High Occupancy and Toll (HOT) Lanes Benefit Everyone

Congestion pricing often draws the criticism that it disproportionately burdens lower-income drivers. But a new report by California researchers contends that these "pay-as-you-go" transportation options might actually be more fair to all income levels than paying for highway or transit improvements through sales taxes.

The study examines the High Occupancy/Toll lanes on California 91 in Orange County. The 91 Express Lanes – two lanes in each direction in the center of the highway – cover a 10-mile stretch of frequently congested freeway. Users must have an electronic toll tag in their vehicle and pay a varying price depending on how much traffic is clogging the main lanes. Tolls are set to keep traffic in the express lanes free-flowing and range from $1.25 to $10 in a metropolitan area of over 15 million people. In Denver of about six million people, the HOT lanes charge ranges between 50 cents and $3.25.

The study compared how tolls and sales taxes affect Orange County's lower-income residents. It found that political opposition to congestion pricing on equity grounds is flawed.

The 91 Express Lanes are used by middle- and upper-middle-income households. Researchers then examined how people of different income levels would be affected had the four lanes been funded by a sales tax increase instead of congestion tolls. Orange County already has a local-option transportation sales tax that generates about $240 million annually.

Had the sales tax been increased to pay for the extra lanes (like Hawaii’s 0.5% tack onto the standard 4% general excise tax for the Hannemann rail proposal) the poorest county residents would have paid more than $3 million more in taxes than they actually did under the current tolling system. Unlike a sales tax, paying to use the HOT lanes is voluntary.

"Using sales taxes to fund roadways creates substantial savings to drivers by shifting some of the costs of driving from drivers to consumers at large, and in the process disproportionately favors the more affluent at the expense of the impoverished," according to report authors Professor Brian Taylor, director of the UCLA Institute of Transportation Studies, and Lisa Schweitzer, assistant professor at USC's School of Policy, Planning, and Development. (Dr. Taylor spent a year long sabbatical at the UH-Manoa department of civil engineering in 2007.)

U.S. Transportation Secretary Mary Peters, a proponent of charging drivers for the use of infrastructure, said the study provides more proof that tolls do not unfairly burden lower- and middle-class drivers.

"Congestion pricing and tolling have the power to reduce commute times and make our metropolitan transportation networks far more efficient and environmentally friendly," Peters wrote on her blog "Fast Lane."

The proposed cost of using some HOT lanes is raising eyebrows, however, and is certain to continue the debate over the best methods for financing transportation improvements.

The private builders of new HOT lanes on the Capital Beltway in Virginia are betting enough drivers in the Washington region will be willing to pay tolls. Construction began last month on 14 miles of Interstate 495 HOT lanes between Springfield and the Dulles Toll Road. Transurban, the Australian company that will operate the lanes when they open in 2013, does not expect drivers to use the lanes every day but only when the value of time and certainty outweighs the price of access.