The political calculus of congestion pricing

There's a good article here by some UCLA urban planning professors on congestion pricing.  They argue that congestion pricing has structural political barriers that cannot be surmounted merely by pointing out that it is economically efficient:

Policymaker's great sin of omission -- their failure to price the roads -- is not the result of senseless intransigence, or of their inability to "get it."  Congestion pricing looks good only from an economic perspective.  Politically it looks risky and potentially disastrous.  We cannot assume that people will vote for congestion pricing simply [because] it is economically efficient.  The solution is not to make drivers want congestion pricing.  Good ideas require advocates, and successful advocates are rarely those who pay the costs.  Only the prospect of significant rewards will create strong advocates.  Most discussions of congestion pricing's political acceptability revolve around using the toll revenue to buy the acquiescence of drivers, but acquiescence will not generate strong political support, and it is in any event highly unlikely.

. . .

We contend that the toll revenue should be earmarked for cities, preferably the cities that are penetrated by the freeways.  Cities are well organized and large enough to be powerful, but small enough to engineer consensus among their constituents about how to spend the money.  The toll revenue can advance both environmental and equity goals, provided these goals do not undermine the political incentives for local governments to pursue congestion pricing.

I think they're probably right about the politics.  Imagine if Austin were allowed to capture the revenue from congestion pricing I-35.  Our city council (any city council) would be all over that -- a 25% or more budget increase, for free.

It's not like congestion tolls have to be spent for a specific purpose.  Tolls used to finance construction (SH 130, 183A) are dedicated to retiring construction debt.  But congestion-toll revenue reflects the cost of an externality, not the cost of capital; it can be spent however the recipient sees fit.

I think the virtue of this idea is also its drawback, though.  Giving the money to cities creates a powerful lobbying group, which is great for getting congestion pricing put into place.  But giving the money to cities creates a powerful lobbying group, which is bad for getting congestion prices set at the efficient rates.  Cities will lobby to maximize revenue, not efficiency.  Overcharging is the likely result.   

Comments

[M1EK]

To me it seems foolish to provide congestion tolls on I-35 to the city - Mopac, I could make an argument for, but I-35 is a long-distance through route that predated most of Austin.

Better, instead, to require that congestion tolls be set aside for transit capital projects in the same corridor. Of course, it becomes difficult to define the corridor in cases like I-35, but at least then you'd be saying "since we can't expand this road anymore, your money is going to fund alternatives to driving on this particular road" which sounds better than just putting it in a slush fund...

it would, of course, require TXDOT drop their long-standing outright hostility to mass transit, so it'll never happen.

[AustinContrarian]

I don't understand why the long-distance through traffic can't be routed over SH130 (when finished). Through drivers would make better time and it would free up central austin from its daily clog. Through traffic will take 130 if they've got to pay for I-35.

[fastmole]

Even if the southern half of 130 never gets built, you can easily add the tolls to the downtown exits. Vacationers going through Austin (very price inelastic) would never have to pay.

[M1EK]

There is no political will to toll interstates - the few that are tolled were generally toll roads that existed before the interstate system, so that's a non-starter (even moreso than congestion pricing in general).