Congestion Pricing

A Primer:

Metropolitan Planning Organization

Case Studies
Quality Assurance Statement

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information to serve Government, industry, and the public in a manner 

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Contents

Introduction 2

Background 2

The Dallas / Fort Worth Case Study 4

Road Pricing Policies Grew Out of the Planning Process 4

A Wide Range of Pricing Options 4

Innovative Strategies 4

Regional Perspectives 5

Prepare for the Unexpected 6

Communications and Consensus-Building Take a Lot of Work 6

Summary 7

The Puget Sound Region Case Study 8

A Comprehensive Long-Range Vision Grows out of Individual Projects 8

Road Pricing Becomes an Integral Component 9

Societal Considerations 10

A “Reasonably Foreseeable” Revenue Source, or a Big Risk? 10

Effective Communication to Aid Informed Decision-Making 11

Summary 11

Minneapolis/St. Paul Region Case Study 12

Two Decades of Interest in Pricing 12

A Decade of Trial and Error 12

Road Pricing Revenue Policy 13

Communications and Consensus-Building 14

Managing Risk through Incremental Development 15

Summary 15

San Francisco Bay Area Case Study 16

Years of Planning Give Rise to Road Pricing 16

Challenges and Consensus-Building 18

Societal Considerations 18

Communications 19

Summary 19

Lessons Learned 20

Regional Road Pricing Policy Grew from Individual Projects 20

Effective Communication Is a Challenge Everywhere 20

Pricing as One Element of a Cohesive Transportation Plan 20

Developing the Right Tools for the Job 20

References 22

Dallas/Fort Worth Region Case Study 22

Puget Sound Region Case Study 22

Minneapolis/St. Paul Region Case Study 22

San Francisco Bay Area Case Study 23
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Introduction

Background

The Intermodal Surface Transportation Efficiency Act 

of 1991 (ISTEA) and the Clean Air Act Amendments 

of 1990 (CAAA) are responsible for significantly

restructuring the transportation planning process 

across the nation. In order to receive Federal funds, 

roadway construction or other roadway capacity enhancements must show that the completed project will 

not result in deterioration of the region’s air quality. To 

achieve this, a region must have as one of its goals a balanced transportation system that provides mobility

options across all potential travel modes. 

ISTEA also established a new direction for transportation programming across the Nation: for the first time, 

metropolitan areas were asked to develop a seamless intermodal transportation network that improves air quality and is energy efficient. These metropolitan programs 

would then be linked to State plans and ultimately a national system that would provide a multi-modal transportation network for the entire country. 

ISTEA also provided funding for the innovative 

Congestion Pricing Pilot Program, which encourages 

implementation and evaluation of road pricing pilot projects to manage congestion on highways through tolling 

and other pricing mechanisms. 

Since that time, road pricing has come to be considered 

by more and more regions as a potential solution to the 

dual challenges of declining revenues and increasing congestion. The concept is based on the idea of charging a fee 

for access to and use of a lane, road, area, or regional network for purposes of generating revenue, managing traffic congestion, or both (see the box below).

Road pricing is called “congestion pricing” when prices 

are tailored to manage congestion by using a fixed timeof-day schedule or a dynamic system which increases or 

decreases individual vehicle charges based on congestion 

levels. 

Road pricing in the United States is new and not well understood by the general public and elected officials. The 

most common form of road pricing in the United States 

has been high-occupancy toll (HOT) lanes. HOT lanes 

are converted high-occupancy vehicle (HOV) lanes that 

are opened to vehicles with fewer occupants than is normally required in exchange for a toll.

Similarly, road pricing may also take the form of “express 

toll lanes,” where new lanes are built adjacent to existing 

freeways, but their use is subject to a toll.

Road pricing experiments in Europe and Asia have involved “zone pricing,” where drivers are charged a fee to 

enter into and/or drive within a specified high-congestion location. Some zones’ access or use fees are regulated 

by time-of-day, but others have full-time fees in effect.

What Is “Congestion Pricing”?

Congestion pricing – sometimes called value pricing – is a way of 

harnessing the power of the market to reduce the waste associated with 

traffic congestion. Congestion pricing works by shifting purely discretionary rush hour highway travel to other transportation modes or to 

off-peak periods, taking advantage of the fact that the majority of rush 

hour drivers on a typical urban highway are not commuters. By removing 

even 5 percent of the vehicles from a congested roadway, pricing 

enables the system to flow much more efficiently, allowing more cars to 

move through the same physical space. There is a consensus among 

economists that congestion pricing represents the single most viable 

and sustainable approach to reducing traffic congestion.

Source: FHWA, Congestion Pricing, A Primer: Overview,

FHWA-HOP-08-039, (Washington, DC: October 2008).
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As states and regions consider ways to address declining 

revenues from the motor fuel tax, the concept of distance pricing – charging drivers for each mile they drive 

on the highway system – is being discussed more and 

more. This is often referred to as vehicle miles traveled 

(VMT) fees, or mileage-based user fees. These are typically seen as a revenue mechanism, but could also incorporate a congestion-pricing component. Congestion pricing is perceived by many transportation operations 

professionals as a tool to manage user demand. Currently, 

there is typically unused capacity on arterial and transit 

facilities at the same time that the freeway structure is 

being overwhelmed by volume. By charging a fee to use 

the most over-used element of the transportation network, operators seek to encourage road users to seek out 

alternative routes or modes of transportation, evening 

out the distribution of goods and people being transported within a network at the same time.

Road pricing often has come about separate from the traditional metropolitan planning process through pilot 

projects and demonstrations. As the ISTEA-funded pricing demonstration projects have shown road pricing to be 

an effective tool, there is a growing need to incorporate 

road pricing into long-range plans.

This document summarizes the results of a study to examine how road pricing was incorporated into long-range 

planning in four metropolitan planning organizations 

(MPOs), providing examples that could support other regions seeking to do the same. 

The four case study regions were selected by the Federal 

Highway Administration (FHWA) based on a previous 

study, A Domestic Scan of Congestion Pricing and Managed 

Lanes [1] and represent places where road pricing has been 

included in long-range plans successfully: the Dallas/Fort 

Worth region, the Puget Sound region, the Minneapolis/

St. Paul region, and the San Francisco Bay area.

Not surprisingly, the study of these four regions reveals 

that each is unique, with its own distinctive history of attitudes, jurisdictional relationships, and politics that influences how pricing is perceived.

Figure 1. Types of Road Pricing

Road Pricing

Whole Facility 

pricing

lane pricing zone pricing Distance 

pricing

Area VMT Fees

Pricing

Cordon 

Pricing

Express 

Toll

Lanes

HOT 

Lanes 

(managed 

by HOV 

lanes)

Toll 

Existing 

Roads, 

Bridges, 

Tunnels

New Toll 

Roads, 

Bridges, 

Tunnels

Note: Any of these can use “congestion pricing” or “variable pricing” to achieve policy objectives.
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The Dallas / Fort Worth Case Study

Road Pricing Policies Grew Out 

of the Planning Process

The financial constraints and requirements of ISTEA led 

the North Central Texas Council of Governments 

(NCTCOG) to look aggressively at tolling as a means to 

finance its extensive highway expansion needs, and the 

result was a policy to consider whether corridor improvements could “support” pricing. 

NCTCOG started by assuming that all new capacity 

could be priced. It then approached the financial aspect 

by looking at the priced and non-priced transportation 

system as a whole. NCTCOG recognized that each project did not necessarily have to pay for itself, but looking 

at the system as a whole, toll revenue becomes a revenue 

source that can be used to reduce overall public expenditures. The result of this perspective is a NCTCOG policy that all new limited access highways should be evaluated for toll potential and all reconstructions should 

include priced express lanes as appropriate.

NCTCOG sees pricing as a tool to achieve objectives 

such as supporting economic vitality, increasing safety, 

increasing accessibility and mobility, and promoting environmental protection. The latter aspect was of particular pertinence to NCTOG, since the region was in nonattainment status due to its poor air quality.

When considering plan options, NCTCOG realized that 

pricing by itself won’t necessarily change behavior, but it 

can work with other elements of the plan to achieve 

transportation and environmental objectives. 

The NCTCOG policies that are in Mobility 2030: The 

Metropolitan Transportation Plan for the Dallas/Fort Worth 

Area, 2009 Amendment[2] are the result of years of projects evolving to the point that the need for consistent 

policy relating to toll setting and use of revenue became 

clear. These policies are described below.

A Wide Range of Pricing Options

There are three types of priced facilities being considered in the region: traditional toll roads, managed HOV 

lanes (called HOT lanes in other places), and stand-alone 

express managed lanes which may or may not have HOV 

priority (see Table 1). Over time, all three types should 

have a managed component to them, i.e., price differentials by time of day, vehicle type, occupancy, technology. 

Notably, the Regional Transportation Council (RTC)1 

stated clearly in Mobility 2030 that it does not support 

converting existing free lanes to toll roads. Only new 

lanes on existing gas-tax funded highways will be tolled, 

since it is against existing policy to turn existing free 

lanes into toll lanes.

Innovative Strategies 

The excess revenue from priced facilities is available to 

fund projects on the entire transportation system including other toll facilities, non-toll facilities, and transitrelated projects. Excess revenue over and above construction and maintenance / operations expenses is split along 

the concept of “near neighbor, near timeframe.” This 

policy is defined as follows:

• Near neighbor:

» Seventy-five percent of revenue stays in the county 

where the revenue is collected; and

NCTCOG has a policy that all new limited access highways should be 

evaluated for toll potential and all reconstructions should include priced 

express lanes as appropriate.

1 The Regional Transportation Council is the independent transportation policy body of the metropolitan planning organization.
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Existing Committed Planned

Toll Roads, Bridges, and Tunnels

•	 Dallas North Tollway

•	 President George Bush Turnpike (PGBT)

•	 Sam Rayburn Tollway

•	 Addison Airport Toll Tunnel

•	Mountain Creek Lake Toll Bridge

•	 Lewisville Lake Toll Bridge

•	 SH 161, Traditional toll road, under

construction

•	 SH 121 (Sam Rayburn Toll-way), part

open, part still under construction

•	 Trinity Parkway, new toll road

•	 Southwest Parkway, new toll road

•	 President George Bush Turnpike

•	 Extension, toll road

•	 SH 360 Extension, toll road

•	 Add main lanes on SH 170, toll road

•	 Loop 9 between I-20 and SH 287, toll road

Managed HOV Lanes

•	 I-30 managed HOV lane, new lanes

•	 I-635 (LBJ Freeway) and I-35E

•	Managed HOV lanes, new lanes

•	 North Tarrant Express, managed HOV

lanes, covering routes 183, 820, 35W

Express Managed Lanes

•	 DFW connector, including four miles of

express managed lanes

Source: North Central Texas Council of Governments, via interview.

Table 1. Existing, Committed, and Planned Road Pricing Projects in the Dallas/Ft. Worth Area

» Twenty-five percent of revenue goes to the rest of 

the region based on the distribution of home locations of toll tag users in January of that year.

• Near timeframe:

» Seventy-five percent up front; and

» Twenty-five percent over time.

One exception is the North Texas Tollway Authority 

(NTTA) concession for SH 121, which was paid 100 percent up front. Policies for using the money are established 

in advance of each transaction under the general guidelines described above. NCTCOG has developed a set of 

business terms for tollways and managed lane projects 

resulting in consistent policies regarding: 

• Specific toll rates for peak and off-peak periods;

• Treatment of transit vehicles;

• Toll increase provisions;

• Use of comprehensive development agreements 

(CDA); and 

• Disposition of excess revenue.

Regional Perspectives 

ENVIRONMENTAL JUSTICE (EJ) has been a significant regional issue for decisionmakers, and NCTCOG 

has worked extensively with FHWA, Texas Department 

of Transportation (TxDOT), and others to address this. 

NCTCOG has an environmental justice analysis tool 

that evaluates trip distribution effects and looks at 

whether people who live in communities that use toll facilities also have access to free facilities. 

An emerging view on the environmental justice topic is 

the importance of evaluating not just who is paying tolls, 

but how the money is spent. In the case of the NCTCOG 

region, excess revenues are spent entirely on non-toll 

projects such as other non-tolled highways or transit. 

This spending mitigates potential environmental justice 

concerns. Also, NCTCOG has found that people with 

low income sometimes place a high value on time because of inflexible job and childcare schedules. 
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Prepare for the Unexpected

The State and region have built in a variety of backstops 

to guard against the unexpected.

Revenue Shortfalls

One of the biggest concerns has to do with toll revenues 

being lower than expected. In the case of managed lanes, 

the region has tried to shift as much revenue risk as possible to the private sector. However, the traditional toll 

roads that will be built will be public projects, meaning 

that there is no risk transfer.

NCTCOG believes that its toll rates are set conservatively low, at about half the revenue-maximizing rate, allowing them to raise tolls if needed. NCTCOG and TxDOT 

are considering guaranteed debt service repayment for 

NTTA’s Southwest Parkway and SH 161 projects in the 

event of lower than expected revenue collections in early 

years of those facilities. NTTA’s system revenues are 

needed for current construction commitments, which 

normally would be cross-pledged to new projects.

NCTCOG may put aside some programming authority 

from SH121 revenues (state dollars, kept in the state treasury for assignment to projects by NCTCOG) to use as a 

form of debt service reserve. This would allow NTTA to 

issue debt with higher bond ratings and make more money available for project funding. 

NTTA would own the roads in question like any other of 

their properties. The difference would be that debt issued to finance these two roads also would have a financial commitment from NCTCOG and TxDOT to offset 

revenue shortfalls. These advanced funds would then be 

repaid with future revenues.

Revenue Leakage

With modern open-road tolling applications, there is an 

increased temptation for drivers to try to get away without paying tolls. In response to this, the region is developing administrative courts to deal with toll violators to 

avoid clogging up the regular courts.

Operations

Managed lanes have now been tested in several markets 

around the United States, and there is a reasonable understanding of how to optimize flow and avoid congested 

premium lanes. However, each region is unique, and this 

risk is being managed by setting toll rates by time of day, 

as opposed to dynamically based on traffic levels. Once 

there is a history of the demand profile, dynamic pricing 

will be tried. 

Communications and 

Consensus-Building Take

a Lot of Work

In terms of its relationship with the public, NCTCOG 

uses a full array of communication tools, including press 

releases, web presence, and presentations. However, even 

though NCTCOG and TxDOT have been talking about 

the concept of pricing and tolling for years, they find that 

the public and policy-makers still have difficulty understanding all of the nuances of the concept. Once projects 

open however, they find that the complaints stop. For example, when the first tolled segments of SH 121 opened 

in 2007, NCTCOG did not get many complaints; rather, 

the feedback was positive since people had the new highway alternative. 

Photo credit: d. hughes
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People have understood for years that there is not adequate revenue from traditional sources to build the highways and highway lanes that need to be built, so there has 

been acceptance of tolling for new highways and pricing 

for highway expansion, but the region still struggles with 

the concept of how many toll roads and freeways will create the right balance.

The fact that the NCTCOG’s road pricing policy is applied consistently throughout the entire region is also 

helpful to the communication effort.

One challenge, however, has been the complaint of “double taxation.” Many feel that the State and local taxes 

they pay already should cover the costs of building and 

maintaining the transportation system. NCTCOG approaches this objection with the information that with 

managed lanes, there will always be a free option, so 

NCTCOG anticipates that the projects will generally 

earn public acceptance once the information is out in the 

public. In addition, NCTCOG staff believe that other 

considerations have contributed to their success so far: 

• Consistent staff at NCTCOG working on these issues 

for 20 years. If the staff had changed over more frequently, the job would have been more difficult;

• Strong analytical foundation through improving 

modeling tools;

• Consistent message with respect to the benefits of 

pricing;

• Policy coordination with elected officials; and

• Desire to create a sustainable transportation system 

while acknowledging that there is not enough money 

from traditional sources.

Despite its successes, the region has had to face public 

and elected-official backlash emerging out of the aggressive pursuit of public-private partnerships a few years 

ago. In 2007, the Texas legislature imposed a two-year 

moratorium on new partnerships (called Comprehensive 

Development Agreements, or CDA) that impacted further toll development. Many CDA that were underway 

were grandfathered and not impacted by the moratorium, but the legislation still created uncertainty.

Summary 

An early adopter of tolling, the Dallas/Fort Worth region 

has continued to pursue aggressively road user fees as a 

means to fund its extensive backlog of transportation 

projects. In recent years, the region has embraced new 

notions of managed lanes as a means of achieving highway expansion. With the region’s citizens already are familiar with tolling, it has been relatively easy to advance 

new toll projects, since those toll projects bring with 

them new transportation options. Acceptance grows 

once the projects open. The jump to managed lanes is not 

without its controversies, but given the experience with 

tolling in the region, is not as difficult as it may be in areas 

without a history of tolling. 

As the region moved from individual project development to more widespread use of tolling and managed 

lanes for all highway expansion, it also proceeded to incorporate a consistent set of rules in its regional transportation plan. The region has had to address issues such as 

how to spend excess revenue and whether road pricing 

projects unfairly impact poorer populations, and it has 

successfully developed policies and evaluation tools in 

response. 

What sets this region apart from the other case study regions is the extent to which new highways and new capacity are a part of the transportation landscape. The 

other case study regions are more focused on traffic management than new capacity.
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The Puget Sound Region Case Study

A Comprehensive Long-Range 

Vision Grows out of Individual 

Projects

In the mid-1990s, Washington State was among the first 

to look seriously at public-private partnerships (PPP) to 

advance high-cost/high-need projects, and one project 

emerged from the process – construction of a second 

span of the Tacoma Narrows Bridge, which would be 

supported by toll revenues. Although the project evolved 

from being a concession-style public-private partnership 

to a more common design-build approach, the result was 

a new toll bridge in an existing toll-free corridor. 

While tolls had been commonly used in Washington to 

finance bridges in the past, there had been no tolls in the 

State since 1979. The Tacoma Narrows Bridge project 

also was notable in that it was the first time a toll had ever 

been added to an existing toll-free corridor (although 

the new toll was technically only on the new bridge, 

which served the southbound direction) in the region. 

The next individual project to emerge was a four-year 

HOT lane demonstration on SR 167, which opened in 

2008, supported by the Value Pricing Pilot Program.

At the same time, the Washington State Department of 

Transportation (WSDOT) continued to look at options 

for replacing the SR 520 floating bridge – a multibilliondollar project with a substantial shortfall in funding. 

Tolling, potentially with time-of-day pricing was under 

study as a possible solution.

When the U.S. Department of Transportation (U.S. 

DOT) announced its Urban Partnership Agreement 

(UPA) grant program in 2006, a collaborative group comprising the region, State, and King County applied for a 

grant that would allow time-of-day tolling on the existing SR 520 Bridge in advance of construction of a new 

bridge as well as active traffic management and other 

complementary actions. Tolling on the existing bridge 

will begin during the summer of 2011. 

While these projects were being studied, designed, and 

built, the State Legislature began to examine whether 

and how tolling and road pricing might fit into the future 

of transportation in Washington State. Some of the 

groundwork for this had been laid by a prior State 

Secretary of Transportation who was a passionate believer in the potential for congestion pricing to allow the 

road network to operate at maximum capacity. The result was a Comprehensive Tolling Study that considered 

a broad range of policy motivations and applications, 

evaluated institutional and technical considerations, 

considered a variety of case studies, and resulted in eight 

policy recommendations that were mostly adopted by 

the legislature.

In parallel, the Puget Sound Regional Council (PSRC) 

received a Value Pricing Pilot Program grant to conduct a 

traffic choices study to see how travelers change their 

travel behavior (number, mode, route, and time of vehicle trips) in response to time-of-day variable charges for 

road use (variable or congestion-based tolling). The traffic choices study received a great deal of public attention 

and provided valuable behavioral information to feed the 

PSRC’s travel demand model for better analysis of road 

pricing.

These prior experiences and history of discussion laid 

the groundwork for further discussion of pricing in the 

PSRC’s long-range plan update called Transportation 

2040. Recognizing the potential role that pricing might 

play in the long-range plan – and acknowledging that 

road pricing deserved a long, hard look – PSRC created a 

Pricing Task Force as part of the update process. The 

driving factors behind the use of tolling and road pricing 

in the plan were the need for non-tax financial resources 

and the desire to use price to modify travel behavior. 
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The Puget Sound Traffic Choices Study

In 2002, the Puget Sound Regional Council (PSRC) conducted a pilot project to see how travelers change their 

travel behavior in response to variable charges for road use. The project, called the Traffic Choices Study, 

placed global positioning system (GPS) tolling meters in the vehicles of about 275 volunteer households. The 

project involved observation of driving patterns before and after experimental tolls were charged for driving on 

any of the major freeways and arterials in the. The observed response of drivers to tolls suggests there is a 

dramatic opportunity to significantly reduce traffic congestion and raise revenues for investment.

Some of the primary conclusions from the study include:

•	 Motorists made small-scale adjustments in travel that, in aggregate, would have a major effect on transportation system performance.

•	 When approached systematically, variable road tolling, with investments of toll revenues, could make 

excessive reoccurring congestion a thing of the past.

•	 The scale of the revenues confirms the theoretical expectation that “optimal” tolls would support expanding 

transportation supply when and where it is needed most.

•	 While most revenues are generated on a small portion of the toll roads, the secondary road network 

(arterials) should not be ignored, as diversion causes real problems with revenue loss and displaced traffic.

•	 Users demonstrating a willingness to pay for high value roadways could expect that improvements would be 

forthcoming.

•	 Done right, network tolling could provide broad benefits, including lower vehicle emissions, fewer accidents, 

travel time savings, improved roadway performance reliability, and lower operating costs. 

•	 A conservative analysis of the benefits of network tolling in the Puget Sound region indicates that the 

present value of net benefits could exceed $28 billion over a 30-year period.

•	 Installing in-vehicle tolling devices is a costly logistical challenge, but relying on equipment to come standard 

with new automobiles won’t be practical if it doesn’t represent a trusted platform for road tolling. 

•	 The costs for GPS-based tolling systems are dominated by the initial investment in in-vehicle tolling equipment, and the communication of data during operations. Over the last few years, costs have declined 

dramatically and are expected to continue to come down.

— The Puget Sound Regional Council 

Traffic Choices Study – Summary Report A Global Positioning System Based Pricing Pilot Project: Evaluating 

Traveler Response to Variable Road Tolling Through a Sample of Volunteer Participants (Seattle, WA: 2008)

Road Pricing Becomes an 

Integral Component

As Transportation 2040 evolved, all of the plan alternatives had a pricing component. According to PSRC: 

Transportation 2040 promotes transportation financing 

methods, such as user fees and tolls that will sustain maintenance, preservation, and operation of facilities and reflect the costs imposed by users.

• The plan recommends a phased financial strategy 

based on less dependence on revenue from current gas 

taxes and other traditional transportation revenue 

sources. The new financial strategy calls for moving toward the implementation of new user fees, including 

tolls, exploration of a fuel tax replacement, such as vehicle-miles traveled (VMT) charges, and other pricing approaches to fund and manage the transportation system. The financial strategy assumes a nexus between 

the tax, fee, or toll and the use of the revenues.

• The plan assumes the strategy of implementing tolls will 

start with developing high occupancy toll (HOT) lanes 

and tolling on individual highway and bridge facilities 

as they are built. The Plan also gave guidance for the 

strategy to remain flexible and accelerate the implementation of tolls earlier than 2020 wherever feasible.2

2 Puget Sound Regional Council, “Transportation 2040 Frequently Asked Questions,” available at http://psrc.org/assets/3175/FAQs.pdf
10 | C o n g e st i o n P r i c i n g

The PSRC General Assembly adopted Transportation 

2040 in May 2010. Although pricing is a key feature in 

the plan, much more work is needed to implement a pricing policy, including State legislation. In the meantime, 

the following road pricing projects are in the pipeline:

• Nearing Commitment:

» I-405 HOT lane corridor, as an extension of SR 

167 HOT lane as a one-to-two-lane HOT system 

with likely approval in 2011.

• Proposals:

» SR 509 Extension as a toll road;

» SR 167 Extension as a toll road; and

» Alaskan Way Viaduct replacement as a toll road.

Societal Considerations

AIR QUALITY CONFORMITY was not an issue in the 

PSRC region, but greenhouse gas emissions were a big 

concern. A desire to be serious about greenhouse gas 

emission reductions, spurred on by a legislative mandate 

for significant reductions in greenhouse gas emissions 

over the next several decades, turned out to be a big incentive for many stakeholders to consider road pricing. 

THE CONCEPT OF “EQUITY” was challenging to assess because it was difficult to define. Equity was a concern, however, and dictated how plan alternatives were 

analyzed and presented. PSRC examined equity in four 

ways: 1) the geographic distribution of benefits and adverse impacts by county and county subarea, 2) the distribution of benefits and adverse impacts by income 

groups, 3) the distribution of benefits to freight and passenger vehicles, and 4) an accounting and comparison of 

benefits of investments to minority and low-income residents.

A “Reasonably Foreseeable” 

Revenue Source, or a Big Risk?

Financial conformity was also an issue when it came to 

defining sources of revenue for the financially constrained plan. As plan alternatives were developed, PSRC 

sized the extent of its transportation improvement plans 

to the amount of revenue anticipated to be realized 

through road pricing mechanisms. Since the plan alternatives (and the preferred alternative) all relied on a new, 

untested source to generate revenue, however, some, including the FHWA, questioned the reliability of the road 

pricing revenues as a resource to fund transportation system improvements. In addition, road pricing as a revenue 

source had not yet been authorized by the State and 

would require additional Federal approvals. As such, 

road pricing might not be a “reasonably foreseeable” revenue source. 

PSRC staff reasoned, on the other hand, that even though 

other revenue sources such as increased gas taxes had a 

history, there was little inclination to increase them to 

the amounts needed to fund needed highway expansion. 

Therefore, any increase in revenue, whether from a new 

source or an existing source, would be equally risky. 

Revenue Allocation Policies

PSRC has a clear policy to balance revenue with investments. PSRC expects that over time, pricing revenue 

would be offset by reductions or eliminations of other 

revenue sources. According to PSRC staff, there was a 

“general understanding” that a certain portion of toll revenues would go to transit, but the details of this policy 

have to be worked out in the future.

Washington State has a constitutional restriction on the 

use of motor fuel taxes for anything other than the highway system (called the 18th amendment). This restriction does not affect toll revenue, but current legislative 

policy does limit toll revenue to be spent in the corridor 

in which it was raised, with some flexibility for the 

Legislature to decide on a case-by-case basis to include 

non-highway expenditures such as local arterials or transit programs in the definition of the highway corridor.

While PSRC successfully developed several new evaluation tools, well beyond what had existed before either in 

the region or elsewhere, the additional capabilities 

“When approached systematically, variable road tolling, with 

investments of toll revenues, could make excessive reoccurring congestion a thing of the past.”

—Traffic Choices Study

Summary Report 
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caused some participants in the planning process to be 

even more critical of the analytical shortcomings of the 

new system. There was a great deal of new information 

to absorb, and there were many subtleties that were difficult to comprehend. In the end, PSRC staff had to remind policy-makers that data is meant to aid them, and 

that choices must be made based on these leaders’ best 

judgment. 

Effective Communication to Aid 

Informed Decision-Making

Treating tolling and pricing as an integral part of plan development was important to the success of PSRC’s process. PSRC realized that it could not fund transportation 

in the same ways it had in the past, so was more open to 

ideas such as VMT fees and tolling. Once the public understood how the current system was unable to meet the 

needs of the system and its users, there was more openness to pricing and tolling alternatives. The decision to 

create the Pricing Task Force opened the door to discussions about pricing issues and allowed conversations 

about pricing to move forward.

The message that PSRC found most difficult to communicate was an explanation of how pricing would contribute to congestion reduction. PSRC introduced new 

methods of measuring the value of different investments 

during the plan update that were difficult for people to 

understand, with the concept of monetizing benefits 

and costs being particularly challenging to convey. 

Ultimately, however, these measures successfully enabled participants in the planning process to understand 

the value of different packages. In particular, the new 

benefit/cost measures highlighted the fact that congestion had a cost, which encouraged those involved in the 

planning process to take a fresh look at transportation 

problems and their solutions in non-traditional ways.

In addition, individual projects (SR 520, Tacoma 

Narrows Bridge, and SR 167) were already in progress, 

enabling PSRC to point out that the region was in fact 

using pricing already. This silenced many misgivings 

against the idea.

Tolling individual projects did not seem to be a big issue, 

but tolling the whole network was more difficult for 

those involved in the process to grasp and accept. With 

15 years of pricing debate, the professionals knew that 

pricing could be an effective way to achieve their goals, 

but PSRC was worried that “leading with pricing” would 

be dangerous, sending a message to the public that the 

decisions were already made. A clear champion for pricing was a former chair of the Washington State 

Transportation Commission, who was well respected by 

decision-makers. His support allowed road pricing as a 

concept to be taken seriously rather than treated as a 

fringe theory.

Although PSRC did not encounter any communications 

“brick walls” to speak of, communicating full system 

pricing was a challenge. Also, there were quite a few

single-issue stakeholders: those who believed that pricing 

was “the answer” did not seem to care about economic 

development, while others focused more on transportation system effectiveness and economics.

Summary 

Road pricing in the Puget Sound region incubated over 

the course of almost two decades, starting with a few individual projects, and culminating with a long-range transportation plan that calls for the most extensive application 

of road pricing for both revenue and traffic management 

in the United States. The process was not without its setbacks, but a combination of leadership by high profile 

elected officials and appointees, and willingness to expend 

the resources to develop and apply state-of-the-art analytical tools provided a strong base from which to advance. 

Analysts also took the time and made the effort to communicate their findings and work with stakeholders over 

the years. This contributed to increased public understanding of the implications of both action and inaction 

with respect to the region’s transportation system.

Problematic Communications

PSRC experienced problems communicating the concept of parking 

pricing because the public, stakeholders, and policy-makers did not 

understand it. The parking pricing idea was supposed to be a surcharge 

applied at the regional level to dampen demand and raise substantial 

revenue, but audiences pushed back because they were concerned that 

these measures would be difficult to apply at a regional level and would 

require more detailed analysis than was possible in this plan update. 

PSRC ended up pulling back substantially on this concept.
12 | C o n g e st i o n P r i c i n g

Minneapolis/St. Paul Region Case Study

Two Decades of Interest

in Pricing

Pricing policy began to be mentioned during the 1992-

1993 period in Metropolitan Council planning documents3

 as an option for consideration following a directive from the State Legislature instructing the Minnesota 

Department of Transportation (Mn/DOT) and the 

Metropolitan Council (the region’s MPO) to study and 

implement, where appropriate, congestion pricing, toll 

roads, and a mileage-based tax. 

The State recognized the potential public acceptance 

hurdles around road pricing and encouraged a public outreach process to begin discussion of the concept. At the 

direction of the legislature in 1995, Mn/DOT and the 

Metropolitan Council undertook the Minnesota Road 

Pricing Study that included a comprehensive public outreach process using such techniques as a citizens’ jury, focus groups, opinion leaders survey, personal interviews, 

and a telephone survey. The process was designed to uncover acceptability issues and frame acceptable pricing 

options. The results of the study indicated some support 

for road pricing depending on how the collected revenues 

are used and what those revenues replace or supplement.

A Decade of Trial and Error

Advocates at Mn/DOT first proposed I-394 HOT lanes as 

a demonstration project in 1997. However, lack of sufficient consensus, especially among legislative and local decision-makers, combined with lack of public support, led to 

failure of the proposal. In 1995-1996 Mn/DOT launched 

the TransMart Public-Private Partnership (P3) Toll Road 

Initiative. The proposal was blocked by a State law that allowed any community in the path of a toll road to have 

veto power, a power exercised by one such community.

In 2000/2001, a Value Pricing Advisory Task Force was 

formed that included State legislators and city officials, enabling consensus to form around testing pricing on the 

underutilized HOV lane on I-394. Complementing the 

Advisory Task Force’s efforts was the I-394 Express Lane 

Community Task Force, which was formed to help citizens and stakeholders fully understand the project and its 

goals and to provide an effective vehicle to give advice and 

guidance during project development. Through this process, task force members became an informed voice for the 

project and an essential part of an extensive education, 

outreach, and public involvement process that became 

critical to the success of the I-394 MnPASS project.

The influence of the Advisory Task Force recommendations and the recognition that pricing should be tested in 

the Twin Cities Region led directly to the introduction of 

legislation authorizing conversion of HOV lanes to HOT 

lanes. With that authorization, and with support of both 

the Governor and Legislature, Mn/DOT launched the 

I-394 MnPASS HOV lane conversion to a HOT lane.

The Federal Value Pricing Pilot Program supported the 

demonstration project on I-394. The I-394 express lanes 

opened in May 2005 and involved conversion of existing 

underutilized HOV lanes over a distance of about 9 

miles in one direction and 12 in the other. The lanes are 

dynamically priced during peak hours in the peak direction and remain free to buses, 2+ HOVs, and motorcyclists. The lanes are free to all users during off-peak periods (and in the nonpeak direction during the peak 

periods). The I-394 project goals are to maintain traffic 

flow and alleviate congestion in the corridor. Fifty percent of net revenues after payment of capital and operating costs are to be dedicated to transit.

3 The Metropolitan Council is the regional planning agency serving the Twin Cities seven-county metropolitan area.
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While the I-394 MnPASS lanes were being implemented, 

Mn/DOT undertook the MnPASS System Study, which 

examined the potential for a system of toll lanes without 

HOV priority to relieve congestion. The study resulted in 

a memorandum of understanding between Mn/DOT 

and the Metropolitan Council to consider tolled express 

lanes in all expansions of the highway system.

In September 2009, building on public support of I-394, 

the I-35W express lane opened, with 2+ carpools being 

free and dynamic pricing in the peak periods. A portion 

of the 16-mile-long facility uses a converted shoulder 

lane available at the most congested times. Potential express lanes are being investigated on other corridors.

Pricing Experience Influences a

Long-Range Plans

The Metropolitan Council’s 2030 Transportation Policy 

Plan (TPP) encourages pricing in tandem with a mix of 

strategies, including: 

• HOT lanes;

• Bus-only shoulder lanes; and 

• Priced dynamic shoulder lanes to mitigate congestion.

Pricing options also appear under optimizing Highway 

Performance, Pricing, Multimodal Investment, 

Multimodal Systems, and Optimizing Trunk Highways.

While pricing is one of the five “key components” of the 

TPP to cope with “limited resources” and is cast as fully 

consistent with stated transit and HOV strategies, road 

pricing revenues are a secondary motivation; the primary 

motivation is efficiency, mobility, and congestion management. As a result, the main justifications for pricing 

derive from the Congestion Management Plan.

The TPP projects the needs and capabilities of the highway system 50 years into the future. In the context of a 

long-range plan, pricing and managed lanes are important components. The Transportation Finance section of 

the TPP also references pricing as among priority strategies for obtaining Federal contributions to multimodal 

efforts.

In late 2009, the Metropolitan Council and Mn/DOT 

began collaboration on two related efforts aimed at creating short- and long-term visions for the highway system 

in the Twin Cities region with the intent of informing 

another TPP update. The goal of the first study was to 

identify methods and improvements to achieve the 

greatest efficiency from the region’s highway system and 

manage congestion from a system-wide perspective. 

Rather than focusing on building capacity alone, the new 

strategy will focus on improvements that build on existing management strategies and provide relief to identified problem areas throughout the system.

A second study was intended to analyze and make recommendations for the next generation of MnPASS managed lane projects. Whereas the first study focused on 

the long-term perspective, the second focused on shortterm implementation opportunities (2-10 years). 

Based on the analysis performed, a long-term vision for a 

managed lane system was developed and has been included in a TPP update that was formally adopted in 

November 2010. The draft TPP update calls for developing managed lane corridors either within the existing 

right-of-way, or with minimal additional right-of-way. 

The managed lane vision includes almost 102 miles of 

managed lanes, but these are not funded. The fiscally 

constrained plan calls for funding of a 3.9-mile I-35E 

MnPASS lane and other, unspecified MnPASS projects.

Road Pricing Revenue Policy 

On the I-394 HOT lane, Minnesota Statute specifies that 

excess revenues (after capital, and operations and maintenance costs) are to be devoted to capital improvements 

in the corridor and to transit enhancements in the priced 

corridor on a 50/50 basis. On the I-35W UPA project, 

revenue also is dedicated to corridor transit and capital 

improvements by formula.

Roles of Agencies

Mn/DOT has had a sustained interest in congestion pricing and has consistently devoted staff resources to the 

topic. Mn/DOT staff working on intelligent transportation systems (ITS) introduced the idea of road pricing, 

conducted studies, and worked with the University of 

Minnesota over several years, waiting for the right opportunity to propose road pricing. 

Pricing is one of the five “key components” of the Twin Cities’ 

Long-Range Plan to cope with “limited resources” and is cast 

as fully consistent with stated transit and HOV strategies.
14 | C o n g e st i o n P r i c i n g

The Metropolitan Council has worked together with 

Mn/DOT over the years in the planning for toll lanes. 

Generally, strategies planned for implementation in a 

corridor or subarea must be accepted by Mn/DOT and 

adopted by the Council as consistent with the policy 

plan. As the region’s transit operator, the Metropolitan 

Council also is a stakeholder with respect to transit operations in priced corridors. 

In terms of the Federal role, the VPPP provided pivotal 

support for the I-394 HOT lane project and the Federal 

UPA grant supported the I-35W project. The Federal 

UPA grant also encouraged increased collaboration between State and local agencies as a condition of the grant.

Communications and 

Consensus-Building

The guiding communication philosophy with respect to 

road pricing in Minnesota is to leave “no question unanswered” in all interactions. Also, and very importantly, 

Mn/DOT acknowledged that it is impossible to anticipate all possible outcomes of a demonstration. Assurance 

was given that if the project worsened conditions, adjustments would be made. In fact, that was necessary in the 

early weeks of operation on I-394 MnPASS. 

The Metropolitan Council has attempted to target its 

communications efforts toward the anticipated interests 

of key affected parties. For example, for the I-35W project, Metro Transit conveyed the transit benefits in workshops for transit riders. When drivers are the audience, 

travel-time reliability and free-flow conditions are the 

main concerns. 

In general, outreach and public communication efforts 

have deemphasized revenue generation in favor of improved congestion management and improved travel options, remaining far away from any hint at pricing of existing lanes. When the issue of income equity arose, 

project proponents were able to reference findings from 

other projects (e.g., I-15 in San Diego) that showed little 

in the way of income equity impacts. 

The Metropolitan Council has also attempted to develop 

information on subjects appropriate to specific stakeholder groups; i.e., technical staff, local government, 

other regions, and the public. The Council’s public relations office maintains lists for opt-in registration to receive e-mail updates, meeting notices, and invitations to 

specific professional, civic, and community organizations to participate in plan development. 

In addition, there have been extensive consensus-building and stakeholder involvement activities throughout 

the consideration of road pricing in the Twin Cities metro area. An I-394 MnPASS HOT Lane Community 

Implementation Task Force was formed in 2004 to guide 

the department through project implementation. 

Representatives from the community included six city 

councils, citizen representatives, American Automobile 

Association (AAA), trucking association, transit-oriented groups, and state legislators. The Task Force met 

monthly and visited California’s SR 91 and I-15 projects 

to guide project design.

In addition, the University of Minnesota and Mn/DOT 

sponsored public roundtables on “Rethinking 

Transportation Finance,” organized legislative seminars 

on road pricing, and held stakeholder workshops twice a 

year. An important feature of consensus-building first 

for I-394 and continuing thereafter involved a “grass tops 

approach.” The approach reached out to elected officials 

and community leaders who then can communicate 

with their constituents to get support first of elected officials before the public. Another communication tactic 

was keeping the media informed.

Mn/DOT also has been diligent about assessing public 

reaction along the way. For example, survey work to evaluate I-394 showed that the MnPASS lanes were benefiting transit vehicles and there was not much effect on 

carpools. Surveys also showed support from 75 percent 

of the population.
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Managing Risk through 

Incremental Development

The Twin Cities region has been successful at developing 

pricing projects and policies in a methodical way, demonstrating concepts, and then moving on. This has allowed 

the region to test, evaluate, and incrementally develop 

HOT lanes in the region and gradually address enforcement, technology, and merge/weave operational risks. 

There also have been lower profile technical studies, to 

test concepts such as mileage-based user fees.

Summary 

Road pricing has been a topic of interest in the Twin 

Cities since the mid-1990s. Despite early defeats on project proposals, continued persistence by agencies and 

public officials has led to two projects moving forward, 

and recognition of pricing as a fundamental element of 

Secrets for Successful Communications

•	 Leave no question unanswered.

•	 Target the interests of key affected parties (e.g., hold a workshop for transit riders to convey transit benefits).

•	 Deemphasize revenue generation; focus on improved congestion management and improved travel options.

•	 Develop information on subjects appropriate to specific stakeholder groups like technical staff, local government officials, other regions, and the public.

•	 Work with an organization such as the Humphrey Institute, which can ensure objectivity in pricing discussions and serve as a reputable, neutral party in public roundtables, legislative seminars on road pricing, and 

stakeholder workshops.

•	 Obtain the buy-in of elected officials and community leaders who can then share the pertinent information 

with their constituencies

the long-range transportation plan. To date, the region 

has achieved significant advances in the use and advancement of road pricing policies and mechanisms:

• The 2030 TPP encourages pricing in the form of 

HOT lanes and priced dynamic shoulder lanes to 

mitigate congestion. 

• In addition, the Metropolitan Council has collaborated with Mn/DOT in investigating an expansion of 

the MnPASS system that might be accomplished in 

the near term. 

• Lead agencies in forwarding pricing have demonstrated the importance of incremental steps and decisionmaker involvement to gaining successful projects. 

• The agencies also have demonstrated the importance 

of an open and responsive planning and communication process attentive to concerns of affected parties.
16 | C o n g e st i o n P r i c i n g

San Francisco Bay Area Case Study

Years of Planning Give Rise to 

Road Pricing 

Road pricing in the Bay Area was first considered in the 

early 1990s when the San Francisco Bay Area 

Metropolitan Transportation Commission, which functions as the region’s metropolitan planning organization 

(MPO) convened the Bay Area Congestion Pricing Task 

Force to consider time-of-day pricing on the Bay Bridge. 

The task force, composed of business and environmental 

group stakeholders, secured one of the earliest grants 

from the FHWA congestion pricing pilot program. That 

initial effort did not move forward, but the success of 

HOT lanes in other parts of the country led to interest in 

the Bay Area to try this approach. 

The next serious foray into congestion pricing was led by 

the Alameda County Congestion Management Agency 

(ACCMA), which developed a plan for a HOT lane on 

I-680 through the Sunol Grade that links the Tri-Valley 

area to Fremont and Santa Clara County. The ACCMA 

has been evaluating improvement alternatives in the 

I-680 corridor since 1990. With the help of a Value 

Pricing Pilot Program grant received in 2002, the southbound-only HOT lane opened to traffic on September 

20, 2010.

As familiarity and acceptance grew around the potential 

of HOT lanes, other HOT lane studies and plans followed, including I-580 Tri-Valley area, and SR 85 and 

U.S. 101 in Santa Clara County, which are expected to 

open in the coming years. Studies on the potential for installing HOT lanes in other parts of the Bay Area have 

also been conducted, including Sonoma and Marin 

Counties on U.S. 101.

Bay Area Express Lane Network

With growing interest in HOT lanes around the Bay 

Area, MTC realized the need for a coordinated approach 

to HOT lanes in the region. In 2006, the agency planned 

a network of HOT lanes sharing design, finance, and operational characteristics. In 2005, MTC included an 

800-mile network of HOT lanes in its regional longrange transportation plan Transportation 2030.

The HOT network follows the layout of the 2002 update 

of the Regional HOV Master Plan, and assumes a regional express bus system operating on the network. For the 

express lane network, existing carpool lanes would be 

converted to express toll lanes and the revenue would be 

used to finance completion of the carpool/express lane 

system as well as other important transportation projects and transit operations in the express lane corridors. 

As MTC and its partner agencies proceed, they hope to 

accelerate delivery of some portions of the express lane 

network and reduce costs through a “rapid delivery design” approach that fits express lanes within existing 

rights-of-way.

The next step in HOT lane development will be corridor 

studies for each part of the network to specify exact configurations, costs and revenues, and operations.

MTC’s Transportation 2035 Plan

The Transportation 2035 plan evaluated the HOT lanes 

network with express bus enhancements as both a general transportation strategy—along with regional freeway 

operational improvements and regional rail expansion—

and as a specific investment. The evaluation applied the 

same performance measures that MTC uses to evaluate 

all project candidates in the planning process: 

• Benefit/cost ratios; 

• Collision reduction; 
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• Delay reduction;

• Reduction of carbon dioxide and particulate matter 

emissions;

• Reduction of vehicle miles traveled; and

• Affordability of for low-income house-holds. 

MTC also developed a legislative framework for the express lane network that addresses issues such as the roles 

and responsibilities of the key players, use of revenue, 

and project development processes. 

CONGESTION PRICING ON THE BAY BRIDGE

The 1989 Loma Prieta earthquake brought down a part 

of the San Francisco–Oakland Bay Bridge’s upper deck 

of the onto the lower and vividly demonstrated the vulnerability of the bridge to earthquakes. Since then, rising 

concerns about the susceptibility of all aging bridges in 

the Bay Area to earthquake damage, especially the heavily traveled Bay Bridge, combined with waning State 

funding for needed upgrades, has turned the tide of public opinion. Most interest groups came to support raising 

tolls if revenues were devoted to seismic retrofit and operations / maintenance for bridges.

Revenue Allocation

MTC was able to piggyback successfully on the need for a 

toll increase in 2009 by proposing peak pricing as both 

logical and familiar in terms both of paying more when 

demand is greatest, and of dampening congestion. While 

there was initially some concern that the State, which 

owns the Bay Bridges, might decide to channel revenues 

to other purposes, the committee was able to put this 

fear to rest. It made know that because the Bay Area Toll 

Authority (BATA), which is empowered specifically with 

toll setting and revenue allocation powers, is governed by 

MTC, it is therefore subject to local control. In addition, 

BATA policy clearly states that bridge toll revenues are 

dedicated to bridge operations and maintenance, with 

excess revenues being devoted to bridge transit. 

As a result, while some commuters continued to raise 

objections, major stakeholder support held and the new 

peak toll schedule went into effect on July 1, 2010.

Photo credit: Dean Birinyi
18 | C o n g e st i o n P r i c i n g

Congestion Pricing in the City and

County of San Francisco

In addition to regional initiatives, the San Francisco 

County Transportation Authority (SFCTA) has been 

studying congestion pricing for the downtown area of 

San Francisco since 2004, when a zone system was explored in the Countywide Transportation Plan of that 

year. The plans currently being considered involve charging a fee to cross or travel within a downtown zone or to 

cross major portals leading into San Francisco. To date, 

the proposals have met with strong resistance, especially 

from the business community, which contends that economic impacts in San Francisco may be unlike those in 

London and Stockholm where zone schemes similar to 

that proposed for the city exist. At present, this proposal 

is not included in the Regional Transportation Plan.. 

Challenges and ConsensusBuilding 

Successful adoption of the new HOT network in the region required building consensus among many stakeholders. This consensus grew around the principle that 

revenues collected in a corridor should be returned to 

the same area for HOT development and operations. 

Much of the consensus-building occur-red as MTC and 

regional partners developed proposed enabling legislation that mandated 95 percent of revenues to be returned to the collection location and 5 percent be a 

“backstop” for areas where net HOT lane revenues decline due to the San Francisco HOT lanes “siphoning off” 

drivers who would adjust their routes away from other 

existing tolled roadways. Though the legislation ultimately failed to progress, MTC is pursuing authority to 

implement the network under existing State law that allows for additional HOT lanes in northern California. 

MTC expects the principles developed through hard 

won consensus will endure.

Societal Considerations

ENVIRONMENTAL GROUPS raised concerns about 

the HOT network as “new highways in sheep’s clothing,” 

contributing to more travel and emissions. When reviewing the air quality impacts of the HOT lane network 

compared to regular HOV lane network, MTC estimated that CO emissions would be reduced by 10 million 

tons over 40 years because HOT reduces wasteful stopSFpark

On April 21, 2011, the City of San Francisco launched “Sfpark,” a federally funded pilot project run by the 

SFMTA that uses new “smart” parking management technologies and pricing policies to make it easier and 

faster to park in San Francisco. SFpark works by collecting and distributing real-time information about where 

parking is available so drivers can quickly find open spaces.

To help achieve the right level of parking availability, SFpark periodically adjusts meter and garage pricing up and 

down to match demand. Demand-responsive pricing encourages drivers to park in underused areas and 

garages, reducing demand in overused areas. SFpark real-time parking availability and pricing information is 

available via SFpark.org, the SFpark app for the iPhone and an open data stream for outside app developers. 

The system enables the monitoring of parking availability and price adjustment to meet availability goals using:

•	 Variably priced, networked multi-space meters and in-street sensors; 

•	 Variable pricing in 13 City-owned parking garages; and

•	 Nineteen variable message signs to communicate parking availability and prices.

This project is being led by the San Francisco Municipal Transportation Agency. Funding also provides for 

improved methods of parking payment, enhancements to the regional 511 traveler information system, and 

vehicle infrastructure integration technology pilot testing.

The City anticipates that better parking management will reduce street congestion and result in cleaner air, 

improved safety, and faster transit times. 
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and-go travel for more vehicles. There also would be expected CO2 and NOx emissions decreases. However, 

specific new HOT lanes will require Environmental 

Impact Report (EIR) analysis. 

But environmental concerns are one of several reasons 

the original enabling legislation failed to progress. Other 

reasons included efforts by the State professional engineers’ union to seek guarantees for all work (which goes 

beyond current law), and a need to update revenue projections based on current economic trends. 

ROADWAY DESIGN ISSUES such as merging, ingress, 

and egress were another important point to be resolved 

by Caltrans and MTC. Caltrans preferred separate acceleration and deceleration lanes with no mixing in general 

purpose lanes, increasing the freeway footprint. MTC, 

however, desired less expansion. The result is that final 

details of design were not settled and will be worked out 

as corridor plans develop.

INCOME EQUITY was brought up in early planning for 

the I-680 HOT lane, but devoting significant revenues to 

transit patronized by lower-income groups has blunted 

criticism, as has independent analysis by academics at 

San Jose State.

Communications

MTC carefully framed its public communications and 

outreach materials (web site, press releases, etc.) on the 

topic of HOT lanes to communicate some specific 

thoughts to the public. Some of the ways the committee 

did this was to: 

• Emphasize expediting the development of the HOV 

network over and above what regular funding would 

allow, with tolls from the HOT lanes contributing 

needed revenue; 

• Emphasize the return of revenue to the corridors 

where that revenue was gene-rated; 

• Call HOT lanes “express lanes” to emphasize the concept of speedy travel;

• Explain the HOT concept, rationale, and timeline on 

the MTC web site and indicate that it is a well-tested 

concept; 

• Emphasize the attractiveness of expanding HOV and 

transit use; 

• Show that HOT principles would result in more 

throughput and reduced delays; 

• Show that benefits would be commensurate with revenues collected in a particular corridor;

• Make known that only existing highway rights-of-way 

would be used; 

• Tailor designs to each corridor, but use consistent geometries and signage. 

• Highlight the economic benefits for the economy 

through congestion management, health and safety, 

and equitable mobility options.

Summary 

After early attempts to implement/introduce congestion-pricing on the Bay Bridge, the Bay Area began looking at HOT lanes as other regions successfully implemented road pricing projects. The impetus began at the 

county level, but as several counties initiated studies, the 

MTC undertook comprehensive studies on a system of 

toll lanes that would have consistent operating characteristics and standards.

Through extensive analytical studies, out-reach, and 

consensus-building, MTC included a network of approximately 800 miles. The network promised to accelerate 

development of the long planned HOV network by adding the HOT component.

Aside from the regional HOT lane system, the Bay Area 

Toll Authority recently adopted time-of-day tolls designed to spread demand and alleviate congestion, and 

the San Francisco County Transportation Authority is 

studying a cordon pricing concept similar to that enacted 

in London several years ago.

Gaining consensus took time and effort. A special HOT Lanes Executive 

Committee was formed that included representatives from Caltrans, 

county congestion management agencies, BATA, and California Highway 

Patrol. Although automobile, truck, environmental, business interests, and 

cities were not formally represented on the committee, they were active 

through standing advisory committees for development of the 

Transportation 2035 Plan.
20 | C o n g e st i o n P r i c i n g

Regional Road Pricing Policy 

Grew from Individual Projects

One element that all four regions had in common, however, is that none began with a broad concept of road pricing as an integral part of their long-range transportation 

vision. Rather, in all regions, individual project proposals 

introduced the metropolitan area to the congestion pricing mechanism.

As projects were successfully implemented, transportation officials saw a growing need to include policies on 

pricing in long-range plans. By incorporating road pricing 

into long-range plans, states and regions could create processes and plans that were consistent in the application 

of the policy, in the allocation of revenues, and in design 

and technology applied.

Effective Communication Is a 

Challenge Everywhere

Communication of road pricing concepts and consensus-building can be difficult, especially when those concepts are unknown and untested. All regions found that 

continuous engagement is necessary to maintain support 

and visibility for tolling and pricing. 

Pricing as One Element of a 

Cohesive Transportation Plan

All four regions found that including road pricing strategies as an element of a cohesive transportation plan was 

effective at gaining acceptance for the concepts. This 

meant integrating project lists, road pricing concepts, 

and decisions about how to handle potential revenue, 

showing that these pieces all worked together. 

Developing the Right Tools

for the Job

All regions struggle with developing the right models to 

provide the analysis to support difficult public policy decisions surrounding pricing. These models generally rely 

on a four-step process of forecasting:

1) Demand for travel (trip generation);

2) Destination(s) for travel (trip distribution);

3) Mode of travel (mode choice); and

4) Route of travel (trip assignment).

All regions found that the basic four-step travel demand 

models are not well suited to the complex changes that 

extensive road pricing can bring about. As a result, the 

different visions of road pricing in each region have 

shaped the type of analysis tools that were developed.

Each of the four case study jurisdictions acted to improve the sensitivity of their modeling tools to pricing 

related policy choices, and each recognized a need for 

continued improvement to make these tools relevant, 

useful, and accessible to policy makers.

Modifications to the modeling tools included changes 

that improved sensitivity to expected re-routing of traffic (Twin Cities, Dallas/Fort Worth), the choice of mode 

for travel (San Francisco Bay Area), and the demand for 

travel (San Francisco Bay Area, Puget Sound Region). 

Both Puget Sound and San Francisco also developed offmodel tools for optimizing tolls.

Improvements to the modeling tools were also identified 

in each area, including suggestions for: 

Lessons Learned
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• Using travel survey and household income data, 

• Using parcel level land use data, and 

• Conducting before and after studies to increase estimation accuracy for both the travel demand for travel 

mode. 

Because local and regional issues must be a factor in decisionmaker’s thinking, additional refinements included:

• Incorporating environmental justice analysis for specific locations and household categories, 

• Improving sensitivity to walking and bicycling trips, 

• Accounting for differences in people’s value of time, 

and 

• Improving sensitivity to system management and 

parking policies. 

Table 2 summarizes the modeling enhancements completed in each case study area.

Case Study Recent Modeling

Enhancements

Planned Modeling

Enhancements

Dallas/Fort Worth

•	 Improved sensitivity to traffic assignment •	 Before & After studies

•	 Survey data collection for behavioral

changes

Puget Sound Region

•	 Improved sensitivity to traffic assignment

•	 Improved sensitivity to land use and

distribution of trips (activity-based trip

generation)

•	 Off-model Toll Optimization tool

•	 Improved sensitivity to:

» Household income

» Pedestrian and bicycle trips

» System management

•	 Parking management

Minneapolis/

St. Paul •	 Improved sensitivity to traffic assignment

•	 Improved sensitivity to:

» Household income

» Differences in a person’s value of time

San Francisco Bay Area

•	 Improved sensitivity to traffic assignment

•	 Improved sensitivity to land use and

distribution of trips (activity-based trip

generation)

•	 Improved mode choice modeling

•	 Off-model Toll Optimization tool

•	 Improved sensitivity to:

» Household income categories for

equity analysis

» Differences in a person’s value of time

Table 2. Case Study Modeling Summary
22 | C o n g e st i o n P r i c i n g

Dallas/Fort Worth Region Case Study 

1. Mobility 2030, 2009 Amendment, especially Sections 1 and 17.

http://www.nctcog.org/trans/mtp/2030/2009Amendment.asp.

2. Managed Lanes Implementation in Dallas/Fort Worth, Presentation to Tarrant Regional 

Transportation Coalition, March 4, 2009, by Maribel Chavez, P.E., TxDOT and Michael Morris, 

P.E., NCTCOG. http://www.nctcog.org/trans/presentations/TRTC_ManagedLanes_030409.pdf.

3. 2005 Regional Value Pricing Corridor Evaluation and Feasibility Study, prepared by URS, for 

NCTCOG. http://www.nctcog.dst.tx.us/trans/mtp/valuepricing/index.asp. 

4. RTC tolling policies. http://www.nctcog.dst.tx.us/trans/committees/rtc/index.asp.

5. Developing Procedures for the Determination of Mobile Source Air Toxics (MSAT) and EJ 

Impacts, presentation by Dan Lamers, NCTCOG to IBTTA Facilities Management Workshop, 

April 28, 2008.

Puget Sound Region Case Study 

The PSRC web site has considerable information about the plan and the analytical details on 

its web site. In particular:

• Transportation 2040.

http://psrc.org/transportation/t2040/t2040-pubs/ final-draft-transportation-2040; and

• Transportation 2040: Draft Environmental Impact Statement.

http://www.psrc.org/transportation/t2040/t2040-pubs/trans2040-deis/.

These appendices in particular shed light on analytical techniques:

• Appendix E: Technical Description of the Modeling Framework;

• Appendix K: Data Analysis and Forecasting at the PSRC: New Tools Within and Integrated 

Modeling Framework; and

• Benefit/Cost Analysis web page, with several helpful references: http://www.psrc.org/data/models/

benefit/cost analysis/.

Minneapolis/St. Paul Region Case Study

1. 2010 Transportation Policy Plan, Adopted 2009, Amended 2010, Metropolitan Council.

http://www.metrocouncil.org/planning/transportation/TPP/2008/ index.htm.

2. Minnesota Department of Transportation I-394 MnPASS Technical Evaluation, Final Report. 

Prepared by Cambridge Systematics, Inc. November 2006.

http://www.mnpass.org/pdfs/394mnpass_tech_eval.pdf.

References
C o n g e sti o n P rici n g A P r i m e r : M e t r o p o l i t a n P l a n n i n g O r g a n i z a t i o n C a s e S t u d i e s | 23

3. Buckeye, K.R., and L.W. Munnich, Jr. Value Pricing Education and Outreach Model: I-394 

MnPASS Community Task Force. In Transportation Research Record No. 1960, Transportation 

Research Board, National Research Council. Washington, D.C. 2006.

4. Munnich, L.W., Jr., and K.R. Buckeye. I-394 MnPASS High-Occupancy Toll Lanes: Planning and 

Operational Issues and Outcomes (Lessons Learned in Year 1). Transportation Research Record 

No. 1996, Transportation Research Board, National Research Council. Washington, D.C. 2007.

5. MnPASS System Study, Prepared by Cambridge Systematics, Inc., 2005.

http://www.mnpass.org/systemstudy_archive.html.

6. Rebecca Kalauskas, Brian D. Taylor, and Hiroyuki Isek. Motivations Behind Electronic Road 

Pricing. What is the Driving Force Behind the Worldwide Rise in Tolling? A Review of Innovative 

Road Pricing from Across the Globe, UCB-ITS-PRR-2009-16, California PATH Research Report, 

page 2. http://www.path.berkeley.edu/PATH/Publications/PDF/PRR/2009/PRR-2009-16.pdf. 

7. Kenneth Buckeye and Adeel Lari. Measuring Perceptions of Road Pricing Alternatives: Minnesota 

Public Outreach Effort, Transportation Research Record: Journal of the Transportation Research 

Board, Transportation Research Board of the National Academies, ISSN0361-1981, Volume 

1558/1996. http://trb.metapress.com/content/e628t42847624478/.

8. Fact sheet. http://www.dot.state.mn.us/upa/documents/legfactsheet0309.pdf.

9. Overall information, reference to other cities. http://www.dot.state.mn.us/upa/.

10.Publicity video. http://www.hhh.umn.edu/centers/slp/vp/vp_org/about/videos.html.

11. I-35 customer information, MnPASS outreach events, survey results, operations.

http://www.mnpass.org/outreach.html.

12.Minnesota Statues 160.84 through 160.93, available at: https://www.revisor.mn.gov/revisor/pages/

statute/statute_chapter_toc.php?year=2006&chapter=160.

San Francisco Bay Area Case Study

1. 2030 Plan. http://www.mtc.ca.gov/planning/2035_plan/index.htm.

2. HOT Principles.

http://www.mtc.ca.gov/planning/hov/Res3868_Att_B-HOT_Network_Principles.pdf. 

3. HOT Lane Analysis.

http://www.mtc.ca.gov/planning/hov/HOT_Phase_3_report/2_HOT_Lanes_Final_Report.pdf.

4. FAQ. http://www.mtc.ca.gov/planning/hov/faq.htm.

5. Bay Bridge Pricing proposal. http://www.mtc.ca.gov/news/info/toll_increase.htm.

6. Bay Bridge Pricing Proposal PowerPoint.

http://www.mtc.ca.gov/news/info/2009/Toll_Increase_Recommendation_12-9-09.pdf.

7. Bay Bridge Pricing Analysis Power Point. http://apps.mtc.ca.gov/meeting_packet_documents/

agenda_1367/3_TollIncreaseRecommendationFinal.pdf.

For more information, contact: 

Angela Fogle Jacobs, AICP

Value Pricing Pilot Program Manager

FHWA-HOTM-1, Room E86-204 

1200 New Jersey Avenue, SE 

Washington, DC 20590

Tel: 202-366-0076

E-mail: angela.jacobs@dot.gov
Federal Highway Administration 

Office of Operations 

1200 New Jersey Avenue, SE

Washington, DC 20590 

Toll-Free “Help Line” 866-367-7487

www.ops.fhwa.dot.gov

August 2011

FHWA-HOP-11-030