Should Voters Have Full Information When Voting on Transport Projects?

Voters are asked to vote on all kinds of transportation projects. In part this is because of declining federal support for projects, and local tax increases require voter approval. Elected officials are also hesitant to promote new taxes to fund projects without clear direction from the electorate. Usually new taxes for transport spending are passed. Yet there are many referendums on specific projects where taxes are proposed for particular investment. Without making any claims about the value of any of the individual projects, it is worth considering when projects violate the spirit and letter of the votes taken. I highlighted some examples pertaining to value capture previously, including the downtown Los Angeles streetcar, which may double in cost and provide less service than promised to voters. Califonia's high speed rail has also been criticized for not adhering to the specific systems and costs spelled out in the statewide 20008 referendum to raise a share of the cost of the project. See Lisa Schweitzer's piece in the LA Times for some details.

This isn't just a problem for transit projects, either, though maybe it is a problem that is worse in California because of a variety of populist legislative requirements. Here is another Golden State example. Today's LA Times reports that the 405 toll road project is in trouble politically. There are a few causes described:

At a meeting this month, crowds packed an Orange County Transportation Authority board meeting to denounce the lanes, which have been supported by Caltrans. City leaders expressed worry that the project would push traffic onto their streets, or that motorists traveling in the toll lanes would find it too difficult to pull off the highway and patronize local businesses.
The political shift over toll lanes has several causes. Some of Orange County's toll roads have struggled to attract drivers and each of the major corridors has been forced to refinance its debt to avoid possible default.
There has also been the sticker shock: Riding the 91 Express Lanes can cost nearly $10 each way at the most congested hours, an investment even for Lexus drivers. If the 405 toll lanes are built, the priciest one-way toll would cost $9.91.
As for the 405, much of the anger stems from what Orange County Supervisor John Moorlach called a "bit of a bait and switch." When voters approved a countywide half-cent sales tax, they were told funds would go toward adding one general purpose lane in each direction at a cost of $1.25 billion.
Instead, the proposal before the OCTA would add one free lane and one toll lane in each direction — but it would also convert an existing carpool lane in each direction into a second toll lane, with the added $220-million price tag paid through bond sales that in turn would be paid off by tolls.

So the project as implemented is not what the voters approved. It is substantially different, in fact. I have written about credible commitment as a barrier to road pricing before, but what is happening with these experiments in direct democracy are a bit different. Rather than voters opposing new taxes or fees because they don't believe the revenues will be used as promised the votes for specific projects are not held as binding. 

There are many problems associated with these types of direct democracy for allocating scarce resources. When voters vote on a project, be it rail, transit, roads, etc., they should have complete information. Since transportation infrastructure projects tend to go over budget frequently, which affects the scope of the projects, it is difficult for voters to accurately assess their support or opposition. Also problematic is the absence of recourse the voters have. By pushing tax and spending decisions to the ballot box elected officials insulate themselves from the severe problems that tend to arise. After all, it was the voters who approved the project, not Rep. So and So. 

Issues of representation, credibility and voter information have not been well examined in the context of local transport finance. As the federal role in transport finance is declining in the US, we need to figure out better ways of raising money for and spending on the infrastructure that we want and need. The experience in California is not encouraging for experiments in direct democracy for transport investment.

Congressional Brief on Road Tolls and Freight

Freight transport is relatively under considered within transport policy and planning. Most scholarship and public discussion focuses on passenger travel, especially in the context of how to pay for infrastructure. Road tolls and congestion pricing will affect passenger travel and goods movement differently, and not necessarily in complementary ways. For instance, one potential solution for drivers who want to avoid high travel costs is to substitute their personal travel for freight travel and simply have the goods and/or services delivered. This is common and a growing share of overall travel.

Road tolls also can influence regional competitiveness of ports and intermodal facilities. Tolls are a huge issue in the New York metro already as about one-quarter of all road tolls collected in the country are collected in the region. Between high tolls and congested roads, the costs of shipping in and around the largest market in the country are very high and does have an impact on the competitiveness of the Ports of New York and New Jersey. I have been doing work on tolls and freight in the Northeast with Jon Peters and Cameron Gordon, and today we submitted a brief to the U.S. House of Representatives Committee on Transportation and Infrastructure about this topic. Here is what we wrote:

Statement from David A. King, Ph.D. and Jonathan R. Peters, Ph.D. to theCommittee on Transportation and Infrastructure of the U.S. House of RepresentativesPanel on 21^st Century Freight Transportation July 26, 2013New York, New York Dear Members of the Panel, We are pleased to be able to contribute to the discussion regarding freight movements in the United States.  We are academics who are engaged in the research of transportation matters on a national and international scale.  We have a particular interest in matters related to the New York Metropolitan Region, as we are located in this area. 

The Port of New York and New Jersey is the third most active maritime port in the Nation and the most active port on the Eastern Seaboard.  As such, the success of this port has regional importance as well as for the United States as a whole.  Your committee is studying the future national policy as it relates to freight and we commend your efforts.  Unfortunately, we have a long way to go to get to a single and clear national policy on freight movements. 

The Port of New York and New Jersey is an excellent case to study with respect to conflicting goals and outcomes for freight movements.  The physical infrastructure of this large and important maritime freight port is located in various areas - some on the mainland of the United States, some on a somewhat isolated peninsula and the rest on two islands around the fabulous deep and safe natural harbor.  Over the last 150 years, regional planners have developed highway, bridges and tunnels to link these various port facilities to facilitate freight movements. 

Yet, these facilities face very divergent futures if the current policies continue and operational practices are not coordinated.  Like all ports around the world, The Port of New York and New Jersey needs significant capital investment to remain competitive in the world freight market.  These investments are both on the land side as well as in the actual maritime facilities.  The Port Authority of New York and New Jersey is actively engaged in moving forward some of these capital investments - but the benefits of these investments seem to be biased towards certain states and will come at the expense of other areas. 

The Committee should seriously consider the impact of regional policies such as toll rates and road pricing and their impacts on national transportation assets.  Your committee is being charged with examining our national policy to address the needs of national freight movements.  Much as we need to discuss the national interest and funding for these projects – so we should also consider how regional policies impact national assets.  With the need to commit billions of dollars to deepen ports and raise bridge facilities, the sad reality is that the pricing of the road assets may render these investments unproductive. 

In our recent work, “Does Road Pricing Affect Port Freight Activity: Recent Evidence from the Port of New York and New Jersey”, which is currently under review for publication, we found that by examining port trucking data in New York and New Jersey, we estimate that bridge and tunnel toll costs may represent over 50% of the cost of moving freight into and out of the port facilities for the facilities located in New York State.  This is way above the national norm and significant higher than the cost of moving goods into and out of the New Jersey port facilities. 

These toll costs for the New York – New Jersey crossings are not driven by cost of providing the actual service – but in fact are linked to other expenditures and costs at the Port Authority of New York and New Jersey.  Bridge tolls have increased 60.2% percent over the last three years and the Port Authority has already approved a series of three additional increases that will result in bridge prices that will be roughly 241% of the 2010 rates – or about $110.00 per trip in 2015 for a five axle truck (an 18 wheeler).  These bridge tolls will be 81.9% profit to the Port Authority by the year 2015 if this occurs. 

The net effect of this is that maritime port facilities that are located in New York City in Brooklyn and Staten Island will effectively be driven out of business by these costs.  They will be unable to compete with other regional facilities and we may in fact drive cargo that should naturally flow into the Port of New York and New Jersey into other ports that are more remote from the final demand for the products.  This will increase road congestion, increase greenhouse gas emissions and lower our regional job base. 

We thank you for this opportunity to inform the committee and we would be happy to discuss these matters further with the committee or staff if they would help in your deliberations. 

Geographic Equity and Road Tolls

Equity concerns are a major source of trouble for implementing road tolling programs. (Here are two things I have written about equity and the politics of tolls: "For Whom the Roads Tolls" and "Remediating Inequity in Transportation Finance".) This is from my paper for the TRB Committee on Equity:

Policymakers are strongly considering new tolls and fees to manage congestion, provide environmental benefits, and raise money for transportation investment and maintenance.Understandably, such a shift in the way transportation is financed raises concerns about equity. In the United States driving is so ubiquitous that any efforts to raise the marginal costs of driving will have implications across a broad swath of the population, including raising the cost of travel for many people who are poor and have no alternatives. Understanding how existing transportation financing schemes compensate for inequities is critical for developing policies that will ensure fairness in the future. To this end this essay explores how inequity is remediated through revenue recycling and dedicated programs using transportation finance.

 Concern over inequities and fairness is as old as toll roads.  The early toll roads in the United States frequently exempted farmers and folks going to church from paying tolls due to such complaints (1).  More recent supporters of congestion pricing are concerned with equity (2-7), and many scholars have identified potential winners and losers from various pricing schemes (5, 8).  Yet if the revenues from congestion pricing are not distributed—so the only benefit is less congestion—then high-income groups gain and low-income groups will lose (6). This situation has obvious implications for remediating inequity, and suggests that if inequity is a concern at least some of the revenue should be used to promote fairness and compensate those who are made worse off.  In particular, the people who lack meaningful alternatives to paying the new tolls and fees should be afforded some type of compensation.

(The number are citations and are available through the paper at the link above.)

Now that Sam Schwartz and others are reigniting the policy interest in NYC tolls it seems timely to think a bit more about equity. There are essentially no efforts to remediate income inequity caused by road tolls in systems around the world (See my TRB paper for details). But geographic inequity is commonly compensated. For instance, on Wednesday (4/11/2012) the NY MTA announced that the Rockaway Resident Toll Rebate Program has regained it's funding. From the release:

Thanks to $4 million in funding provided in the State budget, tolls for eligible residents using the Cross Bay Veterans Memorial Bridge will once again be fully rebated by the MTA.
“We are pleased to be able to return this program to the residents of the Rockaways and Broad Channel,” MTA Chairman and Chief Executive Joseph Lhota said. “Following the approval of a budget that will allow the MTA to complete a very aggressive capital plan, restoration of the rebate program is another sign of support that Governor Cuomo and the Legislature recognize the need to maintain and provide an efficient, affordable mass transit system.”
The restoration of the rebate plan will be retroactive to April 1st when the State budget was passed. Residents in the six valid zip codes (11691, 11692, 11693, 11694, 11695, and 11697) will continue to be charged for the first two trips within a 24-hour period on the same E-ZPass tag until back office software modifications to the resident E-ZPass tags are completed by late July. Once these back office operations are accomplished, customers will receive credit for tolls incurred on the bridge retroactive to April 1st.
The Rockaway resident rebate program was modified in July 2010 as part of the MTA’s efforts to close a large budget deficit. Under the modified plan, residents in the six valid zip codes paid the discounted resident E-ZPass rate of a $1.13 for each of the first two trips across the bridge. All subsequent trips taken in the same day on the same E-ZPass tag were rebated by the MTA.
As a result of the State funding, all trips for those in the Cross Bay program will be rebated by the MTA. If funding for the program is eliminated, the modified Cross Bay rebate plan will go back into effect.
The rebate plan is only valid at the Cross Bay Veterans Memorial Bridge for passenger vehicles using E-ZPass and enrolled in the Rockaway Resident Program. It does not apply to commercial trucks, motorcycles, taxis, buses or limousines.

In 2009, prior to the rebate plan’s modification, 3.6 million trips were taken by residents participating in the Cross Bay Resident Rebate program. In 2011, 3.2 million trips were taken.

Geographic inequity is generally considered a problem that needs redress, justified by the difficultly of moving. Income inequity, however, is not seen as a problem that needs compensation. Why some types of equity are worth paying for and some aren't is a bit of a puzzle.