reach a level of say 20c per liter, which is roughly average gas tax in the US, now. Such a gas tax would be still lower than what we observe everywhere in the developed world.”

While I agree fully with this point, I disagree with an at-the-pump implementation. Isolating a carbon tax on fuel consumption by keeping it hidden at the pump extends the current problem, dilutes the signaling power of VMT pricing, and contradicts some of what the VMT thought-leadership has gained (re shift away from gas-tax). We want to maximize use-signals. But the carbon problem means gas should always have a tax greater than a sales tax. We want fuel tax to become a "sin" tax and no longer a road-tax, which is the point of the NSTIFC work. As a sin tax, it discourages use of the internal combustion engine, while VMT pricing makes road finance sustainable while discouraging congestion.

The VMT party line is that VMT pricing will have a vehicle-type component, and we can reflect the carbon tax in that component, giving us louder signals re congestion. Why? Because (1) the vehicle-type component, IF IT IS SHOWN on the road-use bill, "43% of your road-use bill this month is because you drive a type 6 vehicle” will be more visible; (2) it catches the incremental problem of the internal combustion engine which is exacerbated by congestion (fuel tax at the pump does not catch that, and if it partly does it is not noticed); and (3) taxing this way amplifies my understanding of my driving decisions (spreading and hiding taxes dilutes the social value of taxation).

Of course, I am describing the perfect world, and easy hiding of the tax at the pump may stay as the reality, unfortunately. In either case, the vehicle-type tax-portion will affect ever fewer vehicles as we switch to new energy sources, but a vehicle-type pricing component to VMT pricing will be VISIBLE instead of invisible as the gas-tax is now.

Training Pants for the 21st Century Motorist

Matt Rosenberg, senior fellow at Cascadia Center of the Discovery Institute, wrote a handsome argument for public-private partnerships (PPP) to put us out of our surface transport congestion-funding-emission misery.

Because I am a full-network, Road Use Charging (RUC) advocate (pay every mile driven and end the fuel tax), I prefer to rush headlong into the user-pay world with the revenue split in some network-optimizing way between road and transit financing. So I have long thought that PPPs are simply an interim measure because slow-grinding governments are stuck with a failing (failed!) finance model. I have long assumed that if they could fix that (I am an optimist!) P3s would not be necessary.

Matt’s first conclusion – better management offsets higher private debt costs and the extraction of profit – suggests P3 may be plainly a better model from a total cost of ownership perspective. I accept that. His second conclusion – building sooner brings earlier congestion and emission reduction and earlier restoration of productivity – needs two caveats. First pricing has to be right and shadow-tolls must not be permitted. Second, state and federal programs to move toward full network pricing must continue, otherwise, congestion abatement due to P3 activities will be transient since improved congestion circumstances invites new demand. The Matt Rosenberg article “How to pay for the roads still traveled” makes that point between the lines.

The real reason I prefer P3 investment is that this brings us tolled roads. These train the entitled motorist to see that roads are not free. The more tolled roads we have now, the easier the inevitable tax-shift from fuel-tax to VMT pricing will become.

Long an admirer of past USDOT Secretary Mary Peters, I learned from her that tolled lanes are “…a stepping stone to get people acclimated to paying a fee for use of a section of roadway…” (She was talking about HOT lanes at Brookings in April 2008. Get the video and transcript links here.)

So while the new roads that P3 programs give us may have immediate and visible motoring benefits, they are the training pants for the real surface transportation market of the 21st century.

Road Pricing for Transit Advocates

Very quick-moving overview from perspective of road tolling for transit advocates from a grass-roots forum some months back... Covers a lot in a 3 minute speed-read.

An overview of economics of road tolling from an information perspective and how the technology works.