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June 06, 2005

“Value Pricing Our Highways”

Tired of sitting in bumper-to-bumper rush hour traffic on I-95 and the Merritt? Well, esteemed economist Milton Friedman has the answer.

Almost a decade ago, Freidman realized that traffic congestion was just a matter of supply and demand: too much demand and not enough supply. While some have suggested expanding the supply of roadways by double-decking I-95 or widening the Merritt Parkway, a simpler (and less costly) solution seems to be in managing the demand using “value pricing”.

Today, when we drive on highways at rush hour it costs us no more than if we drive off-peak. That is wrong. The value derived from being able to cruise (or crawl) on I-95 in morning rush hour is much higher, and should be priced accordingly.

Consider the other services we consume that offer off-peak pricing. Go to a movie on a Saturday night and you’ll pay more than on a weekday afternoon. Take a flight on a busy holiday weekend, when everyone else wants to fly, and you’ll pay more. Even Metro-North offers peak and off-peak (reduced) fares. So too should our highways.

Using electronic tolls (think EZPass), motorists who want or must drive at rush hour would pay a small price for the privilege. Those who don’t need to be on the roads at the busiest hours would wait, and pay less (or maybe nothing). That would mean fewer cars at rush hour and less congestion. Those paying the tolls at rush hour would get faster trip times… real value for the price. And the money raised could pay for long overdue highway construction or, better yet, subsidies for mass transit to keep fares low and attract even more cars off the highways.

San Diego introduced value pricing on one of its interstates in 1996. And in Minnesota an even bigger experiment is underway with what will be known as HOT (“high occupancy toll”) lanes once reserved just for car poolers. Even single-occupancy drivers could enter those lanes if they were willing to pay. And depending on traffic, those tolls would be recalculated and displayed every three minutes, fluctuating with demand.

Is it worth, say, $4 to drive eleven miles at rush hour? You bet, if it means you pick up your kid at daycare on time and avoid a $1 per minute penalty for late pick-up… or if you can actually make that important 8:30 am meeting that wins you an important piece of business.
Value pricing is already underway on the George Washington Bridge. In rush hour, big-rigs pay $36 to cross. But off-peak it’s only $30 and overnight the toll drops to $21. Since its introduction, value pricing has evened out the traffic load, saving everybody time and money.

Why haven’t we put such technology to use in Connecticut? Two reasons: 1) people think tolls actually slow down traffic and 2) there is a myth that if we reinstate tolls on our highways we’ll have to repay the Federal government billions of dollars. Both are false.

Drive the Garden State or Jersey Turnpike using EZPass and you can sail thru the barrier at top speed. And even the Federal DOT acknowledges that it will make exceptions for highway tolls used as a traffic mitigation tool.

So, as you motor across the countryside this summer, take a look around. Make note of the many state and private toll roads using new technology to collect tolls that pay for the roads you’re enjoying and ask yourself this: why aren’t we as progressive here in Connecticut?

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JIM CAMERON has been a Darien resident for 14 years. He is Vice Chairman of the CT Metro-North / Shore Line East Rail Commuter Council, and a member of the Coastal Corridor TIA and the Darien RTM. You can reach him at jim@camcomm.com or www.trainweb.org/ct