Congestion Pricing:

A Primer on Institutional Issues
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Congestion Pricing: A Primer on Institutional Issues

COTM: Ms. Angela Jacobs, Federal Highway Administration

Institutional issues provide challenges to implementing congestion pricing strategies. The primer explores the types 

of institutional issues that are commonly encountered with priced lanes, zone-based pricing, and parking pricing 

programs. These issues include the up-front challenges of establishing leadership, meeting legislative requirements, 

and setting an organizational structure. Once the challenges are overcome, there are numerous institutional issues 

related to the planning process, public involvement and implementation procedures. The primer examines these topics with the insights gained from case study applications around the United States and Europe. 

Science Applications International Corporation (SAIC)

11251 Roger Bacon Drive, 3rd Floor

Reston, VA 20190

Fehr & Peers

1001 4th Avenue, Suite 4120

Seattle, WA 98154

United States Department of Transportation

Federal Highway Administration

1200 New Jersey Ave., SE

Washington, DC 20590

Donald Samdahl (Fehr & Peers), Myron Swisher (SAIC), Jennifer Symoun 

(SAIC), Will Lisska (Fehr & Peers)

Road pricing, congestion pricing, priced managed 

lanes, parking pricing

No restrictions.

Unclassified Unclassified 40 N/A

April 2013

DTFH61-06-D-00005

HOTM

2. Government Accession No. 3. Recipient’s Catalog No.
ii | Con g e st ion Pri c i n g

Cover image source: Washington State Department of Transportation (DOT)
Congestion Pri c ing A Primer on Institutional Issues | iii

Contents

The Primer Series and the Purpose of This Volume 1

Introduction 3

Congestion Pricing Strategies 3

Types of Institutional Issues 4

Organization of the Primer 4

Leadership 5

Legislative 8

Organization 12

Planning Process 16

Public Involvement 20

Managing Costs and Revenues 23

Implementation 26

Lessons Learned 29

References and Resources 30

References 30

Resources 30

Photo source: Washington State DOT
1 | Con g e st ion Pri c i n g

States and local jurisdictions are increasingly discussing 

congestion pricing as a strategy for improving transportation system performance. In fact, many transportation experts believe that congestion pricing offers promising opportunities to cost-effectively reduce traffic 

congestion, improve the reliability of highway system 

performance, and improve the quality of life for residents, many of whom are experiencing intolerable traffic congestion in regions across the country. 

Because congestion pricing is still a relatively new 

concept in the United States, the Federal Highway 

Administration (FHWA) is embarking on an outreach 

effort to introduce the various aspects of congestion 

pricing to decision-makers and transportation professionals. One element of FHWA’s congestion pricing outreach program is this Congestion Pricing Primer series. 

The aim of the primer series is not to promote congestion pricing or to provide an exhaustive discussion of 

the various technical and institutional issues one might 

encounter when implementing a particular project; 

rather the intent is to provide an overview of the key elements of congestion pricing, to illustrate the multidisciplinary aspects and skill sets required to analyze and 

implement congestion pricing, and to provide an entry 

point for practitioners and others interested in engaging 

in the congestion-pricing dialogue. 

The concept of tolling and congestion pricing is based 

on charging for access and use of our roadway network. 

It places responsibility for travel choices squarely in the 

hands of the individual traveler, where it can best be decided and managed. The car is often the most convenient means of transportation; however, with a little 

encouragement, people may find it attractive to change 

their travel habits, whether through consolidation of 

trips, car-sharing, by using public transportation, or by 

simply traveling at less-congested times. The use of 

proven and practical demand-management pricing that 

we freely use and apply to every other utility is needed 

for transportation. 

The application of tolling and road pricing to solve 

local transportation and sustainability problems provides the opportunity to solve transportation problems 

without federal or state funding. It could mean that further gas tax, sales tax, or motor vehicle registration fee 

The Primer Series and the

Purpose of This Volume

About This Primer Series

The Congestion Pricing Primer Series is part of FHWA’s outreach efforts 

to introduce the various aspects of congestion pricing to decision-makers and transportation professionals in the United States. The primers 

are intended to lay out the underlying rationale for congestion pricing and 

some of the technical issues associated with its implementation in a 

manner that is accessible to non-specialists in the field. Titles in this 

series include:

•	 Congestion Pricing Overview.

•	 Economics: Pricing, Demand, and Economic Efficiency.

•	 Non-Toll Pricing.

•	 Technologies That Enable Congestion Pricing.

•	 Technologies That Complement Congestion Pricing.

•	 Transit and Congestion Pricing.

•	 Income-Based Equity Impacts of Congestion Pricing.

•	 Congestion Pricing Institutional Issues.

The primers are available on the FHWA Congestion Pricing web site:

http://www.ops.fhwa.dot.gov/tolling_pricing/index.htm.
Congestion Pri c ing A Primer on Institutional Issues | 2

increases are not necessary now, or in the future. The 

idea of congestion pricing is a conceptual first step, not a 

complete plan of action. It has to be coordinated with 

other policy measures and environmental measures for 

sustainability. 

Institutional issues provide challenges to implementing congestion pricing strategies. This primer explores 

the types of institutional issues that are commonly encountered with priced roadway lanes and parking pricing programs. These include the up-front challenges of 

establishing leadership, meeting legislative requirements, and setting an organizational structure. Once 

these challenges are overcome, there are numerous institutional issues related to the planning process, public 

involvement and implementation procedures. These 

topics are examined with the insights gained from case 

study applications around the United States and Europe.

Photo source: Washington State DOT
3 | Con g e st ion Pri c i n g

Congestion Pricing Strategies

There are five main types of congestion pricing strategies aimed at shifting travel demand away from peak 

period travel and/or to alternative travel modes: 

1. Priced lanes: Variable or dynamically priced tolls on 

separated lanes within a highway, such as express-toll 

lanes or high-occupancy toll (HOT) lanes.

2. Tolls on entire roadways: Tolls on roads or bridges, including tolls on existing toll-free facilities during rush 

hours

3. Zone-based (area or cordon) charges: Either variable or 

fixed charges to drive within or into a congested area 

within a city. 

4. Area-wide charges: Per-mile charges on all roads within 

an area that may vary by level of congestion.

5. Parking Pricing: Use of parking pricing to modify travel behavior in terms of schedule, mode, and/or location. Can also include a range of parking cash-out 

policies in which cash is offered to employees in lieu 

of subsidized parking

Most congestion pricing strategies have some 

common objectives, such as managing peak period traffic demand and encouraging use of alternative modes. 

However, there are some notable differences in the strategies that have bearing on the institutional issues. Some 

of these differences are highlighted below.

• Priced lanes – Most applications of priced lanes are in 

the form of HOT lanes on freeways.1

 These facilities 

are typically under the control of a State department 

of transportation (DOT) or a toll authority, resulting 

in relatively clear lines of authority in terms of planning, design, and operation. In addition to the tollpaying drivers, users of the HOT lanes typically include transit agencies, carpool/vanpools, and 

emergency vehicles. These users may have different 

objectives than those of the implementing agency. 

The advent of Public Private Partnerships (P3) has 

also introduced the private sector into the mix. To 

date, HOT lanes have been implemented in selected 

freeway corridors. Expansion into HOT lane systems 

begins to expand the institutional complexities. 

• Zone-based pricing – The only examples of zonebased pricing are outside of North America. Typical 

applications are cordon-pricing around a city center. 

While one agency may have overall responsibility for 

the project, there are typically many other agencies 

involved, since the project affects a large number of 

roadway facilities and services. The private sector (e.g. 

businesses, residences) become active participants especially at the boundaries of the zone. 

• Parking pricing – The parking pricing strategies examined in this primer focus on government agencies 

adjusting on- and off- street parking prices to influence the timing and location of parking within a city. 

As such, the institutional issues tend to be focused 

within the city, including its interactions with private-sector parking operators and affected businesses. 

1 The SR 520 bridge replacement project in Seattle is an example of a variable tolls being charged on an entire freeway facility.

Introduction
Congestion Pri c ing A Primer on Institutional Issues | 4

Types of Institutional Issues

Implementing congestion pricing projects requires a 

combination of good planning, proven technical capabilities, and reliable day-to-day operations. Equally important is the ability to work through the myriad of institutional issues that can arise at any point in the 

process. Congestion pricing projects are different from 

many other transportation projects: they represent a 

new way of managing travel demand; they require daily, 

hourly, or even constant monitoring; and they deal explicitly with money. All of these factors produce an inordinate amount of attention by decision-makers, the media, and the public. 

This primer will explore the range of institutional 

issues that have arisen on congestion pricing projects 

throughout the United States and Europe. These issues 

were examined through a variety of sources: interviews 

with practitioners, an FHWA-sponsored webinar, and a 

peer exchange.2

 Through this research, the institutional issues primarily fit into the following types:

• Leadership – Project champions, roles and responsibilities

• Legislative – Enabling legislation, political structure

• Organization – Internal and external structures,

interagency agreements

• Planning Process – Setting objectives, agency coordination, setting policies, developing the plan 

• Public Involvement – Outreach strategies, gaining 

public support, marketing

• Managing Costs and Revenues – Cost sharing, allocation of revenues

• Implementation – Construction and roll-out, day-today operations 

While many of these issues are broadly applicable to 

the wide range of congestion pricing strategies, some are 

more unique to a particular strategy. This primer focuses on issues as they relate to three strategies: variably 

priced lanes, zone-based charges, and parking pricing 

(except parking cash-out) strategies. These three are not 

intended to be all inclusive, but represent a broad array 

of congestion project types and institutional issues. The 

first variably priced fully tolled facility (i.e. SR 520 

bridge in Seattle) is also examined in the context of the 

other pricing strategies. 

Organization of the Primer

This primer is organized by the seven institutional issue 

types, with a section dedicated to each issue. Each section provides insights into how dealing with the respective issue directly within the project development process can lead to a more successful congestion pricing 

project. Each section also provides several strategy-specific examples illustrating how the issue has been handled in existing congestion pricing projects. The examples are color-coded by strategy as follows:

The primer concludes with a section on Lessons 

Learned, summarizing the key points identified for each 

institutional issue.

Zone-Based Pricing

Parking Pricing 

Priced Lanes

2 Refer to the references for a list of interviews and other background material.
5 | Con g e st ion Pri c i n g

A common theme among congestion pricing projects is 

the need for strong leadership to move the project from 

planning through design and into implementation. 

Because of the new and often controversial nature of 

congestion pricing in a community, the typical constituencies that support transportation projects may not be 

mobilized to move such projects ahead.

Leadership is manifested in two primary ways:

• Finding a Project Champion

• Developing strategic alliances

Leadership in the form of a Project Champion can 

help make the congestion pricing scheme effective. For 

roadway pricing projects, support is needed at both the 

political level and at the State DOT level. The project 

champion may often be a political leader; in some cases, 

leadership from major business groups can influence the 

project. A champion will typically be focused on the 

specific geographic application of congestion pricing 

(e.g. a HOT lane) and have a vested interest in its success. 

The project team can design the congestion pricing project to meet the project objectives, but the champion can 

keep the process moving ahead. 

As discussed below, champions are also needed at the 

legislative level to ensure that sufficient enabling authority is provided to make the congestion pricing project a 

reality. 

In addition to the project champion, forming strategic alliances can allow consistent messaging of project 

objectives and benefits. The project team or leader can 

develop relationships with all of the key political and 

implementing organizations so that there are few or no 

surprises. These organizations might include local and 

State DOTs, tolling authorities, transit agencies, and 

other operating authorities. Federal partners are also 

important on projects involving Federal-aid highways 

and/or Federal funding. Ideally, all agencies should seek 

to have the same priority with goals aligned among the 

organizations.

Leadership

Key Points- Leadership

•	The project champion can make the congestion pricing 

scheme effective

•	Champions may include political and business leaders

•	A project team or leader should seek to develop relationships with all of the key political and implementing organizations 

•	Agency alliances allow consistent messaging of project 

objectives and benefits
Congestion Pri c ing A Primer on Institutional Issues | 6

Champions Support Priced Roadway Lanes

Priced Roadway Lane projects have succeeded 

where there was clearly defined leadership and often a 

visible project champion. Here are some examples:

San Diego I-15 – The HOT lane project had a strong 

project champion, the City of Poway Mayor Jan 

Goldsmith. The mayor worked with other regional 

leaders to build support to convert the existing 

underutilized HOV lane on I-15 into a HOT lane. A key 

selling point was the ability to use some of the 

revenues to fund the operation of transit service in the 

corridor.

Atlanta – Leadership on the I-85 HOT lane project 

came from a strong relationship among three state and 

regional agencies who originally proposed on the UPA 

grant together (GDOT, the Georgia State Road and 

Tollway Authority, and the Georgia Regional 

Transportation Authority). This experience provided 

early bonding and trust building among these agencies, all of whom have been actively involved in Project 

Development and implementation.

Los Angeles – The Los Angeles I-10/110 HOT lanes 

project had strong support of the sponsor, Los Angeles 

Metro, but was not very popular with the California 

Legislature. This was due to concerns about social 

equity, traffic impacts, and public acceptance. State 

Senator Mark Ridley-Thomas, along with other public 

officials, emerged as a political champion when he 

authored the legislation that enabled tolling authority to 

make the HOT lanes a reality. The legislation includes a 

requirement for an assessment on the impact to low 

income commuters, a joint performance report from 

Metro and Caltrans at the conclusion of the demonstration period, and a formal public outreach and 

communications plan. 

Seattle – In the Puget Sound Region of Washington 

State, there are several congestion pricing champions 

in both the public and private sectors. The Secretary of 

Transportation has been steadfast in support of tolling 

of the SR 520 bridge (i.e. a fully tolled facility), priced 

managed lanes on SR 167, and forthcoming express 

toll lanes on I-405. Also important is the leadership 

provided by major businesses such as Boeing and 

Microsoft, whose employees commute along these 

roadways. The private sector leadership has helped 

bolster legislative support to continue the pricing 

program.

Champions Needed for Zone-Based Projects

The influence of a project champion, or lack thereof, 

was evident in many of the zone-based congestion 

pricing projects, as described below. 

The successful implementation of a congestion charge 

in London was due to Ken Livingstone, who was 

Mayor of London and head of the Greater London 

Authority (GLA). He provided political credibility and 

demanded technical credibility. The GLA had overall 

control (single tier government) and coordinated 

among other local authorities. Mr. Livingstone had full 

control to set the price and control the revenue. Three 

other zone-based programs were unsuccessful, in part 

due to leadership issues. 

The proposed New York City program had a strong 

champion in Mayor Michael Bloomberg. It also was 

supported by both Governors who held office during 

this time. Strategically, Mr. Bloomberg acted in a 

similar manner to London’s Livingstone, but unlike 

Livingstone he didn’t have legal authority to implement 

a congestion pricing scheme. In this case, as project 

champion he could not overcome other political 

limitations outside of his control.

A proposed zone based program in Edinburgh, 

Scotland was hampered by a lack of strong local 

leadership. The decisions were dependent on Scottish 

government, which didn’t have a local vested interest. 

As a result, when neighboring authorities were 

opposed, there wasn’t a leader to help move the 

process along.

Finally, the project proposed in Manchester, UK had a 

good political structure to sponsor a zone-based 

congestion pricing scheme for the region. The region 

had one overarching agency (Transport for Greater 

Manchester- formerly the Greater Manchester 

Passenger Transport Authority) coordinating decisions 

for 2.5 million people combined with 10 elected 

authorities. However, the council chair was unable to 

convince the needed two-thirds of the member 

authorities to support the scheme amidst strong public 

opposition.
7 | Con g e st ion Pri c i n g

SFpark- An Example of Parking Pricing within 

a Defined Urban Center

The SFpark project in San Francisco is using parking 

pricing to manage congestion in the downtown. An 

advantage for San Francisco is that it is both a county 

and a city. While this can create some competing 

demands, decisionmaking is easier within this 

construct. The San Francisco Municipal Transportation 

Agency (SFMTA) plans and manages the transportation system for all non-auto modes. This includes 

control of on and off-street parking operations and 

enforcement. The SFMTA facilitated the roll-out of the 

SFpark program.

In San Francisco, SFpark leadership came through the 

city’s political process and partnerships forged with 

nontraditional agencies and organizations, along with 

contacts between the city and private operators. The 

SFMTA Chief Financial Officer has been a vigorous 

supporter of the UPA program, under whose auspices 

the SFpark project was funded.

495 Express Lanes - Bringing in the Private 

Sector 

The advent of Public-Private Partnership (P3) projects 

brings in the private sector. Public and private sectors 

often come into a project with very different perspectives and goals, and they negotiate differently. The 

agency must establish a strong relationship with the 

private concessionaire (and vice versa). 

The Virginia I-495 Capital Beltway Express Lanes 

project was unique in that the HOT lane proposal from 

the private sector was unsolicited. As a result, there 

initially was no project champion from the public 

agency or political sectors. Once the design with HOV/

HOT lanes and transit provisions was clarified, the 

Virginia Secretary of Transportation was in support. 

When a later Secretary created the Office of 

Transportation Public Private Partnerships (OTP3) in 

2010, there was clear leadership on the overall P3 

program.
Congestion Pri c ing A Primer on Institutional Issues | 8

The legislative process forms the basis for proceeding 

with a congestion pricing project. Laws in many States 

(and cities) are silent on how to accommodate pricing 

within the transportation system. Agencies can plan all 

they want, but enabling legislation is usually required to 

move ahead with any congestion pricing project. This 

legislation defines the political structure within which 

the congestion pricing project can evolve. 

“There WILL be a legislative issue. Everyone 

encounters it some way or the other”

(Minnesota Experience)

The operative word for gaining legislative support is 

“trust.” Typically the sponsoring agency, for example a 

State department of transportation, needs to find support with key legislators, who must be able to trust that 

the project will be a success. This can be a “chickenand-egg” situation. There are no guarantees of success, 

so the agency should choose its projects with an eye towards minimizing risk and maximizing the likelihood 

of success. 

Good enabling legislation should provide clear authority among agencies and, if applicable, private parties. It should answer the question “who has control?” 

over decisions that need to be made throughout the 

project’s evolution. Depending on the level of trust with 

the legislature, there may be more or less control given 

to the implementing agencies. Enabling authority 

doesn’t necessarily mean that legislatures are willing to 

relinquish control.

The enabling authority should also help to define the 

purpose of applying pricing. For example, there is an inherent difference in toll structure if the objective is to 

maximize revenue rather than to manage traffic flow. 

Gaining some clear intent from the legislature can assist 

in designing a congestion pricing project that will meet 

political expectations. 

There is substantial variation in political structures 

among regions in North America. The differences are 

more disparate when comparing North America to 

Europe, where most of the zone-based congestion pricing projects have been implemented. 

Legislative

Key Points

•	Develop trust up front with legislature

•	Need clear authority among agencies—determine who has 

control

•	Have enabling legislation in place

•	Seek overall authority without always needing to go back to 

legislature for decisions
9 | Con g e st ion Pri c i n g

Priced Managed Lane Legislative Experiences

With the growth in HOV to HOT lane conversions around the country, often the HOT lane planning process 

moved ahead of the legislative process. Different projects dealt with the enabling legislation a bit differently, 

with the end result being clear authorization to proceed with the HOT lane projects. A few examples:

Miami – As a recipient of a UPA grant, the Miami I-95 project took advantage of the fact that this was a 

discretionary grant with a short time frame required for completion. Therefore, some immediate legislative 

decisions were needed and the enabling process was expedited.

San Diego – The I-15 HOT lane conversion program originally had State representative support to gain 

approval in the legislature. San Diego Association of Governments (SANDAG) undertook extensive public 

outreach that helped lead to a political consensus to move ahead. Some legislative concern over the perceived 

“Lexus lane” syndrome was offset by committing funds to increased transit. During the legislative process, 

Caltrans was concerned with the fact that the project was originally a “demonstration” and pushed to set 

specific time frames for project implementation. This proved not to be a big issue and the project was 

approved.

Minnesota – Minnesota’s initiation to priced managed lanes initially started with TRANSMART (a P3 

process), which invited the private sector to propose and ultimately develop toll facilities. The State promised 

to provide substantial resources to match private sector funds to get the process started. Through this 

process, one project, State Highway 212, was advanced to a development agreement, but was ultimately 

vetoed under a legislative provision that allowed local communities through which a proposed toll facility 

passed to veto a project unconditionally. Despite the setback, the State commissioner of transportation at the 

time wanted to continue to pursue HOT lanes. The 1997 legislature finally authorized an HOV to HOT conversion of I-394 and, while exempting the project from the local veto authority in tolling legislation, did require a 

public hearing on the concept. This generated negative reactions from the public and politicians on perceived 

“equity issues” and the project was deferred. The Minnesota DOT’s response was to form an external 

advisory task force guiding consideration and development of future projects. After a couple of years the task 

force supported the HOT lane concept and the legislature ultimately approved the I-394 project. By this time, 

a new Governor was also on board and became a champion for the project. 

Los Angeles – The I-10/110 project was also a recipient of Congestion Reduction Demonstration program 

grant, which required the team to obtain enabling legislation in six months. The grant amount was so high that 

State elected officials had a hard time not passing legislation, however there was consternation with the short 

time-frame and the fact that not much planning had been done by that time. Some Congressional members 

also became involved, due to their concerns about tolling equity, diversion, HOV occupancy limits, and 

performance metrics. The project leaders did have to go back to legislature twice to revise the legislation, but 

both attempts were smoother because the team clearly defined the project design, demonstrated the 

expected benefits, and showed confidence in implementing the HOT lanes on time. 

Washington State – The WSDOT initially received legislative authorization for tolling of the Tacoma Narrows 

Bridge. Subsequent authority was sought and received for the SR 167 HOV to HOT lane conversion and the 

SR 520 Bridge Replacement Project, which was part of the UPA grant program. SR 520 charges variable tolls 

on all lanes of the existing floating bridge. A strong public process has helped to build support for roadway 

pricing. A tolling implementation committee was established in 2010 to gauge and build public support and to 

provide guidance to the legislature. An initiative passed in 2010 requires the legislature to set toll rates. This 

additional requirement created challenges but was achieved. Currently all proposed tolling projects must be 

specifically approved by the legislature. 

Virginia – The State already had P3 authority with the PPPTA Act of 1995. In 2002 the act was amended 

relative to design-build provisions. The original 1995 Act had good intentions to have the legislature make the 

up-front policy decisions, and then let the engineers and planners take over. In practice, the legislature was 

reluctant to relinquish control over the P3 projects (e.g. Hampton Roads Midtown Tunnel). By 2004, when the 

I- 495 unsolicited project proposal was made, the State appointed an independent review panel, which ended 

up voting in favor of the private consortium proposal. 
Congestion Pri c ing A Primer on Institutional Issues | 10

The enabling authority should also help to define the 

purpose of applying pricing. For example, there is an inherent difference in toll structure if the objective is to 

maximize revenue rather than to manage traffic flow. 

Gaining some clear intent from the legislature can assist 

in designing a congestion pricing project that will meet 

political expectations. 

There is substantial variation in political structures 

among regions in North America. The differences are 

more disparate when comparing North America to 

Europe, where most of the zone-based congestion pricing projects have been implemented.

In general, there are few international reference 

points from which the United States can obtain relevant 

lessons learned. However, as shown in the text box 

above, the successes of zone-based programs in London 

and Stockholm offer some perspectives. 

Most regions have looked to define agency and political roles to avoid infighting. The biggest political concern seems to be “Who is going to be able to control the 

key decisions?” Some of this concern stems from the 

trust issue described previously. Agencies that have 

made realistic promises about congestion pricing impacts have helped to develop additional trust with political bodies.

Obtaining Authority for Zone-based Congestion Pricing Schemes

Zone-based pricing schemes have evolved from a variety of legislative beginnings. In London there was strong 

national support and enabling legislation. In London the Greater London Authority Act 1999 established the authority 

of the mayor. This was followed by the 2000 Transport Act, which expanded pricing authority to the rest of the 

country except for Scotland. This legislation paved the way for implementing the London pricing program. 

In New York City, the possibility of a UPA grant encouraged City Hall to propose congestion pricing in April 2007, 

and UPA deadlines accelerated its consideration. Once the Mayor announced his plan, work proceeded quickly with 

the City leading a multiagency staff group, and then through a Commission set up by the legislature. While the 

regional groups proceeded well with the planning effort, City Council approved the plan and the State Senate was 

likely to do so as well, but the plan failed to gain support in the State Assembly. The primary legislative concern was 

the perceived lack of benefits to drivers (e.g., reduced congestion) relative to the cost of the charge. This experience 

pointed out the difficulty of achieving statewide support for a specific regional transportation program. 

In Sweden, congestion charging was considered in both Stockholm and Gothenburg. The Stockholm plan was first 

initiated in the early 2000s. Initially there was no legislative authority—but local agencies pressed the national 

legislature to get involved. The Stockholm pricing scheme was approved as a ‘trial’ for 7 months during a 3-year 

period. Social Democrats took away some of the political heat by holding a referendum after the 7-month trial. 

Stockholm still needed national legislation (termed a “national tax” under Swedish law) to fully authorize the pricing 

scheme. Local agencies needed to ask for this authority, so the city of Stockholm proceeded to make the request, 

even though the leader of the city was not supportive. The referendum passed in 2007, providing funds to pay to 

construct a new ring road plus a small amount allocated to transit. The city came on board after the trial period ended.

Gothenburg Initiated planning for a cordon pricing scheme in 2009. The city’s goal was to help fund needed 

infrastructure, including for transit. They used a similar planning process as Stockholm but had new national legislation that delegated the congestion pricing decisions to a regional authority. The Swedish National Road Administration 

was supportive of the scheme along with the City of Gothenburg. This support overcame the initial resistance to the 

idea by the Swedish Department of Growth. The pricing scheme opened on January 1, 2013.
11 | Con g e st ion Pri c i n g

Parking Pricing Decisionmaking

Parking pricing decisionmaking tends to be more localized within a city or other municipal agency. Parking has 

always been a very visible, contentious and political issue within cities, given the localized relationship 

between parking, local businesses, and municipal funding. The advent of parking pay stations and potential for 

variable on-street meter parking rates creates a new institutional dynamic—cities now have more control over 

the hourly parking rates charged in different areas within a city. The complication is that cities control most 

on-street and some off-street parking, but most off-street parking is privately owned and operated. In the 

SFpark project, the San Francisco Metropolitan Transit Authority was able to obtain legislative approval early in 

the process through the city council rather than obtaining state approvals. 

The FHWA primer Contemporary Approaches to Parking Pricing (2012) provides additional insights into the 

complexities of implementing parking pricing programs, including examples from San Francisco, Seattle, 

New York City, Chicago, Los Angeles, Washington, DC, Ventura, CA and Aspen, CO. The primer is 

available at http://www.ops.fhwa.dot.gov/publications/fhwahop12026/index.htm. 
Congestion Pri c ing A Primer on Institutional Issues | 12

Organization

The implementation of congestion pricing projects often requires a different organizational structure than 

typically found in State DOTs and municipal governments. The introduction of a pricing mechanism means 

that revenues must be collected and distributed. 

Organizational issues include the degree of agency cooperation, structure and staffing, and the development of 

interagency agreements. 

As previously stated, defining clear agency responsibilities facilitates a clean organizational structure. For 

priced managed lanes, agencies new to tolling must set 

up a tolling organization either within the State DOT or 

in the form of a separate toll agency. When private companies are involved, establishing clear responsibilities is 

essential to ensure that the public and private staff can 

work together as a team. For zone-based pricing, various 

State, regional, and/or municipal governments can be 

involved. Conversely, parking pricing is typically controlled by a municipal government, so the organization 

is more defined. 

Organizations that can speak with one voice fare 

better in policy discussions with decisionmakers and 

the public. The complexities of congestion pricing projects can be smoothed out by having a clear message that 

is echoed by all of the parties involved. This can be 

achieved by educating the project team on the objectives 

of the project. If this is done early in the project planning 

phase, it will help to create a cohesive external project 

message and also keep the project team focused on the 

most important project needs.

A successful congestion pricing organization establishes an internal structure that involves the right 

people. This includes defining an internal group set 

apart from normal departments that is focused on the 

congestion pricing project. Since pricing projects are 

often multidisciplinary, agencies with internal departmental “silos” can face challenges associated with having 

the right staff involved at the right times. For example, 

accounting and finance staff are usually in different departments, and may not have normal lines of communication with transportation staff. Assigning the right 

staff from various departments to the congestion pricing team will help to break down the organizational 

silos. To facilitate cross-department coordination, some 

congestion pricing projects have developed specific line 

authorities among departments using internal agreements. 

It is one thing to set up an organizational structure 

that looks good on paper. It is another to get the right 

people involved. Congestion pricing projects benefit 

from having staff who are committed to the project and 

who understand how the pricing of transportation facilities changes the dynamics of a transportation system. 

Part of this challenge is to form a team of professionals 

Key Points

•	Define project roles – agency internal/external, and private 

sector

•	Get the right PEOPLE, not just the right AGENCY 

•	Make sure everyone understands the project objectives

•	The agency that’s going to operate the congestion pricing 

program should be the one that plans and designs it 
13 | Con g e st ion Pri c i n g

who recognize the need to become more “customer-focused” due to the introduction of toll transactions and 

additional questions generated by the public. Meeting 

this requirement may involve hiring or reassigning staff 

with customer skills into the congestion pricing team. 

Many congestion pricing projects also involve close 

coordination between the implementing agency (e.g. 

State DOT) and transit providers. Buses may operate on 

the priced facility with special rules, which must be established up-front. In some cases, transit agencies might 

also be recipients of pricing revenues that will affect the 

delivery of bus services. 

The private sector has become involved in congestion 

pricing projects through P3 agreements. Injecting private sector interests and personnel into a traditional 

public agency structure can lead to organizational challenges, as illustrated on the Virginia 495 Express Lanes 

project example (see text box on next page). One challenge with P3 projects is that public agencies do not negotiate like private sector firms. Internal public agency 

structures and legislative provisos can limit the latitude 

of staff to make agreements that fully maximize the 

public benefits of a congestion pricing project. It is important to understand these limits when developing the 

P3 agreements and setting up the public/private organizations that will design and implement the project. 

Organizational Strategies for Priced Roadways

Roadway pricing projects often pass through multiple jurisdictions and require close coordination among State, 

regional, and local agencies. 

In Miami, the I-95 project involved two Florida Department of Transportation (FDOT) districts, the Florida Turnpike 

Authority, two Counties, and two Metropolitan Planning Organizations (MPOs). There was no formal “agreement” 

between FDOT and the Turnpike Authority, but staff were given specific authority during project planning, 

construction and operation. The agencies are working together well without official agreements. 

In Atlanta, the primary agencies designated “lead” responsibilities split by topic: Design, Procurement, Project 

Management, Policy, and Finances. 

In Minnesota, the Minnesota Department of Transportation (MNDOT) was the project lead, but the State also 

created a project management team consisting of a local consultant, a national consultant, and the Humphrey 

Institute. This management team became the “independent” face of the project and helped to dispel the perception that MNDOT was forcing tolling onto the public. In essence, this team held MNDOT at arm’s length on the 

project so the agency did not appear to be primary champion. This proved to be a very effective approach.

In Los Angeles, the Los Angeles Metro Chief Executive Officer held a weekly staff meeting and included an 

agenda item at every other meeting to discuss how the senior staff were coordinating on the project. This 

organization set forth a culture that promoted full integration of the program team rather than just cooperation for a 

single project. In turn, the leadership style broke down internal organizational silos, which can hinder implementing 

pricing strategies. One challenge was to develop a cooperative agreement defining roles and responsibilities 

between LA Metro and Caltrans, but this agreement was achieved.

In Seattle, the SR 520 Bridge tolling project has been a joint effort between WSDOT, King County Metro (i.e. 

transit service provider), and the Puget Sound Regional Council. These agencies collaborated on the Urban 

Partnership proposal and have remained active partners during implementation of the pricing project. WSDOT is 

the overall lead for the project, which requires coordination between the Toll Division and the Northwest Region, 

which is constructing the new floating bridge and connecting freeway segments. 
Congestion Pri c ing A Primer on Institutional Issues | 14

Integrating Public and Private Sector Organizations

The Virginia 495 Express Lanes created a new organizational structure within the Virginia Department of 

Transportation (VDOT). Both the public and private sector partners needed to be integrated into a team, so, to 

accomplish this, VDOT set up an internal structure to manage the I-495 project. A 2002 VDOT reorganization 

created two divisions: the Innovative Project Delivery Division, and the Innovative Finance Division. This 

structure worked reasonably well, but the two divisions were still somewhat independent. In December 2010, 

the Secretary created the Office of Transportation Public Private Partnerships (OTP3), which then oversaw the 

two innovative divisions. 

Organizationally, VDOT hired a General Engineering Consultant, which was responsible for interacting with all 

of the affected parties. VDOT and the consulting team shared many responsibilities for design, but VDOT 

retained approval authority for monetary expenditures and task order changes. Given the newness of the P3 

process, the various divisions within VDOT had different understandings of what was included in the contract. 

In hindsight, staff indicated that it would have been very helpful to make sure that all VDOT staff clearly 

understood the contract with the private concessionaire. This could have prevented some misunderstandings 

and avoided some change orders. Complicating the issue was the fact that the concessionaire initially did not 

know much about the Northern Virginia planning process. To resolve this, VDOT hired a seasoned professional 

from Fairfax County to manage the overall planning process. 

Some VDOT divisions and personnel were less willing to give up design and implementation control to the 

concessionaire. There was a perception that the State would ultimately be responsible for the project, so 

relinquishing control was difficult. In the early months, moving beyond the normal processes the VDOT was 

used to was problematic, even though the senior department managers embraced the overall project. Some 

of the challenges were also organizational: at the start of the project, VDOT handled the P3 as part of its 

“normal operations,” which meant that the few people involved made the project a priority. Subsequently, 

VDOT put one person in charge and set up a separate office for P3. More streamlined procedures and 

processes followed, the level of trust strengthened between the parties, and clear expectations were 

articulated on both sides.

Organizational Challenges with Zone-based Pricing

For zone-based pricing schemes, having regional political autonomy facilitates making decisions. London is 

the prime example of having a central government that controlled the planning, design, and implementation of 

the congestion pricing scheme. 

New York City had similar aspirations, but the greater institutional complexity made it complicated to gain 

public and political support. While the city led a strong multiagency working group including city, State and 

transit agencies, the Metropolitan Transportation Authority (MTA) would have spent the money. Despite a 

“lockbox” provision in the proposed authorizing legislation, many questioned whether the revenues would be 

spent as intended, undercutting support for the plan.
15 | Con g e st ion Pri c i n g

Parking Pricing Organization

Parking pricing has many of the same institutional issues associated with multiple agency involvement, but 

parking also has some unique challenges. Institutional issues follow who controls the parking and who pays 

the parking. A city controls only a certain amount of the available parking; most of the parking in key congestion areas is privately owned and operated. This reality requires close coordination between the agency and 

the private sector. The use of in-pavement parking sensors and potential inclusion of private parking operators 

introduces complexities for negotiation of a parking pricing scheme, although this usually would not change 

the overall program organization. 

Another complication is the competing needs for curb space on city streets. Within an urban area, the curb 

space accommodates parking and many other uses—commercial vehicle loading, taxis, bikes, food trucks, 

etc. As a result, parking is highly visible and political, leading to local officials making parking decisions based 

on qualitative factors that don’t necessarily benefit the city’s overall parking program. 

SFpark in San Francisco is the first parking management project to set parking rates in a very transparent 

fashion using quantitative, real-time parking demand information. SFMTA controls on-street parking as well as 

several off-street public parking garages. This gives the program flexibility to price both the on- and off-street 

parking to achieve the project goals. 

Before the SFpark project, it cost more to park in a garage than a meter, with a result that garages were underutilized. The SFpark shifted 14 of the 20 SFMTA public parking garages back to their original purpose– short 

term parking rather than commuter parking. SFpark lowered most hourly rates (at the vast majority of garages 

and times) but increased the cost of commute (early bird/daily/monthly) parking. This action affected some 

commuters who were used to all of the “early bird” parking specials, and seems to have influenced the 

market price or pricing structure at surrounding privately owned/operated garages. 

One technique used to define the organization clearly is the agency agreement, which can either be intra- or interagency. This agreement can distinguish between the major funding and implementing organizations, and those partners who may have small but unique roles. In the case of priced managed lanes, several agreements may be needed 

throughout a corridor to deal with changing jurisdictional boundaries, or in the case of the Miami I-95 HOT lanes, 

changing transit providers.
Congestion Pri c ing A Primer on Institutional Issues | 16

Planning Process

In many ways, the planning process involved in implementing a congestion pricing project is similar to other 

major transportation projects: set the objectives early, 

include all affected groups, and assume the need for continual evaluation. Because of the newness of the congestion pricing concept, decisionmakers and the public appreciate having a clear set of objectives that the project is 

trying to achieve. 

The various agencies and private partners may have 

competing objectives that should be resolved early in 

the planning process. For example, a State DOT may 

want a priced managed lane to generate sufficient revenue to cover operating costs along with some of the capital costs. The resulting performance standards could 

prioritize toll revenue over freeway operations. This objective may conflict with a transit agency’s goal to ensure 

free-flowing travel (for buses) in the managed lane. 

Especially during the early HOV to HOT conversion 

projects, transit agencies operating on the HOV lanes 

tended to view the conversion to HOT lanes with different objectives than those of the implementing agency. 

Similarly, private funding partners typically want to 

make sure that they obtain a reasonable profit, an objective that may conflict with an implementing agency’s 

goal to allow free travel for HOVs and transit, or to make 

sure that the lane(s) operate at a certain level of service. 

Successful priced roadway projects have involved all organizations throughout the process, including setting 

the project objectives/policies. Setting clear objectives is 

also important for zone-based and parking pricing programs, as illustrated in the text boxes on the following 

pages.

Once the objectives have been set, the challenge is to 

create a professional team based on essential disciplines 

to implement the planning process. For example, in 

Atlanta, the team was organized around the following 

functions: policy, finance, outreach, environmental, 

design, tolls, enforcement, and transit. Members working in each of these functions had specific roles within 

the planning process, but under the auspices of an overall team. 

Several agencies cited the need for a systems approach to congestion pricing planning, even if the immediate plan is at corridor or subarea level. For example, 

some planning and design decisions (such as HOV eligibility definitions, toll rates, design treatments, and technology choice) might make sense for a single priced roadway corridor, but they may not make sense from a 

system perspective. In Northern Virginia, managed 

lanes evolved in different corridors with different HOV 

occupancy rules. As a result, the toll transponders include a 3-way switch to adapt to the different rules on 

I-495, I-395, and I-66. Some additional examples are 

provided below. Consistency and simplicity are good 

advice for planners to consider when planning for a congestion pricing program. 

Once the initial planning is done and the project is 

close to implementation, the question remains “will the 

Key Points

•	Set up clear objectives (e.g. revenue vs. operations)

•	Create clear planning process

•	Include all affected groups, including construction, operations, enforcement

•	Plan for continual evaluation- lessons learned

•	Don’t forget the equity issues
17 | Con g e st ion Pri c i n g

project be successful?” Developing a thorough before/

after planning study to actually measure the results of 

the congestion pricing project can help to answer many 

of the lingering questions raised by the public and decisionmakers. Some of these results can include the extent 

to which the project achieved the institutional goals set 

early in the planning process. Reporting lessons learned 

will transfer knowledge and allow others to apply these 

lessons to new project applications. 

Project evaluation doesn’t need to wait until after the 

project is implemented. In Los Angeles, the I-10/110 

project team conducted an internal lessons-learned 

workshop right after the preliminary engineering phase 

to address some serious policy and design issues. This 

self-evaluation helped the project team to refocus on the 

key project objectives and enabled them to proceed into 

the next phase in a positive manner.

One of the most important planning issues relates to 

traveler equity; specifically, income equity.3

 The benefits of congestion pricing may not be distributed equally 

among all users, giving rise to the popular “Lexus Lane” 

perception. While research has shown that all income 

groups can receive benefits from congestion pricing 

projects and generally support the concept, the income 

equity issue is one that surfaces on almost every project. 

The planning process can help by identifying the imZone-Based Pricing Objectives

There are several examples of how the definition of objectives influenced the design and success of zonebased congestion pricing schemes:

London – The overall focus of the London scheme was to reduce delay for all travelers within central London. 

This goal led to these objectives:

•	Create less delay for remaining traffic 

•	Reallocate road space to environment

•	Improve crossing times for pedestrians

•	Provide modal choices for people

Within this context, most people perceived that they would see some benefits from the pricing scheme. 

New York City – The congestion pricing goals were consistent with the city’s comprehensive sustainability 

plan, which emphasized congestion reduction, cleaner air, and increased funding for mass transit improvements. These goals led to these specific objectives:

•	Reduce Vehicle Miles Traveled in downtown by 6.7%

•	Reduce traffic delays

Raise money for transit. Since most of the toll funds would go towards transit rather than roadway improvements, some drivers felt that the indirect travel time savings would not offset the cost of the toll. 

Stockholm – The goal of the original Stockholm cordon pricing scheme (from the 1990’s) was focused on 

generating revenue to fund a transportation package of improvements. Attempts to subsequently market this 

program under the guise of environmental benefits and reduced congestion helped lead to its failure. Several 

years later, a new pricing scheme was proposed with the following objectives:

•	Improve the environment (air quality, CO2)

•	Improve traffic flow entering the city center

•	Raise transportation funds

This cohesive set of objectives provided a stronger basis for public support and its implementation. 

Manchester (UK) - The Manchester plan did not specify clear objectives and benefits, which may have 

contributed to its lack of public and political support

3 Refer to Federal Highway Administration, Income-Based Equity Impacts of Congestion Pricing, A Primer, December 2008.
Congestion Pri c ing A Primer on Institutional Issues | 18

pacts and benefits to each user group and design the 

project to maximize the benefits. For example, using a 

congestion pricing program to provide improved transit 

service can be a key to public acceptance and addresses 

many of the equity issues that arise. Other related strategies that can address the income equity issue include 

protections for low-income travelers, such as toll credits, 

exemptions, or other forms of monetary compensation. 

Defining the pricing geographic area is an important 

congestion pricing planning issue. This is a particularly 

sensitive issue for zone-based pricing programs, where 

setting the pricing area boundaries defines who pays 

and who doesn’t (a person pays when they cross the 

boundary). In general, larger boundaries are preferred, 

since they affect a fewer number of local trips that stay 

within the boundary. Examples from London and New 

York are described in the text box on the next page. 

The influence area is also important for roadway 

pricing projects, where planners should consider the diversion effects of the priced roadway on parallel freeway 

and arterial facilities. In Seattle, tolls were implemented 

in 2011 on the SR 520 bridge across Lake Washington. 

The toll resulted in a diversion of traffic to a parallel 

bridge (I-90) four miles away. In anticipation of these effects, the State is considering adding tolls to I-90 to balance the traffic demands and smooth the traffic congestion effects. 

For parking pricing applications, creating a large 

enough parking pricing zone to avoid parking competition issues is a planning consideration. In the SFPark 

program, the zone includes most of downtown San 

Francisco, which comprises a large parking market. 

Planning for Roadway Pricing

Roadway pricing projects share a need for setting an understandable planning process with clear objectives. As an 

example, the Atlanta I-85 project team asked the following question at the start of and during the project development: “What are the project fundamentals?” “What is the purpose of this project? “What must be accomplished?” 

Answering these questions led to a definition of key objectives and the identification of which team members would 

be responsible for each action. 

In San Diego, the I-15 project had a specific focus on lane management and maintaining Level of Service C. These 

clear objectives helped to frame inter-agency expectations. 

The Los Angeles I-10/110 team laid out specific project objectives, but during the planning stage team members 

developed some competing expectations around the treatment of HOV 2+ vs. 3+ users in the priced lanes. An 

original objective included allowing HOV 3+ vehicles into the HOT lanes for free, while HOV 2 vehicles would pay the 

toll. This objective generated debate around the local public policy that promotes carpooling at all levels. 

In Seattle the HOV eligibility issue also arose as a policy debate relative to proposed express toll lanes on I-405 and 

for tolling on the SR 520 bridge. On I-405, an existing HOV-2 lane would be converted to dual HOT lanes, with HOV 

3+ vehicles paying no toll. This planning decision affected both revenue estimates and carpool promotion within the 

region. The SR 520 corridor already had an HOV 3+ rule on the managed lane approaching the bridge. In this case, 

the planning decision to charge tolls to all HOVs (vanpools and buses are free) was relatively uncontroversial.

Injecting Private-Sector Initiatives into the Planning Process

In Northern Virginia, a complex planning process was already underway for the Capital Beltway (I-495) expansion 

when the unsolicited HOT lane proposal arrived from the concessionaire. At that time, the I-495 alternatives being 

considered would result in substantial right of way takes and high capital cost. The concessionaire proposal promised 

a smaller project footprint with a much lower price tag. It also brought HOV/HOT lanes and transit benefits into the 

corridor. After substantial review, this design concept was added as a new alternative and the EIS process was 

restarted and completed. Having the EIS process already underway streamlined the approvals and was likely seen as 

a positive factor by the private applicant. 
19 | Con g e st ion Pri c i n g

Setting the Pricing Area Creates Equity Issues

Zone-based congestion pricing schemes deal with a broad range of equity issues. This is because an artificial 

boundary is established, creating different classes of travelers—those who pay and those who don’t. Issues 

surrounding vertical equity (also called income equity) certainly exist, since all travelers must pay. Setting 

the boundary location and size can therefore affect equity. 

In London, income equity was not seen as a huge issue since transit is strong and bus riders would benefit 

the most by the increased transit service. Rather, the primary inequalities were seen as being spatial, with 

primary effects falling on businesses inside/outside of the boundary and near the boundary. 

In the New York City situation, the proposed pricing scheme boundaries encompassed the Manhattan 

business district (initially, from 86 Street to the Battery, and later from 60th Street to the Battery). However, 

the plan also credited tolls paid against the congestion fee, with the result that far more drivers crossing from 

New Jersey would partially or completely escape the congestion fee, as compared with drivers entering from 

Queens, Brooklyn or northern Manhattan/the Bronx. This perceived spatial inequality was a major point of 

contention about the plan. 

Photo source: 495 ExpressLanes, Transurban
Congestion Pri c ing A Primer on Institutional Issues | 20

Public Involvement

An inclusive public involvement plan can build support 

for congestion pricing projects. Public involvement requires a careful blending of informing and listening. 

There is a need for outreach to both decisionmakers and 

travelers, both of whom are dealing with a new transportation approach. Up-front education is important to 

articulate the objectives and benefits of the project in a 

way that is meaningful to the audience. The public outreach plan should try to reach out to all affected travelers, some of whom may only be occasional users of the 

congestion pricing scheme. 

Since money is involved, the public will need to understand what they are receiving in exchange for paying 

a toll or paying more for a parking space. Similarly, decisionmakers need the same information to be able to explain the project to their constituents. Many congestion 

pricing projects also need to reach out to businesses that 

would either be affected by the pricing scheme (e.g., 

access to parking) or whose employees would need to 

pay for traveling to and from work. 

Successful congestion pricing projects keep moving 

ahead. Given the newness of many congestion pricing 

strategies, most projects have found that it is important 

to persevere with the project message, even if there is 

not initial support. Setbacks can occur along the way, 

but keeping the momentum means that the project acceptance doesn’t need to go back to zero if there is a failure. Minneapolis initially tried various ways to implement the MNPASS program, some with more success 

than others. Even with some early failures, MNDOT 

found that public understanding and support grew to a 

new plateau from which new initiatives could be 

launched. Once a project has crossed the basic threshold 

of success, there is an ongoing need to maintain and enhance the project messaging to keep the momentum 

building to avoid moving back to square one. 

For decisionmakers who are unfamiliar with a particular congestion pricing strategy, agencies have used a 

variety of interactive tools—workshops, expert panels, 

peer exchanges, study tours—as a way to engage decisionmakers in the process. Knowing that a strategy has 

been successfully implemented elsewhere provides 

some assurance to a decisionmaker that it could also be 

achieved within their community or region.

Much like any strategy that involves payment of 

money, the initial perception of congestion pricing 

within a community may be negative. A natural political reaction can be to hold a public referendum to gauge 

the level of community support. As described below, 

the few regions (all in Europe) that have held public referendums on a congestion pricing scheme prior to implementation have given mixed reviews to that strategy. 

Typically the public doesn’t understand enough about 

the congestion pricing objectives and potential benefits 

to weigh the tradeoffs versus the perceived individual 

costs. 

The outreach strategies are ultimately aimed at creating a knowledgeable traveling public and gaining support. In addition to providing timely and ongoing information to the public, some projects have taken proactive 

steps to put mitigations in place before pricing starts. In 

San Diego, SANDAG committed to enhanced bus service in the I-15 corridor to start shortly prior to the

Key Points

•	Articulate the objectives and benefits

•	Persevere, even if you don’t have initial support 

•	An inclusive public involvement plan can build support
21 | Con g e st ion Pri c i n g

beginning of the HOT lane project. Similarly, as part of the SR 520 toll bridge project in Seattle, WSDOT worked 

with the regional transit agency to initiate a substantial increase in express bus service within the SR 520 corridor for 

several months leading up to the start of bridge tolling. This created an expanded transit market and helped to reduce 

traffic diversion effects. In addition, WSDOT provided traffic mitigation funds to local agencies to assist in dealing 

with the expected traffic diversion.

Roadway Pricing Outreach Tips

Roadway pricing evokes strong initial public reactions, typically negative. Each of the operating HOT lane 

projects included extensive public outreach focused on telling the public what HOT lanes are, how they 

operate, and what would be the potential impacts or benefits. 

Some of the tips from these outreach efforts include:

•	Use messaging that emphasizes potential benefits to users, such as using the term “value pricing” and 

giving people a “choice.” San Diego emphasized that “these are managed lanes that are not static and 

can be adapted over time.”

•	Emphasize a regional strategy that diffuses the question “Why us? Why can’t you do it somewhere 

else?” In Los Angeles, they branded the effort as a “program,” not a “project.” 

•	Distinguish between “customer” and “driver.” Roadway pricing creates new “customers” for the 

agency, while the term “driver” implies an impersonal and generic perspective.

•	Keep the outreach going after the project is open. In Minneapolis, there was initial skepticism of the 

I-394 HOT lanes by some communities that didn’t see the potential benefits coming to them. Legislators 

and community leaders persuaded the public to give the project a chance. Once the I-394 project was in 

operation for a few months, people quickly saw the direct benefits to them as travelers and didn’t 

witness any substantial negative effects. The outreach campaign used this information and positive 

opinion polls to further build public support. 

•	Deal directly with community concerns. In Los Angeles, most of the negative reactions to the proposed 

I-10/110 HOT lanes were from legislative and elected officials’ pushback. Anti-pricing elected officials 

had a negative perception of how the HOT lanes would affect equity within their communities. In reality, 

most of the low-income communities were less concerned about the HOT lanes and more concerned 

about using HOT lane revenues to improve transit service along the HOT lanes. 
Congestion Pri c ing A Primer on Institutional Issues | 22

What about Holding a Public Referendum?

In Europe, leaders in charge of planning proposed zone-based pricing 

schemes grappled with the question of whether to ask the public its 

opinion of congestion pricing in the form of a referendum. Here are some 

observations:

•	London – Mayor Livingstone said no vote was needed and moved 

ahead with the project. This points to the centralized decision-making for the London scheme. 

•	Edinburgh – The Scottish government gave approval for the pricing 

scheme contingent on gaining public support. It wasn’t clear that 

the legislature required the city to go to referendum, but they did. 

The Pricing scheme lost by an 80/20 vote. 

•	Manchester – The city held a referendum, including residents of 10 

local authorities. The process became very political. For example, 

local groups lobbied to support candidates if they committed to 

support the referendum. The vote also lost 80/20.

•	Stockholm – The city implemented the pricing scheme first, and 

then held a referendum, which passed 53/47. Speculation was that 

implementing a “pilot” pricing scheme for several months helped to 

build public support.

Public referendums are always difficult to predict, especially dealing with 

an entirely new transportation and revenue concept that includes “tolls.”

SFpark Public Outreach

SFpark conducted a 3-year outreach 

effort to educate the public, the 

private parking operators, and local 

businesses. The program has not 

been very controversial, since it was 

portrayed as a win-win solution, 

including making parking easier to 

find and promising fewer parking 

tickets. 

The city emphasized that the 

program would focus on demand 

management rather than revenue 

generation. The “revenue neutral” 

objective was an important marketing message. The project team 

specifically avoided the use of 

obscure jargon such as “congestion 

pricing” or “traffic management.”
23 | Con g e st ion Pri c i n g

Congestion pricing projects by their nature include revenues, either through tolls, fees, or parking charges. 

Proper accounting for these revenues, and how they will 

be spent, can play a major role in gaining public and 

agency support for the project. The interagency agreements previously discussed can be explicit regarding 

who will be paying, who receives the funds, and how the 

funds will be expended. 

The other side of revenue is cost. Congestion pricing 

projects include a combination of capital costs and operating costs. Capital costs include the one-time costs for 

construction and equipment while operating costs cover 

ongoing staffing, administration, and maintenance expenses. Most congestion pricing project revenues are 

sufficient to cover most or all operating costs, but capital 

cost recovery is highly variable. This is especially true for 

HOV to HOT lane conversion projects, where the revenue stream is relatively low compared to the up-front 

capital cost to create the HOT lanes. As more multilane 

HOT facilities are being developed, there is potential to 

generate more toll revenue and the ability to offset more 

of the capital costs. 

Funding is a major issue with public private partnership arrangements due to the intertwined nature of cost 

sharing vs. risk vs. revenues. Since many concessionaire 

contracts extend for 40 or more years, there is considerable risk involved for whichever party assumes the responsibility for covering project costs in the later years. 

If both parties share the same project objectives, there is 

a greater likelihood that costs and revenues will be equitably allocated. 

Deciding how to allocate revenues often specifies 

who has control over the congestion pricing project. 

Situations that have arisen include the following: 

• Addressing potential revenue shortfalls during project ramp up. The Seattle SR 167 Express Lane and 

Atlanta I-85 projects identified the need to prorate 

revenue expectations to account for the likely slow 

build-up of priced lane demand. Both of these projects were the first HOT lanes implemented within 

their respective regions. 

• Decide how to handle cross-state toll payments. The 

Virginia I-495 Express Lanes are used by many travelers who reside in Maryland. One of the challenges the 

project has faced is how to obtain and allocate toll payments from Maryland drivers. Other priced lane projects also need to deal with out-of-state driver tolls and 

revenues. 

• Revenues are often legislatively mandated to be spent 

on tolled facility. Many states include legislative provisions that mandate that toll revenues be spent on 

the tolled facility or other specified roadways. As 

more priced roadways are implemented within a region, these mandates may limit some flexibility in 

spending the revenues that are generated. 

Revenues in most congestion pricing projects have 

been used largely to offset the ongoing Operations and 

Maintenance costs. Where there are excess revenues, 

there is a desire to both keep the revenues close to home 

as well as distribute funds to benefit a large enough constituency. As previously discussed, spending some 

funds on improved transit creates agency and public 

support. This has been the case on the I-15 managed 

lanes in San Diego and in the London cordon pricing 

scheme. A portion of parking revenues in San Francisco 

are also spent on downtown transit enhancements. 

Managing Costs and Revenues

Key Points

•	Resolve local/regional interplay and how funds would be used

•	Keep the revenues close to home 

•	Giving some revenues to transit helps with equity argument
Congestion Pri c ing A Primer on Institutional Issues | 24

Examples of How Priced lane Projects Address the Revenue Issue

•	 Atlanta – During the I-85 project development, the planning team discussed future revenue allocation, 

but because the project was unlikely to have much excess revenue to deal with in the early years, the 

issue was successfully moved to the back burner. Each of the agencies did have a position on where the 

funds should go, so the topic will arise later as the project matures. 

•	 Miami – The I-95 project team estimated that it would be 2031 before the HOT lanes are making a profit. 

The first priority for surplus revenue would go to operate the corridor. Subsequently, the legislature 

passed a law specifying that once the non-toll funding has been repaid, any remaining toll revenue would 

be used for the construction, maintenance, or improvement of any road on the State highway system 

within the county or counties in which the revenue-producing project is located. 

•	 San Diego – The I-15 HOT lanes generate revenues in excess of operating expenses. SANDAG is 

required to cover its share of the Caltrans cost for operations of the express lanes based on the availability of revenue and the percentage of FasTrak traffic. Any excess revenue must be spent within the 

corridor and, although there is no specific revenue allocation requirement, historically, around 25 percent 

of net toll revenue has been spent on corridor transit investments. In 2012 this amounted to around $1 

million annually. The funds are paid to transit from previous year revenues. 

•	 Minnesota – The enabling legislation allowed the State to borrow from other capital program funds to 

implement a toll facility, but the project revenues must then be used pay back the fund from which the 

money was borrowed. In addition, the Law established that 50 percent of excess revenue (after capital 

recovery and operations) must to be used for transit enhancement and 50 percent must to be used for 

other corridor improvements. This provision added an incentive to support the HOV to HOT conversion.

•	 Virginia – With the private concessionaire involved in the I-495 project, negotiations about costs and 

revenue sharing became a focal point of the project agreement. After negotiations, VDOT agreed to 

share the costs as follows: VDOT would pay 30 percent, the concessionaire would pay 28 percent, and 

the remaining 42 percent would be borrowed with the private sector holding the risk. Over the years, if 

the project profits exceed a specified level, the agreement provides for a profit sharing split proportionally 

among the public and private funding partners.

Administrative Cost Issues with Zone-based Pricing Schemes

A big issue for zone-based congestion pricing schemes is management of administrative costs. Given the 

ongoing need to monitor traffic and process the revenues, administrative costs are typically in the range of 

15-25 percent. The City of London wanted to make sure that its cordon pricing scheme worked well and 

focused extra attention on administration. As a result, the city was spending 40 percent of the pricing 

revenues on overhead costs. This percentage has been reduced as the program has matured and the cordon 

boundary was expanded. 
25 | Con g e st ion Pri c i n g

Photo source: Florida DOT

Managing Parking Revenues 

For parking pricing programs, a successful strategy has been to invest the parking revenue into neighborhoods 

where it’s collected; this has been an objective in Washington, DC. Making this commitment builds agency 

credibility and gives the opportunity to show a direct link between increased prices and the service that’s 

provided.

Parking revenue allocations in San Francisco are set by city charter to go to the SFMTA for funding of transit 

and related programs. Parking management rather than revenue generation was the primary objective of the 

SFpark program. As a result, allocation of revenues was not a big issue during the development of the 

program. The SFpark team did not promise revenue neutrality, but emphasized that some revenues would 

increase (meters) and others would decrease (citations/garages). During the test phase, they also publicized 

that the program would change parking prices as demand requires, thus affecting the overall revenue mix. 
Congestion Pri c ing A Primer on Institutional Issues | 26

Implementation

Once the congestion pricing project has been planned 

and designed, it is time to start the project. 

Implementation addresses a number of topics, including 

construction and roll-out, day-to-day operations, contracting, and use of technology. 

There is a natural tendency to roll out a project as 

soon as practical. This desire should be tempered by the 

need to ensure that the project will be as successful as 

possible. There aren’t too many opportunities to try 

again, so it is important to “get it right” when the project 

opens up.

“Getting it right” can lead agencies to gravitate towards implementing straightforward, non-controversial 

projects as their first foray into congestion pricing. By 

making one project a success, then other opportunities 

may arise. 

Several congestion pricing projects have been marketed as pilot projects, sometimes with a sunset clause 

tied to the results of a detailed evaluation of its effectiveness. The SR 167 HOT Lanes in Seattle was marketed as 

a pilot test, with relatively low expectations given regarding revenue generation. That particular corridor 

had relatively low HOV usage and moderate freeway 

congestion, so its selection as an HOV-to-HOT conversion project was relatively low risk. Its performance success and general lack of controversy has helped to build 

support for HOT lanes in other regional corridors. In 

Atlanta, the I-85 Express Lanes were billed as a “first 

phase,” not a “demonstration project.” This approach 

was successful in giving the impression that the express 

lanes were something new but part of a broader regional 

strategy. 

There are many decisions to make prior to opening a 

congestion pricing program. For priced roadways, one 

of the most important decisions is to create a pre-opening policy for exempt vehicles (e.g. bus, HOV, emergency 

vehicles). These decisions will have been made months 

before, during the project design, but should be

carefully communicated to operating personnel. 

Enforcement responsibilities also need to be clearly articulated to the enforcement agencies to which the 

public will be looking to ensure the integrity of the 

priced facility. 

Ahead of opening, any new technology should be 

thoroughly tested. In today’s fast-paced technological 

world, there is a strong tendency to use the newest field 

equipment and computer systems to provide project efficiencies. In reality, technology may outstrip practicality (and public acceptability), so the provider must balance technical innovation versus risk taking. Other 

areas for full testing are the user interfaces such as toll 

accounting procedures. Establishing convenient user 

payment options is one step that can help build community trust in the project. 

Implementing parties should coordinate the timing 

and magnitude of any mitigation (e.g. actions to minimize impacts of diversion), new facilities (e.g. express 

lane ramps, park-and-ride lots) and complementary services (e.g. transit, ridesharing). Ideally, these actions 

Key Points

•	Set up the implementation process early in the project to 

ensure the program starts successfully

•	Consider pilot projects

•	Balance technical innovation vs. risk taking

•	Make prudent use of technology
27 | Con g e st ion Pri c i n g

should take place concurrent with or before opening the congestion pricing project, to minimize the potential for 

negative reaction from travelers. 

Once the project is up and running, the project team should closely monitor the daily operations. Flexibility is 

key in terms of being able to modify traffic management strategies or other actions in response to changing daily 

conditions. 

Implementing a Parking Pricing Program

Parking pricing programs typically require an investment in parking sensor technology and data management. Often 

these technology changes create new relationships between a city and parking vendors. While the technology is 

important, there are many non-technical, often very simple, implementation issues that will need to be addressed, 

such as making sure that the parking spots are numbered so that a person knows which spot to pay for, perhaps with 

his/her cellphone. 

The San Francisco SFpark program is taking advantage of new parking sensor technology and the city’s expanded 

data management system to provide real-time information to travelers about available parking spaces and their prices. 

Regular interaction takes place between the SFMTA (lead), its meter shop and information technology departments, 

the private company that collects the meter funds, and various meter vendors. This is a case where the city is 

pushing the envelope on available technology but not getting too far ahead of the curve. 

The SFpark program also allows the city to manage employee parking. Previously city vehicles were able to park for 

free at public parking facilities. Now, all city employees, except police, must pay. This change in policy, not directly 

tied to SFpark, reinforces the objective to have the pricing apply to everyone and is important for credibility, since the 

program is asking people to look at parking in a different way

The parking sensors installed by SFpark have created a new level of maintenance requirements for the city, which 

hopes to move away from in-pavement technology within a few years. New York City is also testing sensor technology and also exploring complementary technology, such as cameras and license plate readers for parking availability.
Congestion Pri c ing A Primer on Institutional Issues | 28

Roadway Pricing Implementation Challenges

Each roadway pricing project faces the basic challenges of starting the project successfully and ensuring that 

the priced facility works smoothly over time. However, there are some unforeseen issues that can arise.

For example, the Miami I-95 project faced a couple of particular implementation challenges

1. Develop Pre-opening Policy for HOVs and Exempt Vehicles – The I-95 project elected to develop and 

implement a carpool registration process, which was not in place prior to the HOT lane conversion. They 

also needed to establish a hierarchy for when certain vehicles are “bumped out” of the HOT lanes based 

on traffic conditions (for example: buses,3+ HOV, Hybrids, 2+ HOV)

2. Develop agreements between transit agencies (across county lines) – Given the long length of the 

I-95 project, there are multiple transit agencies involved. Issues needing to be addressed during 

implementation included:

a. What if a bus in one county breaks down in the other county? 

b. Can we unload from one bus to another bus (even though it’s a different county’s bus).

c. How can we gain cooperation when one agency doesn’t want to work with the other agency’s bus?

The project team was able to have the transit agencies agree to help with transferring passengers and setting 

up rules regarding fares.

The San Diego I-15 project went through various implementation stages. It started as a 2 year pilot project 

using a simple decal program. The agencies used this pilot to gauge success and then received broader 

legislative approval. Later on there were some concerns about the timing of the tolling to match the opening 

day of the express lane project. There were also many issues surrounding the customer accounts, such as 

payment of a monthly administrative fee. These were worked out over time. When the express lanes were 

extended from 8 to 20 miles, Caltrans needed to provide more access (initially just one access point, now 22). 

This major operational change led to higher operating and maintenance costs, including enforcement. Finally, 

with the I-15 express lanes extension having multiple access points, dynamic per-mile tolls were introduced to 

replace a single distance-based toll used on the original HOT lane project. These changes required more 

sophisticated design features but also provided the ability to process a multitude of tolls collected electronically at different points along the corridor. 

The Minnesota I-394 project provides a good example of needing to set up and operate an efficient and 

credible toll collection system. MNDOT hired an internationally reputable toll operator, which was provided 

space at a State-owned customer service center. An initial public concern was that the toll authority would 

price the facility to maximize revenue collection and then use the revenue how they pleased. Apart from State 

legislation that specifies how the funds should be collected and accounted for, MNDOT established strict 

protocols. The operator collects the money for MNDOT and deposits the money directly into a State account, 

eliminating the possibility of fraud. The operator was hired under a professional technical services agreement, 

so there are no incentives regarding the amount of revenue collected.
29 | Con g e st ion Pri c i n g

Congestion pricing injects new challenges into implementing transportation projects. These challenges are 

found both internally within an agency and externally 

in the public and among outside partners. By its definition, congestion pricing uses monetary pricing to help 

manage the transportation system. A byproduct of this 

pricing is revenue, which attracts a number of constituencies who have good ideas for how they could spend 

the money. Many of the congestion pricing challenges 

fall into a broad category of “institutional issues,” which 

have been explored in this primer. 

The following institutional issues tend to cut across 

the different types of congestion pricing projects: variably 

priced lanes, zone-based pricing, and parking pricing:

• Strong leadership – The newness of congestion pricing and typical skepticism by the public puts the onus 

on a project champion to guide the project though 

planning, design and implementation. Leaders can 

emerge from the political, civic, or private-sector. 

• Clear authority – Most congestion pricing projects 

need some form of enabling legislation that should 

clearly identify who is in charge and what outcomes 

are expected. Clear authority is also needed within 

the project team.

• Many Partners – Pricing brings many new players to 

the transportation scene, including private sector investors. Traditional agencies and these new partners 

must be melded into a cohesive team. The organization should be structured to fit the needs of the project, not vice versa.

• Know the objectives – Agreeing to specific project 

goals and objectives up front in the process keeps everyone focused and creates a consistent message for 

the public and decisionmakers. 

• Educating the Public – The public knows they will 

need to pay for something new, but what will they get 

in return? Educating the public on the purpose of the 

pricing scheme and what benefits they can receive is 

crucial to gaining support.

• Know where the Money is Going – Keeping the revenues “close to home” usually provides the most benefits to the people who are paying.

• Get it Right – Money is involved and the public is unsure, so work out the technology, accounting, and design issues before turning on the switch. 

• Flexibility – There will likely be some crises with every project, but staying flexible helps to avoid surprises and allows for a more effective response. 

These institutional issues point to a substantial shift 

in how traditional transportation agencies implement 

their projects. Suddenly, agencies now have many new 

“customers” who are using this new service. The move 

towards customer service requires a new organizational 

approach and a new type of leadership. As various types 

of congestion pricing projects continue to be deployed, 

organizations can build on the institutional ideas summarized in this primer to make their programs more 

successful.

Lessons Learned
Congestion Pri c ing A Primer on Institutional Issues | 30

References 

1. Federal Highway Administration. (2012, May). Contemporary Approaches to Parking Pricing: A 

Primer (FHWA Pub. No. FHWA-HOP-12-026). Washington, DC.

2. Gudmundsson, Henrik et al. (2009, March). Framing the role of Decision Support in the case of 

Stockholm Congestion Charging Trial. Elsevier Transportation Research Vol 43A, Issue 3.

3. Peters, Jonathan and Cameron Gordon. (2009, April). Results Not Guaranteed: A Tale of Road 

Pricing in New York and London. Journal of Urban Technology, 16:1,113-131.

4. Schaller, Bruce. (2010, March) New York City’s Congestion Pricing Experience and Implications 

for Road Pricing Acceptance in the United States. Elsevier Transportation Research Vol 17.

5. Gordon, Cameron and Rich Flanagan. (2012, January). The Politics of Urban Congestion Pricing: 

Cautionary Tales from New York. Transportation Research Board Annual Meeting 

Compendium.

Resources 

The following individuals were interviewed to discuss institutional issues related to specific 

congestion pricing programs. 

Project Organization Persons Interviewed

Variably Priced Lanes

I-394, I-35W (Minneapolis, MN) Minnesota Department of 

Transportation

Ken Buckeye

I-95 (Miami, FL) Florida Department of 

Transportation

Rory Santana

Jeff Weidner

I-495 Capital Beltway (Northern 

Virginia)

Virginia Department of 

Transportation Transurban, 

Inc.

Malcolm Kerley

Ken Daley

I-15 (San Diego, CA) San Diego Association of 

Governments

David Schumacher

Sam Johnson

I-10, I-110 (Los Angeles, CA) Los Angeles County 

Metropolitan 

Transportation Authority

Stephanie Wiggins

I-85 (Atlanta, GA) Georgia State Road and 

Tollway Authority

Patrick Vu

References and Resources
31 | Con g e st ion Pri c i n g

Project Organization Persons Interviewed

Variable Tolls on Entire Roadways

SR 520 (Seattle, WA) Washington State 

Department of 

Transportation

Jennifer Charlebois

Zone-based Charges

London and United Kingdom Leeds University Anthony May

London and New York City University of Canberra Cameron Gordon

New York City New York City Department 

of Transportation

Tom Maguire

Stockholm and Gothenburg, 

Sweden

WSP Group, Sweden Dirk van Amelsfort, 

Karin Brundell-Freij

Parking Pricing

SF Park (San Francisco, CA) San Francisco Municipal 

Transportation Authority

Jay Primus

The FHWA Primer Contemporary Approaches to Parking Pricing (2012) provides additional 

insights into the complexities of implementing parking pricing programs, including examples 

from Seattle, New York City, Chicago, Los Angeles, Washington, DC, Ventura, CA and 

Aspen, CO.

The FHWA conducted a peer exchange in Washington, DC (May 2012) to discuss the range 

of institutional issues associated with a range of congestion pricing projects. The following 

professionals participated in the peer exchange. 

Federal Highway Administration 

• Angela Jacobs

• Wayne Berman

• Alan Greenburg

Georgia State Road and Toll Authority

• Patrick Vu

Florida DOT

• Rory Santana

Los Angeles County MTA

• Stephanie Wiggins
Congestion Pri c ing A Primer on Institutional Issues | 32

Bay Area MTC

• Lisa Klein

New York City DOT

• Bruce Schaller

San Francisco MTA

• Jay Primus

Washington State DOT

• Rob Fellows

Sound Transit (Seattle)

• Jim Edwards

San Diego Association of Governments (SANDAG)

• Dave Schumacher

Minnesota DOT

• Nick Thompson

Transurban

• Ken Daley

D’Artagnan Consulting

• Jack Opiola

SAIC

• Myron Swisher

Fehr & Peers

• Don Samdahl

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

April 2013

FHWA-HOP-13-034