When the Pike demand is below capacity – during the substantial off-peak period – there is no pricing problem or opportunity. During those periods, tolls serve only a revenue function.
Apparently, Governor Patrick wants to fashion himself in the mold of the sledgehammer- wielding populist Bill Weld, who personally took up an implement of destruction to begin demolition of the Newton toll plazas way back when. But, it’s a know-nothing kind of political opportunism. The so-called free commute creates all sorts of unintended – but absolutely predictable – costs.
For those willing to pay the tolls, there’s a benefit to keeping those unwilling to pay the tolls off: a faster commute. If you don’t keep off those unwilling to pay the tolls, those willing to pay suffer. Time is money. Congestion creates pollution and wastes energy. Free Pike travel reduces demand for T and commuter rail. More people driving into Boston taxes Boston streets.
Those costs – externalities – can be reduced or eliminated by managing the tolls with peak-period pricing. Right now, Pike tolls are too low during peak periods and there’s not enough difference between peak and off-peak prices. We know peak-period tolls are not high enough because there is regular congestion. Raise them every six months until congestion disappears – allocation is optimized. Provide a meaningful discount between peak and off-peak toll rates and people will have an incentive to time-shift their travel. Time shifting is important because under-use is just as much of a misallocation as over-use. Ideally, the Pike would see traffic spread out more evenly across the day.
So, no, Governor Patrick, eliminating tolls should not be an objective, much less a condition of a gas tax. Perhaps, it make sense to reduce the off-peak tolls. But, given the premium ride you get on the Pike v. local roads, there ought to be some toll off-peak.
In another post, I’ll address three issues I didn’t address here:
- Regressiveness of tolls, particularly higher tolls
- Fairness of tolls on the Pike v. no tolls on I-93
- Impact on local roads
*Braude and his guests Dan Kennedy and Tom Palmer are sadly uninformed on the show’s main topic: the Pike’s swap option deal that’s got them on the hook for tens of millions. But, all three of them come to reasonable positions on hiking tolls and the gas tax.
House and Senate leaders yesterday announced a series of public hearings on tolls, taxes, and other methods of raising money for the state’s troubled transportation system, as they launched what will probably be the most intense debate of the upcoming legislative session.
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So much chatter on that video that the ‘insider’ deals with the mysterious swaptions are the problem when they were just another ineffective means to deal with a ‘business’ with either i) costs that are too high, or ii) revenues too low.
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p>History. The swaption was the cobbled together solution to the snowball of a problem that was big, even in 2001.
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p>In 2002, the Turnpike owed about $2.2 billion in bonds maturnity at various times, but some notably maturing in 2009.
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p>Facing its ongoing need for cash, the Turnpike “sold” to Lehman and USB certain rights for the 10 year period beginning January 1, 2007, or January 1, 2009 depending upon the particular Turnpike bond.
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p>Lehman paid to the Turnpike the sum of $35.2 million annually from 2002 to 2007. USB paid annual amounts of $22 million.
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p>In exchange, Lehman and UBS took back rights – the swaptions – whereby Lehman would have the opportunity to undertake the debt payoff schedule on $791 million of bonds at a fixed rate leaving the Turnpike with a presumed higher variable rate.
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p>To mitigate the risk that Lehman would exercise its option in a period rising rates, also in 2002, the right sold by the Turnpike and purchased by UBS was the right for UBS to undertake a variable rate payment on the SAME $791 million of bonds and and leave the Turnpike with a fixed rate.
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p>The inherent gamble in the offsetting swaption transaction was that likely, the “offsetting” swaps would not be optioned at the same time, and in the event that one leg of the swap was optioned, a prudent strategy would be to quickly refinance the bonds and eliminate the exposure of, in effect, having written a naked put. i.e. having UBS or Lehman “put” the higher rate to the Turnpike.
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p>All this derivative action was to counter a 2001 recession, a delayed toll increase, a Fast Lane toll discount and the Central Artery operating expense. BTW, all these inevitabilities were forseeable but ignored.
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p>The ratings agencies didn’t ignore it, and saw the risks of these costs and immediately downgraded the Turnpike debt from A/A- to BBB+/BBB soon after the swaps.
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p>Fast forward to 2008.
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p>Facing i) no significant cost control efforts ii) a highly leveraged balance sheet and iii) horrible debt markets, in short, the perfect storm, the Turnpike can’t refinance.
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p>The alternatives:
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p>1: The Deval Plan. Liquidate the agency; raise the tolls. It’s inevitable really. The only open question in this plan is what’s to become of the debt.
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p>The biggest question is the one the Governor didn’t address, but the presumption is of course that it’ll be refinanced with some sort of general obligation (GO) bond or else guaranteed for its duration.
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p>What this might do to Mass bond ratings is unknown, but with 25% of the total Mass debt in variable debt, a single point rise in rates costs the state around $40 million per year.
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p>2: The gary plan. Toll I-93 and combine the Pike revenues with I-93 revenues to fund the debts. This was off the table early. Why? Probably, political heat. “The buck stops there, not here.”
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p>3: Leave the agency standing but fund the Agency with a combination of i) GO bonds, ii) a dedicated tax, say a gas tax, and iii) toll increases. Probably a horrible idea, since it solves the revenue side without addressing the Pike overhead and costs.
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p>4: The other gary plan. Sell the Pike. Why not? Isn’t this the best answer? Or, if not the entire pike, there must be some serious Real estate owned or right-of-way plus abutting real estate with huge commercial value to a mall owner, restaurant, etc…
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p>6: Go hat-in-hand to Washington seeking a bailout. Everyone’s doing it.
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p>7: The Dan Kennedy Plan. Let it fail. Probably worth considering for a few seconds, but the State that’s willing to let its Agencies fail, will let them fail again and Rating Agencies will remember that for the next, and more expensive, debt offering.
… people into trouble. Whodathunk?
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p>2. What do you think of Sean’s idea of peak-period pricing?
Both are public assets that are being wasted. There’s plenty of abutting land to the Pike that developers would love to develop, and would pay for the construction costs of on and off ramps to do it.
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p>What, other than the genius of the MTA Central Planners, is to say, that on the Turnpike, we should only have a McDonalds, a Mobile Station and some other random franchises, separated by 20+ miles of scenery? There’s some serious money left on the table.
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p>Tolling I-93 is a no-brainer, and is in line with the ‘off peak’ theory. Right now, the cost is zero, and the road’s packed. Toll it, perhaps during peak time. The only stopper is and has been political heat.
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p>Peak period pricing seems to kinda work, although I’m not sure how elastic that mechanism is. Question: would you arrange your travel to save 25 cents? It may be a good sell, politically speaking.
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p>At a certain peak load, it makes customer service sense (is that a goal?) to drop the toll completely and open the gates, to allow faster traffic flow: holidays at the Sturbridge toll for example.
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…We’re not selling the pike. Not everything is for sale.
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p>I think #1 (The Deval Plan) is what’s going to happen. I think Deval is a smaht guy and can get it done right. But I will acknowledge that there are concerns with the Mass bond rating as you outline…
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p>#2 is, I think, a good plan IF we can have the discipline to pay down the debt and then scrap the tolls… Historically, we’ve not had the discipline. I can’t see that discipline coming into play if we have to pay off the debt over more than the life of one administration. This is seen elsewhere, as well, where tolls for the purpose of building become self-perpetuating. So, ultimately, #2 isn’t workable.
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p>Senator Steven A. Baddour, who will preside over a public legislative hearing on privatizing the turnpike today
… this can’t end well…
I wanted to get some expert views on this–it’s not something I know anything about.
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p>It seems to me that the essence of privatization is that the Commonwealth pays a profit to the firm that leases the Pike in return for the firm’s willingness to undertake measures that are politically unpalatable, e.g., toll hikes, decreased maintenance, etc.
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p>If that’s right, why not get up the willpower to make the hard choices and save the profit for the taxpayers?
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p>Am I looking at this the right way?
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p>TedF
… a new project (as opposed to already existing infrastructure) can be a resource for dealing with a cash flow issue. That is, a private contractor can be retained to put up the front end costs, but also receive payment during the lease. On balance over the whole lease, of course, there is still profit you are paying, otherwise nobody would take the contract. But, in the meantime, you are able to defer the up front costs.
Typically, advocacy to “sell the Pike” doesn’t actually mean convey the pike real estate and property to a private owner, but rather it means the entering into of a long term lease and management contract, the consideration for which is an upfront payment plus futures by the leasee to the State lessor.
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p>BTW, I’ve worked over the years on the packaging of several private deals of public property: post office facilities and Indian Tribal shipping facilities. Never a road, but I’m aware of the metrics: there’s typically 3 reasons for privatizing a road; two reasons are good, the other not (but it’s subtext for the ultimate deal).
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p>The good reason is that IF the private concern can demonstrate that it is has a clear competitive advantage over the existing operations through economies of scale. I think this is the reason that you say ‘why not get up the willpower’ to realze this gain ourselves, no?
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p>The operations of the Pike are completely opaque. That’s rediculous. I know little of the operating budget of the Pike and can’t opine how efficiently or inefficiently it operates. However, mile for mile, it’s one of, if not THE most expensive road in the U.S. That says something. It’s also telling that the toll operators earn nearly $20 per hour to make change.
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p>Further, there’s virtually no innovative use of the road to develope concessions in connection with abutting property. Seems that based solely on that enormous failing there’s an argument for private operations.
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p>Look, for example at Warren, Mass. There’s a dead ramp from the Pike to Route 32 and acres of vacant abutting property. How difficult would it be to negotiate development in exchange for an offramp.
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p>Similarly in Charlton, MA.
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p>There’s more. Those are just 2 examples.
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p>The second good reason is that often, title to depreciable property owned by the State is conveyed to the Lessee who receives a tax deduction for depreciation expense that the State would not. As a result, there’s some, albeit minor, value generated the State can never otherwise realize.
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p>The bad reason frequently cited, is that because Government is politically accountable for unpopular toll increases, there is a tendency for Government to push off the decision for toll increases onto a private entity and avoid the blame for future increases.
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p>I don’t see a problem with a private road, so long as the State keeps to the traditional privitization caveats:
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p>-Buck stops at the Legislature. i.e. Sign off by vote, not simply by an Executive negotiation.
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p>-The Public retains control over transportation planning and management decisions;
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p>-The calculation of the PV of the future tolls is transparent, as well as the operating cost assumptions, to the buyers and public;
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p>-No more than 20 to 30 year deals.
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p>-Negotiated state of the art maintenance standards as opposed to Fed or State minimums;
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… based escape clause. Especially if there is any kind of maintenance or operations scope. This would normally be a bigger deal for the road proper than the leasing of any abutting state owned ROW.
I think getting rid of the tolls altogether and raising the gas tax is the way to go. What you are proposing sounds like transportation elitism, and I don’t think it will encourage more people to take the T so much as cause some people to go broke on tolls. For many, the T just isn’t convenient/feasible. What’s wrong with a healthy hike in the gas tax? The tolls, as they are, are like a form of geographical discrimination, in my opinion, and I’ll be interested to see how you address the regressiveness/unfairness issue in your next post.
Allocating resources with willingness to pay isn’t elitism — it’s capitalism.
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p>And, it works. It’s being done in California now. Although, I’d go a step further than Sean, I’d have the rate changing more frequently, as a direct function of the current and expected immediate future demand.
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p>The fact is that people do respond to changes in price. This isn’t a shocker. What’s important to understand about congestion pricing is that sometimes only a reduction of a few percent of traffic results in much less congestion due to the very nonlinear impacts of too many cars. What about those who are going to work? They still will — although some may be able to timeshift slightly, work from home occasionally, move to a home closer to work to pay less toll, or even decide to join a gym near work so they can drive in early/home late and skip the high tolls one way. Those who aren’t going to work will respond to the change in price to choose to shift their shopping or other trips to off-peak times when prices are lower.
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p>Remember, you don’t need to change everybody’s behavior — just enough to ensure that the number of cars at time t is just low enough to keep people moving at 65 mph.
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p>The gas tax provides the revenue to pay for the Pike, but it does nothing to discourage use of the Pike during times of peak congestion, when every Pike user would benefit substantially by the congestion surcharge. Furthermore, given that congestion is due to 9 to 5ers and that most high income earners work those hours but a much smaller percentage of low income earners work those hours, the claim of regressiveness isn’t clear at all. Aren’t all taxes and fees based on use or consumption [including how much gas one uses] regressive?
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p>Fairness is an issue, which is why I support adding tolls to other Massachusetts highways, particularly ones which are suffering from demand which exceeds capacity.
i wrote it down below by accident, so please click here:
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p>http://vps28478.inmotionhosting.com/~bluema24/s…
Either that or start charging people for every single service we can. Why has the western part of the state paid dearly while all other highways are free? I know about the bond issue but that was over in 1997 and they extended for dubious reasons.
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p>Why not have a fastlane on the pike and charge $10 each way? How about putting tolls on 495 or 290 or 93 maybe 128 (95)? express counters at he RMV and every other public office where we charge $100 but no waiting. How about a “speeding pass” where speeders could pay a large fee then drive over the speed limit. Capitolism galore!!! But all very wrong.
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p>Just get rid of the pike, the hacks working at the pike, the 80% finacial load of all revenue paying for the collection of tolls (highest in the nation) and the slowdowns and wasted gas from tollbooths.
Tolls have caused massive traffic jams and hang-ups in many places, which can be rather irksome at times. Yet, if the tolls were to be abolished altogether, where would the money come from to maintain and repair the highways as necessary?
Retaining the tolls involves retaining the infrastructure that collects the tolls, which is expensive. Toll booths, toll takers, the whole package costs money.
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p>I would be opposed to any plan to reduce tolls with the gas tax. I would be happy to eliminate the tolls and pay the cost of the road and the authority’s obligations through the gas tax. Throw on a few cents more for transit, as good transit unclogs roads cheaper than adding pavement.
Retaining the tolls involves retaining the infrastructure that collects the tolls, which is expensive. Toll booths, toll takers, the whole package costs money.
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p>I would be opposed to any plan to reduce tolls with the gas tax. I would be happy to eliminate the tolls and pay the cost of the road and the authority’s obligations through the gas tax. Throw on a few cents more for transit, as good transit unclogs roads cheaper than adding pavement.
Only people with the most money should have the ability to use our convenient road system on an every day basis? This whole peak-use argument smacks of elitism to me. I’d much rather people take public transportation and avoid rush hours, but we need more carrot, less stick.
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p>Plus, there’s other, more efficient ways of getting people to use other modes of transportation. The parking fee tax idea I’ve read would be a far more efficient means of collecting while mitigating the road traffic of people coming to and fro in Boston.
Taxing parking? Taxing parking with diminishing rates as distance to Boston increases?
parking in Boston, making people less likely to drive in. It basically does the same thing as tolls without actually having to pay for those tolls. Given that collecting tolls is expensive and increases traffic, this is a better alternative.
after all, the rich have parking spots provided by their companies. Only the middle class schlubs pay to park at private lots.
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p>Every use fee — be it gas tax, congestion pricing, or parking tax — is regressive at some point in the curve precisely because it’s not an income tax. And, the Boston parking tax does nothing about those who work in Cambridge, Somerville, Brookline, Newton, Quincy, etc.
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p>That’s not to say I’m against a parking tax… just that every proposal will have those who are more adversely impacted than average and those who are less adversely impacted than average.
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p>Oh, and this elitist stuff is nonsense. A use tax on roads is no more elitist than charging a flat rate for a drivers license, a vehicle inspection, or a fee per gallon of gasoline used.
charging extra for the privilege of using it at a certain hour of the day goes above and beyond the fee. We have to pay for services, but we need to do so in ways that are most fair and equitable. Tolls are bad policy on many fronts, not the least of which is the fact that they’re expensive to collect to begin with. A parking fee tax would essentially do the same thing as tolls, but in ways that are more fair and certainly less expensive to collect.
These are some very interesting thoughts, I’ve enjoyed visiting BMG and seeing what people have to say. As mentioned above, there is indeed a hearing of the Joint Committee on Transportation tomorrow afternoon. Also, I have set up a special transportation blog where folks can share their opinions. Feel free to check it out:
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p>Mass Trans for Tomorrow
Hi Senator,
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p>Thanks for joining our discussion! I agree with Sean’s idea on peak-period pricing as a rational way to mitigate rush-hour congestion. But I wanted to put forth a few other ideas. First, why not charge a small toll as a user fee for certain expensive site-specific projects. I’m thinking in particular here about the Storrow tunnel and the Longfellow Bridge, but I’m sure this principle could be applied elsewhere. You would want to make the toll low enough that drivers would continue to use the road, but still raise the revenue over time needed to finance the project (I would guess that 50 cents, one way, would be in the ballpark). Also, it would be ideal if it were written into the authorizing law that the tolls come down when the construction costs are paid off and that maintenance will come from the general fund (vs. how the Pike has been treated). Of course, this creates a potential for toll bottlenecks, which leads to my second idea: Make these roads E-Z Pass Only. In fact, this should probably be done for the Pike/128 and any potential 93 tolls as well. There really is no excuse anymore for cars without transponders (indeed, I frequently ride is CABS without transponders!) and the Registry could set up places to simply increase your balance and/or pay off owed tolls — registry offices, rest areas, T parking garages, etc. — with a similar system to the Charlie Card. And, at the end of the day, there are other alternatives for the stupid and stubborn (28, Comm Ave, Route 9). Thanks for your time, and good luck with these issues!
…that tolls paid for the roads on which they are collected. The question then is whether tolls continue to be needed to maintain the Pike. The options are have the Pike paid for by its own tolls and manipulate the rates to make it work, or maintain the Pike from the same budget as our other interstates. In no case, however, should tolls collected on the Pike be used to pay for any roads other than the Pike; that is unfair.
Here are the reasons why I think you’re wrong:
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p>1. When people are displaced from the Pike because of the tolls, much of the time, they’re displaced to using other roads which are also congested. However, because those other roads tend to be city streets, with traffic lights and bad pavement and so on, that means a very large amount of wasted gas, and a lot more wear and tear on cars. Overall we’d be more efficient, both in terms of amount of gas to get people where they’re going, and in terms of how long cars last, if we used more of our best roadway instead of more of lesser-quality roadways.
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p>2. Being the only effective route serving its niche, the pike is basic infrastructure for the state, but you suggest that it’s acceptable to demand-price it in a way that gives advantage to those with greater ability to pay. That has social costs you’re not looking it; it’s not just the simple economic tradeoff you seem to think it is.
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p>In purist economics, how much you’re willing to pay for something is a proxy for how much you want it / how much you care about it, and that allows the math to work out cleanly. In real life, however, how much you’re willing to pay for something is not a good proxy for want/care level, because it is also proportional to how much you have, with a nonlinear proportionality. Because the effect of “how much you have” on the relation between “willing to pay” and “want/care” is subjective, and because deciding which resources should be rationed by this method is partly a moral judgement, economics tends not to analyze it. But that means you can’t rely on purist economics to make these kinds of decisions, although you can use it to point out costs and benefits that should play a role in the decision.
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p>You’ve pointed out a real benefit of tolls on the pike. However, that benefit is not all there is, and it is not enough of a benefit to outweigh the problems with tolls on the pike. Getting rid of these tolls is a good idea.
the congestion pricing surplus was used to expand public transit, thereby helping to lower the cost of transit for those with less?
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p>It ain’t a perfect swap, but it would certainly help and, as a side note, it would help to reduce the congestion on the Pike, thereby allowing the differential price to be reduced.
“Let’s take a bad fee, and use it to fund something good”
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p>Well, I like “something good”, but I don’t like “a bad fee”. Can’t we fund “something good” with a better fee?
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p>I mean, sure, we could consider the relative benefits and maybe conclude that if the revenue were used to expand public transit, then on balance the pike tolls are good. But that doesn’t tell us anything useful about whether the pike tolls are inherently good, on balance, given the direct costs and benefits of having tolls on the pike.
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p>So forget the bribes and judge this thing on its merits: Aiming to eliminate the tolls is a good idea. Funding public transit through something other than pike tolls would be better than funding it through pike tolls.
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p>Overall, I find user fees on infrastructure to be regressive and unfortunate, a substitute for actual, fair, reasonably thought out taxes. Any time we’re imposing a user fee on basic infrastructure to fund some government service, what it really means is that our tax system is not up to the job, and we’re using a gimmick to avoid dealing with it. But we’re losing out when we do that.
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p>Note, BTW, that a gas tax would actually have the effect this post suggests pike tolls do: It would actually shift traffic from cars to other means, rather than simply shifting cars from one road to other roads.
I don’t think that aiming to eliminate tolls is a good idea. I think tolls are a good idea. Obviously, within that context I think that efficient and fair tolls are important, and I’m certainly not claiming that tolls in MA meet either threshold. My solution is to fix the problem, not eliminate the toll collecting entirely.
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p>It’s true that fees are regressive in that they’re not a function of income, and that is trouble for we progressives. But it’s also true that congestion priced tolls maximize the usefulness of the road because highway traffic is nonlinear in throughput:vehicle ratio. If you want to make the best use of the road, you’ve got to limit the number of users at certain times, and the question is: how do you do that? Pricing is one method that deals directly with the problem — not how many mpg your vehicle gets, not how many people are in the vehicle, but the specific issue of how many vehicles per hour the road can handle before its performance deteriorates.
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p>I agree that gas tax is also good policy, in that it discourages all driving. I also agree that raising the toll would shift some traffic to other roads, but it would also eliminate some traffic because some people will (a) telecommute, (b) live closer to work, (c) work closer to home, (d) carpool, (e) shift to mass transit, etc. Now, some of these are immediate solutions and others happen over time, but they will all happen to some extent. How much? Dunno. The problem with simply assigning a gas tax to the problem of congestion is twofold: (1) fairness. Congestion is a function of vehicles, not miles per gallon. Why should a Prius owner pay 1/3 of a Crown Vic owner when they’re contributing equally to the congestion? (2) The gas tax does nothing to ease congestion most on roads that are the most congested. Tolls do help reduce that congestion, and congestion-based tolls help users to also decide to time-shift their journey to utilize capacity better.
I’m glad you admit that you don’t understand how congestion pricing would actually impact behavior. I’m less grateful for your willingness to use the pocketbooks and lives of those of us who commute from the west to conduct an experiment to find out.
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p>As I noted in an earlier thread on this issue, it makes no sense to me that the correct price for using the pike is x and the alternate local routes is zero. Such a structure shifts traffic burden to local roads and communities in an inefficient and unfair manner. Like anything else there will be winners and losers, but I see no reason why congestion pricing creates a net gain for the public good or why its better than having no tolls and letting relative travel times determine traffic equilibrium.
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p>An increased gas tax coupled with elimination of the tolls is not perfect but it is the fairest way to share the cost of funding the entire transportation system. I would be in favor some form of rebate for those in the western part of the state to adjust for big dig related bills that need to be paid.
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p>It is patently unfair to have tolls on certain roads and not others. To those that suggest we keep the pike tolls and add them on 93 and other roads to be “fair”, I say let’s all agree to take down the pike tolls now and we’ll put them back up once tolls are up on 93, 95, 495, 128, 2, 3, etc. I should be gone by then (actually, we will all be gone by then).
Someone may have already suggested this, but what about congestion based parking fees in lieu of tolls. This solves the problem you highlight of offloading road congestion. Just an idea.
How would it work?
… only be practical with proper equipment, most likely digital meters. Private garages would be assessed. The start-up costs for the new equipment might make it expensive. Maybe not such a good idea after all.
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p>Where did I write that, or even suggest that? I know exactly how congestion pricing will impact behavior — the higher the congestion price, the lower the traffic on that road. Now, I certainly don’t know exactly how sensitive Pike commuters are to congestion prices, nor do I know how many will use substitutes and to what extent. Then again, I’m not a traffic engineer [though I am a systems engineer who uses congestion pricing to normalize loads, so yes, I do know quite a bit about this]. But that’s all irrelevant. What is known is that congestion pricing does work. This isn’t an experiment — it’s been implemented many times, and has had consistent, predictable results.
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p>The price of the alternate local routes is certainly not zero. If you want to drive from Chicopee to Boston on local roads, be my guest. You’ll find that it will cost you more money in gasoline, more money in wear and tear on your car, more time, and more stress when compared to a freely moving Mass Pike. For some, those costs will be lower than the increased cost of the Pike and they’ll do just that. But, not many. After all, waiting at traffic lights sucks. Big time. This concern is raised at every congestion pricing proposal, and it just doesn’t bear out very much because local roads, while not toll roads, have their own costs of use.
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p>The net gain is that the throughput — the number of vehicles which pass any given spot in the Pike — decreases once congestion reaches a certain point. At that threshold, fewer cars on the road would allow more cars to get to their destination in any time window. This is really the key point. Traffic is nonlinear, and throughput is extremely sensitive to density. If you want to maximize the usefulness of the infrastructure, you want to get as many cars as possible through in a unit time [say, 7:30am – 8:30am]. To do that, you’ve got to actively discourage drivers from using the Pike if there are too many users. That’s what congestion pricing does.
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p>Now, keep in mind that congestion pricing can be used to lower the price of the tolls at other times. After all, there’s no traffic on the Mass Pike at 5am. You could actually lower the price then, which would help encourage even more people to use the pike off-peak if they can do so. The extra revenue from congestion pricing can go to mass transit, it can go to the general fund, it can go to subsidize the EZ-pass transponders themselves, or it can be used to lower the price during off-peak times.
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p>Letting relative travel times determine traffic equilibrium doesn’t work. That’s why we have traffic jams even when there’s no accident or roadway work. It’s a tragedy of the commons, and we all suffer because of it.
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p>I agree completely. Don’t conflate congestion pricing, which is merely a fine-tuning of toll prices, with the fairness of having some toll roads and some non-toll roads. As for me, I think tolls are fair, and we ought to have them on highways, and we ought to use congestion pricing to keep the traffic throughput as high as possible.
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p>I guess statements like these make me think you don’t understand how behavior will be affected since you don’t understand the relationship between pricing and usage. I don’t think we need an engineer or an economist to tell us that if you increase the cost to use the road that less people will use it. If you can’t answer the questions of how many fewer people will travel at various price points then how do you implement? The best you can do is guess and then adjust. This sounds experimental to me.
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p>We agree on this. But lots of people will use local roads between Framingham and Boston. You don’t see a cost associated with this. i do.
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p>But wouldn’t you agree that it is not the least bit doable politically and probably operationally to implement tolls on all major roads in the area? And, therefore, the only fair thing to do is to tear down the Mass Pike tolls? Or are you willing to saddle certain people but not others (like coincidently, you) with these extra fees because … you can?
That doesn’t mean that others don’t know, or don’t have models with very good estimates.
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p>I don’t know how to calculate the amount of load a bridge can bear. I know it can be done though.
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p>As for political feasibility, a month ago I didn’t thing raising the gas tax was politically feasible.
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p>And, for the record, I’ve driven about 120 miles on the Pike in the last week.
… what’s your function…?
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p>Aah.. not sure. I think congestion (at least in Boston, as I see it) is a function of three things:
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p> — road layouts (specifically city planning. Fr’instance, Boston is saddled with a legacy of one-way streets as a result of long-disused horse traffic. Not only were many streets made (and kept) narrow, but the proximity of multi-lane highways to the narrow (contervailing one-way) streets automagically creates choke points. You probably couldn’t have planned congestion better than to have something like the expressway right next to some Boston neighborhoods with narrow narrow streets.
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p> — poor driving skill. This is not entirely independent of the above city/road planning issue: many drivers to our fair city often find themselves faced with quick and bewildering decisions, like getting off the expressway to be faced with the choice of three, sometimes four narrow roads and a busy intersection all the while with honking cars lining up to make the choice behind them.
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p> — Delivery vehicles. Specifically, large trucks. That’s the price we pay for having a high density of restaraunts, and, for the most part these delivery’s happen in the wee hours. But one large truck in Bostons streets can do the congestion work of many a car in far shorter time.
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so the Boston stuff isn’t really relevant.
… that since most of the highways lead into Boston, it might be relevant.
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p>In my experience route 2 is always crowded because it’s got too many people on it. Other roads, like 128 and the Pike, not so much. In fact, the three reasons for congestion on the Pike (that I’ve seen) are accidents, tolls and getting of into Boston.
Took one away for #2.
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p>But we’re already pricing out people who can’t afford cars?
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p>Leaving aside the fact that #2 contradicts #1 (you can’t have ‘the only effective route serving its niche’ if you also argue that taxing that route will cause other routes to be used…) this is not a unique problem. Urban zoning and taxation on resources usually involve a defined locality and relationships between and among localities (think commercial vs residential zoning…). Here, however, there is no locality and the problem, in fact, is transit between localities. So the analogy that presents itself is the bridge: which bridges have had tolls for time immemorial, with attendant social costs. The perceptual difference, and the reason people pay tolls on bridges without much complaint, is that bridges are roads extending into thin air: a significant engineer feat that, well, needs to be paid for. Connection directly into Boston, without something like the Pike, is more or less by accident or, at best, local design (like rte 9).
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p>But I do agree with you on #1: Rte 20 and Rte 9, especially, would see significant increases in traffic, with attendant wear and tear on cars and roads and a higher accident rate, should the price of the pike increase drastically.
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p>Personally, I’d like to see something more like an actual bridge. Seriously. Let’s go all the way and leave the local roads for the locals. I’ve often thought that raised bridges/roads ought to be built over each of routes 2, 9 and the pike, (keeping the roads underneath intact) and with commuter rail as well. Make it one way (IN during the AM, OUT during the PM).
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p>Ways in which that is different:
Gas does act as a user fee in a way similar to tolls, so that’d be a relevant thing to compare against. But since gas is so much cheaper (per distance travelled) than our public transit, talking about people who “can’t afford gas” doesn’t necessarily mean what one might expect it to. If you can afford to take the T you can definitely afford the gas to take you on that same trip (ten times over, at least).
Do you have any idea what Rte. 16, Rte. 30, and any other access road would look like after the tolls are jacked up? I’m an interested (and bemused) commuter, traveling from the South Shore to (thankfully) the wilds of Needham where I can slack off at Great Plain Ave before 128 completely comes to a crawl to get to my $0 parking fee at my place of work. However, if you want to completely and utterly trash your beloved “Newton Streets & Sidewalks”, let’s throw everyone further onto those access roads…
They’re our roads. In under no circumstances should we treat them like they’re the newest capitalistic device. That is, indeed, elitist.
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p>If you want to discourage people from using certain roads, the best means to do it is through improving public transportation, in terms of access, expense and service. That would probably have a much larger impact on diminishing traffic. Beyond that, there’s other, better ways to do what you’re asking without propping up tolls – which is a costly tax to collect and would be nearly impossible to make them equitable.
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p>While you’re not going to change the behaivors of a lot of people, you’re robbing hundreds or thousands of dollars from their pocketbooks. That’s money that could be going to the local economy. That’s money that makes those areas far less desirable to move to. Tolls are just bad policy, peak-pricing included.
this was meant to be in response to Stomv.
We are throwing around the term ‘elitist’ in some nonchalant and imprecise ways. I’m having difficulty conceiving of exactly how moving where tolls come from could be considered ‘elitist’. It could be considered an act of geographically applied fiscal opportunism, but elitist? I might consider you may be totally ‘better’ than me,… I still have an incentive to get you to pay and for me not to pay.
(or trying, anyway) that peak-pricing is elitist. To charge extra funds for the privilege of using tolls during certain times of the day just smacks of elitism to me. So, it’s not the tolls, but this peak-pricing idea.
… in what way is it elitist. What about it makes the adjective applicable?
Many cities have similar schemes for mass trasit, and I’ve never heard it called an elite practice.
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p>Pittsburgh for example, has regular bus/trolley fares until 10:00 a.m. then there’s a discount fare from 10 a.m. to 3 p.m. As a result (they say), the elderly folks wait ’til after rush hour to catch the buses.
… that you are similarly confused as to how the term ‘elite’ can apply?
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p>While I don’t think tolls are inherently ‘elitist’, I can say that bridges and toll roads have been used in the past to both exclude selected populations and maintain divisions, often along racial and ethnic lines. A lot of existing automobile based infrastructure was, in fact, designed and built when car ownership was more rare and was limited to wealthy families. Mass transit facilities have, more or less, been shoe-horned unto that legacy. That’s the city we live in (or near…).
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p>It doesn’t mean it is ‘elitist’. It does mean that ‘elitism’ can enter into it…
… right now, there isn’t any discernible attempt to use tolls as a means of exclusion (and by extension, gentrification). The most I can see is that they are being used (well or poorly) to raise revenue. As such, while your application of the term has the potential to exist with regards to tolls, it doesn’t in this case and doesn’t even seem likely anyway.
… and it’s not my application of the term. I’m jus esplanninn.
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If you assume that most people have to get to Boston on a daily basis for work, then you have to include the cost of commuting to Boston to determine the cost of living in a given area. So you can use tolls to raise the cost of living in a given region of the state, which will force people with lower incomes to live in other parts of the state. As an extreme example, if you had a city with only one good road to Boston and charged a $50 toll on that road, only the very wealthy could afford to live in that city.
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p>Of course, since people don’t have to get to Boston every day to work, this doesn’t entirely work. And cities and towns have other ways that they can raise their cost of living to keep out poor people anyway. Also, the pike serves half the state. It’s hard to believe that the arguments for raising the tolls are coming from elitists that want to force poor people to move to the coast so that they can enjoy western Mass with no poor people.
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p>It looks like the elitist claims are coming from people who are upset that their cost of commuting will be going up. I guess they must like living down the pike too much to be willing to move, even if it would save them several hundred dollars a year. Personally, I prefer living in an urban area and not needing to own a car, but different people have different preferences.
… is that housing costs generally decrease as you get further from Boston, but tolls (at least from some geographical directions) increase. While I certainly agree that tolls could be used as a mechanism to exclude people, as a practical matter, housing does so much more to do that so as to make tolls insignificant. Compare living and working in Boston to living in suburb X and working in Boston. Pretty clear that even with tolls, I’m better off dollar wise (time wise is of course a different and subjective story) in suburb X. Because housing is cheaper to buy in suburb X (or rents are better), the tolls certainly do not dissuade me from that conclusion, and so are ineffective as an ‘elitist’ means to keep me out of the suburbs. If I depend on assisted housing and its simply more available in Boston than in suburb X then that certainly could send me in the other direction, but that has nothing to do with tolls.
If you raise the tolls to $7, that’s certainly going to exclude a lot of people from using it.
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p>If peak pricing means adding a quarter to the charge to use a toll at the peak hours, that’s not elitist. But, from what I’ve been reading, that’s not what people are asking for. The NY tunnels/bridges have been frequently brought forward as an example. Their peak pricing is several dollars more than off peak times. That would exclude certain people from using it who may otherwise need it or who would find it infinitely more convenient to use it, for various (and often valid) reasons.
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p>I honestly don’t see how you don’t find it elitist. People aren’t proposing that quarter here, most of the posts I’ve read here are from people talking upping it several dollars for peak times. If that’s not elitist, I don’t know what is.
… an increase to $x has a market effect on demand for travel, its whether the manipulation of such a market demand represents an attempt by an ‘us vs. them’ crowd to enforce a set of ‘we are better than them’ elitist values. I don’t see that here. I see an attempt (right or wrong, done well or poorly) to collect revenue. If there is no ‘we are better than them’ mechanism at play, where is the elitism? How can that word be applicable?
You don’t know what elitist is.
and I regret it. I was mainly responding to Sean’s framing of his solution in terms of “For those who can afford it, awesome- the rest can go suck an egg”. After all, these are public roads, not the coveted iPhone or a membership at the local country club.
I didn’t even read your comment when I tossed the word around.
Maybe David, Bob and Charley could set some code to automatically replace “elitist” with “silly buzzword” in posts and comments.
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p>When liberals say “elitist” they mean “good for rich people and not so much for anyone else” or sometimes, just “rich people”. When conservatives say “elitist” they mean “ivory tower know-it-all telling the rest of us how to live.” Each refuses to acknowledge the other’s usage, and each doggedly insists on using the word because it can sometimes gain a bit of political traction.
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p>I think, as a result of this dynamic, the word has lost its utility for anything other than red-meat political appealing to the base, which is why its usage in this discussion seems jarring.
… the dynamic of the two meanings that we witnessed during the last several national campaigns.
what do you want us to do? Make up a new word for elitism? I’m sick of having to change words because they don’t test well in focus groups. Increasing the cost of something for a certain period of time and telling those who can’t afford it to ‘fuck off’ and/or change everything, just because there’d be wealthier people able to afford a ‘peak price,’ is elitist, in any sense of the word. The only other word I could come up with is “jackass” and I don’t think that would be anymore helpful or less jarring.
… of using language that is accurate.
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p>http://dictionary.reference.co…
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p>Peak time is good because it’ll make it so only people who can afford it will go at peak travel time, all those poor schmucks that can’t afford it will have to work at home, or come in late, or get a new job somewhere else. This is pretty much stomv & company’s argument. It’s elitist.
… commodity will have the effect of making it available to “only people who can afford it”. The fact that it is true for everything means it is not significant to point out that it is true for any one thing in particular. For purposes of demonstrating elitism, it is a (perhaps) necessary, but (definitely) not a sufficient condition. That is, demonstrating that one fact by itself is not sufficient for proving elitism. How could it be since it’s true of all commodities?
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p>That being said, I direct you to the necessary (and sufficient) criterion for your definition… that there be a belief of superiority. Pointing out that prices affect access does not, by itself, demonstrate a belief in superiority. Hence, if one wants to demonstrate that the term is applicable, more is needed than just pointing out that tolls cost money and affect the demand for travel.
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p>You could make an inference… that the price hike is demonstrative of such a belief, but without some elaboration or some more supporting evidence I find I can’t find such an inference to be tenable. Toll hikes happen all the time all across the country. They surely don’t all infer elitism. therefore this particular toll hike or (or any proposed pricing) would need additional supporting evidence to support a charge of elitism.
with their complete disregard of people who couldn’t change their schedules or habits, because some or even most could. That’s all I really have to say about that.
The people who can’t change their schedules benefit too — they get a much faster commute because other potential drivers will have changed their behavior. They’ll pay more for it to be sure, but they will get a benefit.
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p>As for the amount of congestion surcharge, AFAIK you’re the only one who’s thrown around prices (from $0.25 to a few dollars). To be honest, I have no idea how sensitive MassPike drivers are to congestion charges; it may be that raising the price a quarter during some periods and dropping it a quarter just before and after might be enough to shift use sufficiently.
And I happen to know, quite well, the differences between hitting them at the right time or the wrong one. Visited NY once at the wrong time and damn near didn’t have the cash to get through!
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p>You are awfully hooked on this idea of benefits. I don’t see why you can’t fathom the fact that there will be people who can’t change their schedules – a great many of them – who also won’t “benefit” from any significant peak-price difference. Given that I’m against tolls to begin with (they are bad policy), I don’t think peak price is a fantastic idea, but I could live with it if the differences were small – no more than a quarter, which would amount to a dollar a day for those on the pike (unless I’m missing a toll). A dollar a day is around $300 a year, in addition to the ~$2000 they’d be paying if the proposed hikes go into effect.
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p>All for geography! I’m sorry, but I just can’t get behind any pro-toll policy, anywhere, anyhow. This hike thing really made my blood boil and the only thing that’s going to cool it down is when each and every toll, at least those not on a border, is torn down across the entire freaking state. Enough is enough.
Not sure they’re really subject to the same rules as other consumer goods, as it’s not possible to keep making more roads to create a real “market”. It’s not a true market, right? Would a sudden, drastic hike in the cost of East Boston’s water, while the cost in other neighborhoods stayed the same, be considered “elitist” if it was proposed by the Boston Water and Sewer Commission? I’m undecided as to whether that is the correct word- but people would be pretty pissed regardless. I’ve definitely heard the term applied to things like “sports fees” at public high schools. What if the library started charging an annual $500 membership fee? Elitist, capitalist, or none of the above?
… unfair. Perhaps unjust. As far as needs vs. luxury items, it should be noted that other needs are taxed all the time via a sales tax. Of course, there is no equivalent of food stamps for tolls, but perhaps there could be. Perhaps there could be a needs based special EZ pass. The individual pass could be checked against the license plate by the system so they could report when a pass has been ‘handed off’.
I like that idea, especially if we’re really talking $14 a day, 5 days a week for tolls in the tunnels.
… of course. Someone would have to verify places of address and work. Then there is the record keeping, of course.
1 Posting: Pike E-Z Pass Subsidy Verification Specialist
Salary: $30,000 a year.
Benefits: Your choice of Free tolls or 50% Employer-funded health insurance.
🙂
Sean: I was invited on to talk about toll hikes versus a gas-tax increase. The first time I heard that we were going to be talking about swaptions was when Braude brought them up with the camera rolling. It really had nothing to do with our discussion. I think Jim just thought it was funny that we were all so ignorant.
I don’t catch watch him much.
Do you mean was Braude pulling a bait-and-switch, or trying to trick us? No, I’m sure he wasn’t. There was a swaptions angle to the point I was trying to make – that the investors were supposedly going to call in hundreds of millions of debt if the Legislature decided to cancel the toll hikes and raise gas taxes instead, supposedly because they want the Turnpike Authority to be free to act independently. That’s related to swaptions, but I certainly didn’t need to understand swaptions to argue that such a stand would be outrageous.
… I was wondering if switching subject matter in order to ‘catch’ people in ignorance was a standard tactic of his. I don’t watch him often enough to know.
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p>Thanks.
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p>The swaptions topic is a complete red herring, and has NOTHING to do with creditors calling the bonds in the event of toll repeal.
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p>The bonds are secured by net toll revenue. Kill the revenue; kill the underlying security for the bond holders. Removing the underlying security is equal to a covenant breach. Covenant breach allows the bondholders to call. The right to call probably means bankruptcy.
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p>I’ve just described a doomsday scenario that’s easily mitigated: should the Legislature pass the gas tax, they simply pull all the tolls, some of the tolls, whatever… and substitute, with creditor agreement, the now missing toll revenue with a dedicated gas tax revenue.
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p>The swaps were just a financing technique to wring some more up front cash from an existing debt obligation, and the technique went awry when the re-finance market tubed. The swaptions are side show really. Costly, yes, but not the center ring.