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From The Editor

Calvert Institute for Policy Research
Montgomery College, Germantown MD
October 7, 2002

Market Approaches - Local Applications
Presentation By C. Kenneth Orski

Peter Samuel has given you an excellent introduction to “Principles of Market-Based Approaches to Transportation 101" My intent is to follow up with a description of four proposed local applications of this principle. I stress the word “proposed” because market-based transportation solutions are still met with considerable skepticism and encounter political opposition in this region, as will become clear from my presentation.

1. The Intercounty Connector (ICC)
My first example of a market-based approach was a proposal by the so-called “Transportation Solutions Group” concerning the Inter County Connector. The Group, convened by Governor Glendening in 1999, on which I had the pleasure of serving at Governor’s invitation, was charged with the task of coming up with a strategy to improve mobility and relieve traffic congestion in the metropolitan Washington region. The Group voted to recommend construction of the ICC. However, a majority of us felt that if the facility was to provide a high level of service well into the future, it must be operated as a toll facility, using variable pricing to control demand and ensure free-flowing traffic at all times. The technology to do this exists. On California's Interstate 15, north of San Diego, an electronic system automatically raises and lowers tolls according to congestion levels in the toll lanes, informs motorists of the current toll, and bills users remotely without requiring them to stop at a toll booth. Using this approach, I-15 HOT lanes have been able to maintain free flowing traffic even at the height of the rush hour.

Our Group felt that a variably priced ICC would be politically acceptable, provided travelers felt they received tangible value for their money- as they would - in the form of faster, more predictable travel. Shippers and deliverers of time-sensitive merchandise such as UPS and FedEx, also would receive added value in the form of faster and more reliable deliveries. And, of course, the ICC could serve as a transitway for Bus Rapid Transit service between the busy Rockville Pike/I-270 corridors and points east, including the BWI Airport.

While some equity concerns were expressed, the Group found them to be unjustified. Surveys in California have shown that people of all income levels choose to use California’s HOT lanes when saving time is really important to them. And that includes a lot of ordinary people : workers whose job depends on always being on time, travelers anxious not to miss a flight, and businesses that depend on just-in-time deliveries. Indeed, a utility van and a delivery truck are a far more common sight on California’s HOT lanes than the proverbial Lexus.

Despite these arguments, Governor Glendening, as you may recall, rejected our recommendations and chose not to proceed with construction of the ICC. I don’t think the Governor has had the last word, however. The ICC is still very much on the agenda, now that its opponents on the Montgomery Council have been soundly defeated and our County Executive and both candidates for the governorship have declared their support for the project. The ICC, I venture to predict, will eventually be built. Whether it will be built as a toll facility, remains to be seen.

2. Tolling the Wilson Bridge
The second example of a market-based approach to transportation was a proposal to impose tolls on the reconstructed Wilson Bridge. In an OpEd piece in the Washington Post, my colleague, Peter Samuel and I suggested that variable tolls could help to control congestion on approaches to the bridge, as well as help with the funding problem. Tolls could be collected at highway speeds using Smart Tags similar to those already in use on the Dulles Toll Road.

We pointed out that all comparable major new crossings elsewhere in the US are being financed with tolls, such as the Tacoma Narrows Bridge in Washington state, the reconstruction of the Bay Bridge in the San Francisco Bay Area, and the planned new Tappan Zee Bridge in New York. More to the point, several crossings in the I-95 corridor to the north of the Wilson Bridge are toll facilities. They include the Fort McHenry tunnel in Baltimore, the Delaware River Bridge and the George Washington Bridge.

We argued that tolls are the fairest way of funding the new bridge since they would place the fiscal burden on its users, rather than on taxpayers at large. But our proposal, need I say, went nowhere.

3. Maryland DOT Study of a HOT Lane Network
The third example of a proposed market-based approach to transportation in our region was the 1999 study of variable pricing by the Maryland Department of Transportation (MDOT). The aim of the study was to determine if variable pricing would be an appropriate means of managing congestion in the Washington/ Baltimore region. MDOT identified several heavily traveled congested corridors as potential elements of a future regional HOT lane network. The study included I-270, I-495 (The Beltway), MD 210, US 50, I-95 (north and south of Baltimore), Chesapeake Bay Bridge and the three Baltimore Harbor Crossings.

In June 2001, Gov. Glendening suddenly pulled the rug out from under his own state transportation secretary and summarily cancelled the plan to introduce a HOT lane on the recently widened Route 50. He cast his objection as an equity issue, saying it would be unfair to allow affluent drivers to buy their way out of congestion. In an OpEd piece in USA Today, the Governor explained his position as follows (and I quote):

"It is fundamentally unfair to give wealthy people the opportunity to buy a faster commute... Why should a lawyer or lobbyist commuting to Washington, D.C., get to work faster than an entry-level employee, simply because the lawyer or lobbyist can bill the extra $1,000 to $2,000 yearly cost to clients? An easy commute should not be linked to a person's ability to pay.”

The Governor chose to ignore the fact that it isn’t just rich lobbyists who understand the value of time. As already mentioned, surveys in California show that people of all income levels elect to use the HOT lanes when they need to get somewhere faster. A parent racing to get to a daycare center before closing time, would be just as grateful to pay the toll and save himself/herself the late dollar-a-minute penalty as a lawyer racing to make a court appearance. Besides, if a HOT lane reduces congestion in the free lanes, wouldn't everybody be better off?

4. Fluor Daniel Proposal for HOT Lanes on the Beltway
My final example of a proposed market-based approach to transportation is the recent proposal by Fluor Daniel, one of the world's largest engineering and construction companies, to widen the Beltway between the Springfield Interchange and the American Legion Bridge with four HOT lanes, two in each direction . The project would be financed privately, with bonds underwritten by HOT lane revenue. It would use no public funds at all.
The proposal received editorial support of the Washington Post but local and state officials reacted “cautiously” according to press reports.


So there, you have it. As I think my presentation made clear, there exist plenty of opportunities in our region to apply market-based approaches to congestion mitigation. The know-how and technology to implement these approaches exists. What’s lacking is the political will. I hope meetings like this, with local elected officials and candidates for office present in the audience, will help to change attitudes and galvanize the necessary political support to experiment with transportation pricing.


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