Urban Returns

"No road we built in Texas paid for itself."

From Streetsblog Capitol Hill:

Over the past two days at the Congress for the New Urbanism Project for Transportation Reform conference, attendees have called for reform at local, regional, and national levels. In a panel debate about the future of transportation funding and the role of regional planning through MPOs, several speakers argued that the foundation of transportation and development funding had to be systematically overhauled.

Mike Krusee, [AC: former] chairman of the Texas House of Representatives Transportation Committee, said that financial problems were more significant than environmental, though they should be tied together in the same discussion.

"The reason there's not a new transportation bill is because there is no money. We've hit the wall of unsustainability on how we finance the transportation system," he said.

Krusee asserted it was urgent and necessary to understand the nature of this broken financial apparatus and to develop solutions to fix it. In Texas, he said that, on average, it cost the state 20-30 cents per person per mile to build and maintain a road to the suburbs, yet drivers only pay on average 2-3 cents per mile through the gas tax, vehicles fees, etc.

"What we found was that no road that we built in Texas paid for itself," said Krusee. "None."

The expense to build roads and utilities further and further from the urban cores not only drove costs to unsustainable levels, it created an imbalance in who paid for growth. Over the past 50 years, Krusee argued, the federal government used tax money that came by and large from cities to subsidize roads to areas without access otherwise.

"City dwellers have subsidized the land purchases and the development costs out in the suburbs," said Krusee. What's more, the gas tax, which city dwellers pay when driving on city roads, but which goes to freeways largely outside of urban cores, is "a huge transfer of wealth from the cities to the suburbs to build these rings."

Krusee said building the interstate system was initially a good thing, because if facilitated interstate commerce and increased the productivity of cities. Now however, because of congestion caused by ever longer commute patterns, system productivity is in peril. "What's happened is the federal government has basically reneged on the deal. By subsidizing highways out to the suburbs, it's no longer efficient for truck traffic, for goods and services and people to move between cities in the United States because those roads have been hijacked by all the commuters."

Krusee, by the way, represented suburban Williamson County.

Krusee's assessment matches TxDOT's own internal assessment.  (This actually should be no surprise since Krusee's committee relied on TxDOT for data.)   TxDOT, for example, concluded that the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes -- just 16% of the total cost.

Some of us get swept up in the rhetoric sometimes, but roads aren't unmitigated evils.   Obviously, we need roads.  Just as obviously, I think, we will continue to need new roads.   But new roads should be built only where drivers are willing to pay for the new capacity.   And the only way to gauge that demand is to price existing roads properly; the revenue they generate will tell us when it is time to add to add that capacity.

Cross-posted at Austin Contrarian. Comments there.

TTI hyperbole

There is no question that congestion is a serious problem in this country -- and a crippling problem in some cities.  Nor is there any question that congestion is much worse than it was ten years ago, even if high gas prices and the recession have caused it to level off in some places.

But the Texas Transportation Institute is guilty of a bit of hyperbole when it announces that "[t]he overall cost [of congestion](based on wasted fuel and lost productivity) reached $87.2 billion in 2007 – more than $750 for every U.S. traveler."

TTI uses free-flow traffic as its baseline for measuring congestion.  In particular, it defines "Delay per Peak Traveler" to be "[t]he extra time spent traveling at congested speeds rather than free-flow speeds divided by the number of persons making a trip during the peak period." (Summary report p.1)

Honestly, free-flow speed is not the optimum baseline.  There is no realistic, hypothetical state of the world in which we would experience perfect, free-flow traffic everywhere.   It would not be feasible to build enough roads (or charge enough for them), particularly since free-flow speeds would entice more drivers onto the road.   So to imply that there is $87 billion of waste to be saved -- and I think TTI does imply this -- is simply wrong

Anthony Downs makes this point in Still Stuck in Traffic, pp. 23-24 (available on-line at Google Books).   He makes several other reasonable criticisms of TTI's methodology.   He nevertheless recognizes that  TTI's methodology and findings are useful, and he does not dispute (nor do I) that congestion is a serious problem that we can't simply build our way out of.

Back and forth

It never surprises me to hear suburban commuters bash congestion tolls.  But I am surprised when a sophisticated transit blogger bashes them.  Yonah Freemark, who writes the very good the transport politic, is the guilty party.  He and Ryan Avent have been going back and forth and back again.  

Yonah's objection is equity:

A huge percentage of the U.S. population pays far too much for transportation; to put it simply, most working adults have no choice other than to own a vehicle and often to drive it dozens of miles every day. Making driving more expensive is a great way to devastate the already impoverished.

It’s true, tolling highways would save “money, time, lives, and emissions.” But it would also sacrifice the mobility of a large segment of America, because the reduced congestion would be a result of the poor and the middle class choosing not to drive because of expense, not because of choices made by the wealthy.

He argues that our public transit systems are too underdeveloped in most places to cure this inequity.

Ryan responds with several good points, but I want to elaborate on why the regressivity argument leaves me cold.

First, congestion tolls are less regressive than toll opponents claims.   The low-income do pay tolls, which means they value the time savings more than the price of the toll.   Plenty of low-income drivers take the toll lanes on SR 91 in California, for example.  The reason many do is that they have little flexibility in their schedules.  They have to be at work or at the daycare center at a specific time.  To compensate for congestion, they must leave much earlier to guarantee a timely arrival.  They thus suffer two types of costs:  scheduling delays and travel delays.  (The value of scheduling delays is very hard to measure, which means that studies like the TTI report almost surely understate the cost of congestion.)  Affluent professionals often have more flexibility.

Second, tolls encourage a number of shifts.  Yes, shifts to transit, which seems to be Yonah's main concern, at least when the transit system is underdeveloped.  But they encourage other shifts, too.  Shifts to other routes and shifts to other times.   Commuters are the least likely to be nudged to other routes or times.  The most sensitive are those who use congested roads for local trips.  Take the soccer mom who hops in the SUV and enters a congested highway to get to the grocery store a mile down the road.  She imposes enormous costs on others.  Tolls make her internalize those costs and nudge her to use the local streets. 

Perhaps this is regressive.  But it doesn't evoke much sympathy from me.  A congestion toll is a charge for getting in everyone else's way.   Behind every claim of regressivity is the assumption that drivers are entitled to get in everyone else's way even when it is not worth all that much to them. 

And that leads to my last point.  The regressivity argument wouldn't move me even if it were true. This is one of those cases in which our desire for efficiency should trump our concern with regressivity.

Here's an apt analogy.  An amusement park owner decides to throw open the gate to all comers on a first-come, first-serve.  Naturally, a long line forms.  But this isn't a typical line where newcomers go to the back of the line.  No, in this queue, newcomers elbow their way to the front of the line and force everyone behind them to wait a little longer.  

Naturally, chaos ensues.  No one leaves for the park knowing how long it will take to get in.   There is "queue rage" and general aggravation.  The park owner loses business.  And many low-income parents find themselves worse off because they have a smaller window of free time and dislike the chaos and aggravation as much as anyone else.  (I've always thought it patronizing to assume that low-income drivers put such a low value on their time and aggravation.)

Now, in the real world, the queue would never work this way.  Those at the rear of the line would use informal sanctions (fist fights) to deter queue jumpers.  And, in fact, there would be only a short  line to get into the park in the first place because the owner would charge for admission.

But this is exactly the crazy system we use to ration highway access.  For whatever reason, our cultural norms have evolved to tolerate a free-for-all.  In almost every other situation we ration scarce goods using price.  Sure, that's regressive in the sense that the poor have less money to spend on things.  But we tolerate some regressivity elsewhere because we recognize that (1) the gains in efficiency outweigh the equity concerns; and (2) there are better ways to ensure an egalitarian distribution of wealth than creating artificial shortages, chaos and mayhem.

Regressivity is not the be all and end all.

Punching above its class

The Texas Transportation Institute has issued its annual report on congestion in American cities.  As usual, Austin doesn't do well, punching well above its class.  Tthe average Austin traveler experienced an annual delay of 39 hours in 2007.    That's up from 32 hours in 1997, although no worse than 2006.   

Ryan Avent puts the Austin figures in perspective:

The average traveler in the New York metro area faces 44 hours wasted per year, for instance, while the average traveler in Los Angeles loses 70 hours per year to congestion, even though New York’s metropolitan population is much, much larger than LA’s.  More interesting still, Austin and Raleigh aren’t that far behind New York with 39 and 34 hours wasted annually, despite the fact that both metro areas have less than two million people while greater New York is home to 20 million people.

TTI also calculates the percent of peak period travel that is congested.   Austin again fares poorly -- its roads are congested for 70% of the peak travel period: 

By comparison, Dallas's roads are congested for only 66% of the peak travel period.  Houston is marginally worse at 73%.   Austin's peers include New York (69%), Detroit (71%) and Baltimore (69%).  

One has to wonder what damage Austin's congestion has wrought to downtown.   Businesses want to locate where their employees can get to them, and high peak-period congestion means that commuters must fight traffic to get to work most of the time.   I suspect Austin's downtown suffers more heavily from peak-period congestion than any other employment center in the area since MoPac and I-35 -- the principal commuter routes to downtown -- are the two most congested roads in the area.     Eventually we must recognize that our congestion will  stunt downtown's growth.   We wil lose the economies of scale and agglomeration benefits that a vibrant downtown would  yield.

You know, of course, that there is only one solution.

$160 per trip

That's the social cost that Charles Kamonoff, an NYC environmental/transportation analysist, believes each driver who enters Manhattan's central business district imposes on other drivers.  Via Felix Salmon: 

After crunching the numbers, he calculates that on a weekday, the average car driven into Manhattan south of 60th Street causes a total of 3.26 hours of delays to everybody else. (At weekends, the equivalent number is just over 2 hours.) No one car is likely to suffer excess delays of more than a few seconds, of course, but if you add up all those seconds for the thousands of affected cars and trucks, it comes to a significant amount of time.

Many of those hours are very valuable things, especially when you consider big trucks, staffed with two or three professionals, just idling in traffic. Komanoff calculates (check out the “Value of Time” tab) that the average vehicle has 1.97 people in it, and that the average value of an hour of saved vehicle time south of 60th Street in Manhattan on a weekday is $48.89. Which means, basically, that driving a car into Manhattan on a weekday causes about $160 of negative externalities to everybody else.

I can't vouch for Komanoff's numbers or his methodology. Given the sheer complexity of the traffic dynamics in Manhattan -- which are much more complicated than the traffic dynamics of a single highway -- I would treat his estimate skeptically.

That said, his estimate doesn't seem outrageously high to me. The basic point is sound:  we severely underestimate how many people we delay when we enter a congested network of roads.  If you've ever tried to make the trip crosstown Manhattan in the middle of the day, you understand just how much delay one driver can cause.

Komanoff recommends congestion pricing.  A good idea.  But he also proposes making buses free, which is a bad idea (and one floated in Austin occasionally). 

One problem is that a free bus would be a magnet for the homeless looking for a cool place to hang out.  That sounds callous, I know, and perhaps it is, but in that case you'd never see a large switch from cars to buses, so what would be the point?

The other problem is that both bus and rail can be congested, too.  If you've ever taken a packed No. 3 around ACL, you understand this perfectly well.  There is a cost to standing up on a jerky bus for 20 minutes, squeezed in among a bunch of strangers who may or may not practice good hygiene.  This is a genuine cost of congestion.  In fact, it is probably too high a cost for most of the drivers around here, who would much rather be stuck in traffic in a cool, comfortable car.

If we price roads but not buses or trains, then the buses or trains will be too crowded (at least in Manhattan and DC, if not in Austin) and we simply will have shifted the cost of externalities from drivers to bus and train riders.  This certainly does not mean that buses and trains must pay their own way.  But it does mean pricing them with the interests of both drivers and non-drivers in mind.

McBlogger, I don't get it

McBlogger and I disagree down the line on tolls.

I understand his and many others' opposition to tolling existing, free roads and to the privatization of our highways, but these arguments against tolling new roads just don't make any sense:

Telling people not to use toll roads if they don't want to and then building them is almost like telling people not to breathe if they don't want to. They are going to be hurt.

Why? Because we all will be paying toll road TAXES even if we "don't use them".

How? We will pay the extra tolls at the cash register when we purchase goods and services because businesses will divert their toll costs onto the consumer. It's common-sense.

I don't think it's commonsense at all.  Commonsense tells us that businesses won't incur costs for new toll roads.  At worst, no one will use the toll roads, and businesses will face exactly the same costs as before.  New roads can hurt existing businesses by blocking access or diverting customers to other, now more convenient locations.  But this is a side effect of new roads, too, and it isn't McBlogger's complaint anyway.

In addition, toll roads are long-term debts that our children's grandchildren will continue to pay.

True, if the tolls don't cover all of the long-term debt.  But free roads incur larger long-term debt because the public has to cover all of the cost.  If we're worried about our great-grandchildren, we should toll all roads.

Lastly, if you think toll roads are the panacea for all our roadway, traffic and pollution ills, you are grossly mistaken. Just look at the long-time toll roads in tolling meccas like CA, NY, FL, etc., and you will see that not only do they still have the same issues and problems, but new ones have been created directly due to the building and maintenance of toll roads and plazas.

Toll roads don't have to be a panacea for congestion and pollution; they just have to be better than free roads.  They are. 

He also complains about the use of Eminent Domain and providing "wealthy special interests" more avenues for profiting at our expense.  But Eminent Domain is a problem with free roads, too.

 I assume "wealthy special interests" means private consortiums like Cintra-Zachry.  But this is an objection to road privatization, not tolls.  And free roads benefit "wealthy special interests," too -- property owners who benefit from better access.

In the long run, property owners capture all of the benefits of free roads.  Tolls shrink that benefit.  So what's the problem?

Equal protection for truckers

I've argued before that even if we don't congestion price I-35 for all drivers,  we should at least price the road for truckers, which will give them the incentive to take SH 130.   Some have suggested that we simply require through truckers to detour to SH 130.  Atlanta apparently does something like this.

Ben Wear put the notion of an outright ban to Carlos Lopez, the new district engineer for TxDOT's Austin division.  And I'm having trouble believing the answer.

Given all the big rigs clogging Interstate 35 through Austin and the really light traffic on the Texas 130/Texas 45 Southeast tollway loop, can't TxDOT just require trucks to use the tollways?

According to Lopez, there's no state or federal statute that says TxDOT can't do that. On the other hand, there's no state statute saying specifically that it can. Which would seem to leave the way open for something of that order to occur, assuming that the Legislature (over what would likely be fierce opposition from the trucking industry) decided to pass a law like that.

However, TxDOT lawyers say such a statute would probably run afoul of the equal protection clause of the 14th Amendment to the U.S. Constitution. That clause says that no state shall "deny to any person within its jurisdiction the equal protection of the laws."

Truckers could make the argument that making them pay to pass through the Austin area while letting everyone else drive free would violate that clause.

Now I admit I haven't done any legal research here.  But I'm pretty confident truckers won't have an equal protection claim.  Laws treat people differently all the time.  That's the essence of law.  The courts have understood this for a long, long time, and therefore have limited equal protection challenges to laws based on a suspect classification like race or a quasi-suspect classification like sex.  Hence a law that discriminates between whites and African Americans will violate African Americans' right to equal protection unless the law is narrowly tailored to serve a compelling government interest and there is no other way for the government to accomplish this compelling interest.  This is an essentially impossible standard to meet.  Off the top of my head, I can't name any instances approved by the courts.   Quasi-suspect classifications -- those based on sex, for example -- are not subject to quite as demanding an analsyis, but court treat these skeptically, too.

But if a law does not discriminate on the basis of a suspect classification, then  courts will uphold the law as long as it is "rationally related" to a legitimate government interest.  This is con-law speak for, "Congress [or state], do whatever you want to do."  

Truckers are not a suspect classification.  We impose all kinds of unique regulations on them.  The Texas Legislature or any other government can treat truckers differently than ordinary drivers as long as the rules have a rational basis.  

The basis for a ban here is obvious and sensible.  Trucks cause more congestion than cars.  They take up at least twice as much space, and they stop and start more slowly.  Moving the tractor-trailers to another road would ease congestion.  The state has a legitimate interest in clearing congesiton.  Truckers are the most logical place to start. 

The truckers' better objection is practical rather than legal.  As Lopez points out, many trucks are not passing through.  We want trucks making local deliveries to use  efficient routes, including I-35 when necessary.  But this means our ban would have to distinguish between local traffic and through traffic.  I'm not sure how the highway patrol could enforce that.  

The best solution, of course, is to charge truckers to drive on I-35.  Through trucks would have the incentive to switch to SH 130.  Locals would not.  We'd get the optimal result with minimal enforcement costs.  Funny how prices work.

SH 130 vs I-35: early returns

Ben Wear and a colleague have run another experiment comparing SH 130 to I-35.  The trip around Austin on SH 130 was 22 minutes faster than the trip straight through town on I-35.  This even though I-35 was not particularly congested during their experiment.  Wear averaged 70 mph on SH 130; his colleague, 50 mph.  (I-35 was nine minutes faster in the first experiment, but this was before SH 130 had been linked to I-35 via a limited-access highway.) 

I admit I'm surprised SH 130 was so much faster.  But I am not surprised by this:

Texas 130, so far, is falling short, revenue-wise, of what were already modest expectations from TxDOT.  For the six months ending Feb. 28 , revenue for the road was $1.6 million.  That's about 12 percent under expectations.  Traffic, however, is nearly 18 percent above projections.

The relative absence of 18-wheelers, which pay four times what a car does, could partially explain that anomaly.  I have seen very few of them on my three rush-hour trips on Texas 130.  I-35, on the other hand, as anyone who drives it knows, remains choked with big rigs.  Andrea's passenger counted more than 225 on I-35 during their drive; I saw less than a dozen.

Most truckers apparently don't think the time-versus-money tradeoff is worth it.

TxDOT is charging truckers too much money to save too little time.  Truckers have to pay $25 in tolls and an extra $12 or so in diesel to save 22 minutes, which means truckers must value their time at more than $100 per hour to make the switch.  They obviously do not.  And so I-35 continues to be clogged with big rigs while SH 130's faster lanes remain virtually truck-free.

Under a rational congestion-pricing system, drivers are charged for causing congestion, not for avoiding congestion.  TxDOT's pricing system is the precise opposite.

  

Hutchison misses the point

Frequent commenter trza pointed me to this op-ed by Kay Bailey Hutchison in Thursday's San Antonio Express-News.

Tolls are unpopular, I know, and she's running for governor, but this is particularly discouraging:

Recently, there have been renewed calls for tolls on highways that have already been built and paid for with federal tax dollars. I believe taxing Americans twice for the same asset is fundamentally unfair, and I oppose any effort to place tolls on existing interstate highways.

Gas taxes do not cover the cost of roads. But I understand the fairness argument.  Suburbanites invested in their homes on the assumption they'd have a free ride (or drive); charging tolls changes the rules.  Perhaps worse, the state doesn't want to toll all existing roads, only some of them.  Tolling my road but not yours seems arbitrary.

Do roads pay for themselves?

A major feature in the public debate about toll roads has been the issue of when or whether a road has been “paid for.” To better understand this discussion, it is helpful to ask two questions:

1. What is a traveler paying for when he or she pays state gas tax at the pump?

State motor fuel tax is collected from all over the state and goes into a single pool of revenue—about one quarter of which goes to fund education, and about three-quarters of which goes to the state’s highway fund, where it is spent on transportation uses and some non-transportation functions of government.

Then the state receives federal funds as the state’s share of the federal fuel tax; about 70 cents of every gas tax dollar Texans send to Washington comes back for road use.

The significant point here is that historically the fuel tax paid in any locality of the state is unrelated to the road projects in that locality. Every fuel taxpayer in the state paid something for any given road—which leads to the next issue.

2. When is a given road actually “paid for?”

Just like your car, it never is. You may have paid the note, but maintenance and fuel costs go on as long as you own the vehicle. Once a road is built, maintenance and rehabilitation costs last its entire life, generally about 40 years.

The decision to build a road is a permanent commitment to the traveling public. Not only will a road be built, but it must also be routinely maintained and reconstructed when necessary, meaning no road is ever truly “paid for.”

Until recently, when TxDOT built or expanded a road, no methodology existed to determine the extent to which this work would be paid off through revenues.

The Asset Value Index, was developed to compare the full 40-year life-cycle costs to the revenues attributable to a given road corridor or section. The shorthand version calculates how much gasoline is consumed on a roadway and how much gas tax revenue that generates.
The Asset Value Index is the ratio of the total expected revenues divided by the total expected costs. If the ratio is 0.60, the road will produce revenues to meet 60 percent of its costs; it would be “paid for” only if the ratio were 1.00, when the revenues met 100 percent of costs. Another way of describing this is to do a “tax gap” analysis, which shows how much the state fuel tax would have to be on that given corridor for the ratio for revenues to match costs.

Applying this methodology, revealed that no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon.

This is just one example, but there is not one road in Texas that pays for itself based on the tax system of today. Some roads pay for about half their true cost, but most roads we have analyzed pay for considerably less.

To conclude, in the SH 99 example, since the traffic volume for that road doesn't generate enough fuel tax revenue to pay for it, revenues from other parts of the state must be used to build and maintain this corridor segment. The same is true across the state, meaning that, as revealed by the tax gap analysis, overall revenues are not sufficient to meet the state’s transportation needs.

That's from TxDOT itself.  Since few Texas drivers are willing to pay $2.22 in taxes per gallon, this begets the question, Why does TxDOT continue to build roads that no one is willing to pay for?

TxDOT is pushing tolls, of course; its implicit contention is that drivers are willing to pay for roads through tolls.  

A large chunk of the population hates tolls and believes TxDOT consists of a bunch of rotten, dirty liers.  They will dismiss this analysis out of hand.

But if it's wrong, why?