Reducing Congestion: Congestion Pricing Has Promise for Improving Use of Transportation Infrastructure
Published: 2003-05-06T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The nation's transportation systems have become increasingly congested, and pressure on them is expected to grow substantially in the future. Most transportation experts think a multifaceted approach is needed to address congestion and improve mobility. One potential tool is congestion pricing, that is, charging users a toll, fee, or surcharge for using transportation infrastructure during certain peak periods of travel. Pilot projects to test this approach are currently under way in the United States and the technique has been used more extensively abroad. Interest in the usefulness of congestion pricing has been growing, as evidenced by several recent proposals. However, there have also been concerns raised about the fairness of such practices to some users of transportation systems. GAO was asked to identify (1) the potential benefits that can be expected from pricing congested transportation systems, approaches to using congestion pricing in transportation systems, and the implementation challenges that such pricing policies pose, and (2) examples of projects in which pricing of congested transportation systems has been applied to date, and what these examples reveal about potential benefits or challenges to implementation. This statement is based on prior GAO reports and other publicly available reports.
section_title: What GAO Found
paragraphs: Congestion pricing can potentially reduce congestion by providing incentives for drivers to shift trips to off-peak periods, use less congested routes, or use alternative modes, thereby spreading out demand for available transportation infrastructure. Congestion pricing also has the potential to create other benefits, such as generating revenue to help fund transportation investment. Possible challenges to implementing congestion pricing include current statutory restrictions limiting the use of congestion pricing, and concerns about equity and fairness across income groups. In theory, equity and fairness concerns could be mitigated depending on how the revenues that are generated are used. Evidence from projects both here and abroad shows this approach can reduce congestion. Such projects have also shown they can generate sufficient revenue to fund operations--and sometimes fund other transportation investment as well. However, projects were not necessarily able to demonstrate benefits for the full range of transportation users. For example, those who were able to use the special freeway lane saw a decrease in travel time. But, in some cases, there was little systemwide reduction in travel times, and congestion increased on alternative routes. Nonetheless, there is some evidence that equity and fairness concerns can be mitigated. Some projects have shown substantial usage by low-income groups, and other projects have used revenues generated to subsidize low-cost transportation options. In addition, some recent proposals for refining congestion-pricing techniques have incorporated further strategies for overcoming equity concerns. For example, the Fast and Intertwined Regular (FAIR) lanes proposal in New York suggests crediting users of the non-tolled lanes to partially pay for them to use public transportation, or to use the express lanes on other days.

section_title: Letter
paragraphs: We appreciate the opportunity to offer this statement for the record about  the role that charging fees for the use of congested transportation  infrastructure can play in improving mobility in our nation’s transportation  systems. There is widespread agreement that mobility is essential for a  strong economy. It provides people with access to goods, services,  recreation, and jobs; it provides businesses with access to materials and  markets. It also promotes the movement of personnel and material to meet  national defense needs. However, our transportation systems—for surface,  maritime, and air transportation—have become increasingly congested. By  some measures, for example, overall roadway congestion has increased  more than 50 percent between 1982 and 2000 in some of the largest  metropolitan areas. Congestion results in significant costs to the  environment through increased pollution, and to individuals and  businesses through wasted energy, time, and money.
In recent reports covering all three of these transportation systems, we  have analyzed ways to make these systems operate more efficiently— including ways to do so without major new capital investment. One such  approach involves congestion pricing—that is, charging a higher price to  use the system during peak periods or on congested routes. Doing so  provides incentive for users to shift to less congested times or make other  adjustments. Those who value the service enough will pay the additional  price; those who value it to a lesser degree will shift their use accordingly.  Currently, there is renewed interest in the role that congestion pricing can  play in enhancing mobility, as evidenced by several recent proposals to  institute pricing policies from industry, interest groups, and the  Department of Transportation.
My statement for the record is meant to provide some overall perspective  on what we have learned about congestion pricing. It addresses (1) the  potential benefits that can be expected from pricing congested  transportation systems, approaches to using congestion pricing in  transportation systems, and the implementation challenges that such  pricing policies pose, and (2) examples of projects in which pricing of  congested transportation systems has been applied to date, and what these  examples reveal about potential benefits or challenges to implementation.  My statement today is based in large part on our prior work in all three  types of transportation systems. We have also gathered additional  information by reviewing publicly available reports on a number of  projects that are part of the Federal Highway Administration’s Value  Pricing Pilot Program, a program that funds projects that demonstrate the  potential of congestion pricing to address congestion problems, and on  selected projects in other countries.
According to several reports from the Transportation Research Board and  others, applying congestion-pricing methods to our nation’s transportation  systems could have potential to help reduce congestion and enhance  mobility by providing incentives to shift travel to off-peak periods or less  congested routes, thereby more efficiently using transportation  infrastructure. Congestion pricing also has the potential to create other  benefits, such as generating revenue to help fund investment in  transportation systems directly from users. While there are a number of  potential benefits, implementing pricing methods for our transportation  systems faces numerous challenges. Opportunities to pursue congestion  pricing are limited because of current statutory restrictions limiting the  use of congestion pricing and concerns about equity and fairness. For  example, federal statutes restrict the charging of tolls on interstate  highways, except where tolls previously existed or where exceptions have  been made for pilot projects. Concerns about equity center around the  effect that congestion pricing may have on lower-income groups. The  economics literature suggests that these concerns can be mitigated  somewhat because all income groups could conceivably benefit from  congestion pricing, depending on how the revenues generated are used.
A number of congestion pricing projects are in place in surface and air  transportation systems, both here and abroad. For the most part, they  demonstrate that congestion pricing can be successful in generating  greater economic efficiency and reducing congestion within transportation  systems. Pricing projects have also successfully shown that they can  generate revenue sufficient to fund their operation and, in some cases,  fund the operation of additional transportation projects as well. For  example, in San Diego, where users pay a toll to use a less crowded  freeway lane, some of the revenues are used to operate a new express bus  service, providing commuters with more travel options. However, in at  least one circumstance, congestion pricing was not as effective in reducing  travel during peak periods, either because travelers had little or no choice  other than to travel at peak times or on peak routes, or the congestion toll  was set too low to influence demand. Projects were also not necessarily  able to demonstrate benefits for the full range of transportation users. For  example, those who were able to use the special freeway lane saw a  decrease in travel time, but in some cases there was little systemwide  reduction in travel times, and congestion increased on alternative routes.  Nonetheless, there is some evidence that equity and fairness concerns can  be mitigated. Some projects have shown substantial usage by low-income  groups, and other projects have used revenues generated to subsidize low- cost transportation options. In addition, some recent proposals for refining  congestion-pricing techniques have incorporated further strategies for  overcoming equity concerns. For example, the Fast and Intertwined  Regular (FAIR) lanes proposal in New York suggests crediting users of the  non-tolled lanes to partially pay for them to use public transportation, or  to use the express lanes on other days.
subsections: section_title: Background
paragraphs: Major capital investment in highways, public transportation systems,  waterways, and airports are currently funded, in part, through various  taxes and fees on users, such as fuel taxes or sales taxes; landing fees and  docking fees; and tolls on certain roads, tunnels, and bridges. However,  these revenue-raising instruments do not always provide strong incentives  for efficient use of transportation infrastructure. For example, the tax  rates on gasoline, which are the same regardless of whether vehicles are  traveling during congested or uncongested periods, provide no incentive  for travelers to use the infrastructure more efficiently. Similarly, landing  fees at airports that are based on aircraft weight help create incentives for  airlines to shift to smaller, lighter aircraft providing more frequent service,  which results in increased demand for runways at peak times and  therefore increased congestion.
Due in part to increasing volumes of traffic, as well as these built-in  disincentives to the efficient use of the transportation infrastructure,  congestion on our nation’s highways, airways, and waterways remains a  national problem. On already crowded roadways, passenger vehicle travel  is expected to grow by almost 25 percent this decade, and freight  movement by trucks may grow by a similar amount. In the nation’s air  transportation system, before the terrorist attacks on September 11, 2001,  an unprecedented number of delays in commercial airline flights  occurred—a substantial part of which were due to airport and airspace  congestion, particularly during peak morning and evening hours. At 31 of  the nation’s busiest airports, 28 percent of the domestic flights arrived late  in 2000. While flight congestion declined significantly with reduced traffic  after the attacks, a more robust economy and less public apprehension  about flying will likely lead to renewed demands on the air transport  system. At locks on our inland waterways and at major seaports,  congestion has also been growing. For example, the U.S. Army Corps of  Engineers estimated that 15 key locks would exceed 80 percent of their  capacity by 2020 as a result of the expected growth in freight travel, as  compared to 4 locks that reached that level in 1999, resulting in  significantly increased delay.
Numerous methods can be used to address congestion, including building  new infrastructure, improving maintenance and operation of  infrastructure, and using the existing infrastructure more efficiently  through demand management strategies, including pricing mechanisms.  Experts with whom we talked said that consideration of a full range of  these methods is likely necessary to ease our nation’s transportation  congestion. In theory, congestion pricing, as one of these methods, is  useful for mitigating the delay costs of congestion. If highway, aviation,  and waterway users were charged extra for peak-hour use, some would  shift to less busy times, or make other adjustments, thereby alleviating  delay at the peak periods.
Many other areas of the economy frequently use peak-period pricing  mechanisms when demand varies considerably by time of day or season.  Electricity providers, for example, often charge higher prices at peak  periods and lower prices when demand is reduced. Other industries with  common peak-pricing practices include telecommunications, airlines, and  hotels and resorts. In addition, Amtrak and some transit systems use peak- period pricing.
section_title: Research Suggests Significant Benefits, but Some Challenges, to Implementing Congestion Pricing
paragraphs: In theory, using congestion pricing has the potential to enhance economic  efficiency, as well as provide other benefits, such as providing market  signals that can guide capital investment decisions, and generating  revenue to help fund such investment directly from users of the system.  There are several approaches to implementing congestion pricing on roads  and at airports. However, incorporating pricing into our transportation  systems involves overcoming several implementation challenges, such as  current restrictions on using congestion pricing on our highways and on  runways, and equity and fairness concerns.
subsections: section_title: Congestion Pricing May Encourage Greater Economic Efficiency, and Provide Other Benefits
paragraphs: Economists generally believe that charging automobile, truck, vessel, and  aircraft operators surcharges or tolls during congested periods can  enhance economic efficiency by making them take into account the  external costs they impose on others in deciding when, where, and how to  travel. In congested situations, external costs are substantial and include  increased travel time, pollution, and noise. The goal of efficient pricing on  public roads, for example, would be to set tolls for travel during congested  periods that would make the price (including the toll) that a driver pays  for such a trip equal or close to the total cost of that trip, including  external costs. In theory, these surcharges could help reduce congestion  and the demand for road space at peak periods by providing incentives for  travelers to share rides, use transit, and travel at less congested (generally  off-peak) times or on less congested routes.
Peak-period pricing may have applicability to other modes as well. For  example, congestion pricing for using locks on our nation’s inland  waterways might be a way to reduce delays experienced by barge  operators. Similarly, congestion pricing at commercial airports—that is,  charging higher landing fees during congested periods—would cause  aircraft operators, both airlines and general aviation operators, to consider  external costs in making their decisions. As a result, there would be  incentives to shift some operations to off-peak hours or secondary airports  or to provide the same carrying capacity by operating fewer but larger  aircraft.
In addition to increasing the efficiency with which current transportation  infrastructure is used, congestion charges may be helpful in guiding capital  investment decisions for new facilities. As congestion increases, the delay  cost that an additional user of the system causes for other users also  increases. If congestion charges are set such that they reflect external  costs, then as congestion increases, congestion surcharges will increase.  Rising surcharges provide signals of increased demand for specific  increases in physical capacity, indicating where capital investment  decisions to increase capacity would be most valuable. At the same time,  congestion charges will provide a ready source of revenue for local, state,  and federal governments and transportation facility operators to fund  these investments in new capacity that, in turn, can reduce delays. In some  cases and over a longer period, in places where external costs are  substantial, and congestion surcharges are relatively high, this form of  pricing might influence land-use plans and the prevalence of  telecommuting and flexible workplaces.
section_title: Various Possible Approaches to Setting and Collecting Surcharges Exist
paragraphs: Congestion pricing could be applied to transportation systems in a variety  of ways, and there are several possible approaches related to which  facilities are priced, how the price is set, and how the toll is collected.
subsections: section_title: Approaches for Roads
paragraphs: In one possible form of congestion pricing for public roads, tolls would be  set on an entire roadway or road segment during periods of peak use. In  another form, sometimes known as value pricing, peak-period tolls would  be set on only some lanes of a roadway, allowing drivers to choose  between faster tolled lanes and slower non-tolled lanes. High-occupancy  toll (HOT) lanes, under which drivers of single-occupancy vehicles are  given the option of paying a toll to use lanes that are otherwise restricted  to high-occupancy vehicles, are an example of value pricing. Fast and  Intertwined Regular (FAIR) lanes is a recent proposal that is another  variation of value pricing. Under the FAIR lanes approach, revenues  generated from travelers using electronically tolled lanes would be  transferred to travelers using adjacent non-tolled lanes on the same  roadway. These transfers would be done through electronic transponders  in the vehicles using the toll lanes, as well as the non-tolled lanes. Those in  the non-tolled lanes would receive a credit equal to 25 to 50 percent of the  current effective toll, which could then be used toward public  transportation fares or toward the use of the toll lanes on another day. In  this way, drivers in the non-tolled lanes would receive compensation for  the additional congestion that may result from increased use of those  lanes once tolls are placed on other lanes. In a third form of congestion  pricing for public roads, known as cordon-based pricing, drivers would be  charged a fee for entering a specific area of a city, such as a central  business district, at peak hours.
section_title: Approaches for Airports
paragraphs: Two commonly mentioned methods of applying the concept of congestion  pricing at airports are differential pricing and auctions. Under differential  pricing, airports would set landing fees higher at times when demand for  takeoff and landing slots exceeded their availability, and lower at other  times, in effect applying a surcharge for using the system at peak-demand  periods. An auction approach would allow airports to periodically auction  a fixed number of takeoff and landing slots—equal to the airport’s  capacity—to the highest bidders. For example, an airport, in conjunction  with the Federal Aviation Administration, could determine its per-quarter- hour takeoff and landing capacity, and a competitive bidding process  among carriers could determine fees during each period, which would also  result in surcharges for using the system at peak-demand periods.
section_title: Structuring and Setting the Tolls
paragraphs: Congestion pricing tolls could be levied using either a predetermined or  variable approach. Under the predetermined approach, drivers would pay  tolls that are preset and fixed according to the time of day they travel. In  contrast, under the variable approach, drivers would pay tolls that vary  according to the level of congestion on an affected roadway. For either  approach, the amount of the toll to be levied would likely be set by state or  local officials, or other toll facility operators, based on information from  roadway usage and traveler surveys. The toll structure may also be  influenced by the judgment of the toll facility operators. These tolls could  then be adjusted upward or downward based on the use of the toll facility  in relation to the optimal flow of traffic on the facility.
section_title: Collecting Tolls
paragraphs: Electronic methods of collection from users of public roads offer vast  increases in efficiency compared to traditional tollbooths, which are labor  intensive and relatively expensive to operate, and create congestion as  drivers line up to pay their tolls. And, over the past decade, electronic road  pricing technology has become more reliable and, as a result, more widely  adopted on many toll facilities. According to a report issued by the  Transportation Research Board, technologies that are currently used at  some toll facilities to automatically charge users could also be used to  electronically collect congestion surcharges without establishing  additional tollbooths that would cause delays. In application of cordon- based pricing, drivers would typically purchase and display permits that  allow them access to the cordoned section of the city before entering.  Daily or monthly permits could be differentiated by color and shape for  easy enforcement.
section_title: Challenges to Implementing Congestion Pricing Include Legal Restrictions and Concerns about Fairness and Equity
paragraphs: One challenge in implementing congestion pricing for transportation  systems is that, at present, greater use of pricing is limited by statutory  restrictions. For example, tolls are prohibited on the Interstate Highway  System, except for roads that already had tolls in place before they were  incorporated into the system (e.g., the New Jersey and Pennsylvania  Turnpikes) or where exceptions have been made for the implementation  of pilot projects. Also, there are a variety of statutory restrictions on  landing fees at airports that can limit use of congestion pricing. Landing  fees are typically based on aircraft weight and are required to be set at  levels designed to recover the historical costs of providing landing  services. Costs imposed by congestion and other externalities cannot be  considered in the calculation of the cost base and, hence, cannot be  recovered in landing fees. Congestion fees, as well as most other types of  fees, are also prohibited on the inland waterways because of the Interstate  Commerce clause, according to the Army Corps of Engineers. Therefore,  addressing some of these restrictions would be necessary to make greater  use of congestion pricing.
Another challenge involves effectively addressing concerns raised about  equity and fairness. Because of this issue, political opposition to using this  approach to address mobility challenges has been substantial. One equity  concern that has frequently been raised about congestion pricing of public  roads has been the potential effects of surcharges or tolls on lower-income  drivers. Because a surcharge would represent a higher portion of the  earnings of lower-income households, it imposes a greater financial  burden on them and, therefore, is considered unfair. The economics  literature suggests that these concerns can be mitigated to some degree.  For example, proponents of congestion pricing have noted that all income  groups could potentially benefit if there is an appropriate distribution of  the revenues obtained through congestion pricing. These revenues could  be used to build new road capacity, given back as tax rebates tilted toward  lower-income households, or used in some other way so that, in theory,  the net benefits for each income group would exceed its costs.
Although equity considerations could potentially be addressed by  constructing a congestion pricing system for roads so that all income  groups received net benefits, there could still be individuals who would be  negatively affected. In theory, the cost of a surcharge or toll would be less  for those who could more readily make adjustments to their driving  behavior that would allow them to avoid paying the toll. Conversely,  drivers who had little flexibility to alter their work schedules to avoid a  toll by traveling at off-peak hours could potentially be more affected than  workers with such flexibility. Similarly, those whose commuting patterns  make it harder for them to form carpools or use transit could also be more  affected.
The arbitrary nature of these distinctions, as well as opposition from those  who find the concept of restricting lanes or roads to people who pay to  use them to be elitist, raises fairness concerns and accounts for some of  the political opposition to congestion pricing. More generally, there is  often opposition to paying a charge to use something that was formerly  provided “free.”
section_title: Existing Projects Show That Benefits Can Result, and Some Evidence Suggests That Implementation Challenges Can Be Mitigated
paragraphs: A number of existing congestion-pricing transportation projects, both here  and abroad, show that pricing can influence travelers’ behavior to the  point of reducing congestion and thus increasing economic efficiency. For  example, value pricing pilot projects in the United States show  considerable usage and have provided users with a less congested  alternative, thus improving traffic flows and reducing delays. In addition,  congestion-pricing mechanisms, in general, have demonstrated that they  can generate revenue sufficient to fund their operation and, in some cases,  fund investment in transportation alternatives. The available evidence also  suggests that implementation challenges can be mitigated, although to  what extent is not yet clear.
subsections: section_title: Projects Provide Evidence of Increased Economic Efficiency
paragraphs: A number of the congestion-pricing projects we identified enhanced  transportation mobility through improved traffic flows, increased speeds  and reduced delays for some users. One way in which some projects have  done so is by channeling some drivers into infrastructure that is not being  fully utilized even at peak periods. In several locations in the United  States, for example, HOT lane projects have been implemented in which  vehicles with fewer passengers than would normally be needed to use high  occupancy vehicle lanes have been allowed to use such lanes by paying a  toll. High occupancy vehicle lanes are generally less congested than other  highway lanes, and drivers who use them are thus able to shorten their trip  times. The toll for such use varies, increasing during periods of peak  congestion. In such HOT lane or value pricing projects in Orange County  (as shown in figure 1) and San Diego, California, and Houston, Texas,  drivers willing to pay to use the HOT lane saved an average of 12-20  minutes per trip in the peak period. In addition, some projects were able to  shift demand on congested infrastructure to less congested time periods.  In San Diego, officials were also able to spread out peak period traffic on  the toll lanes over a longer period of time by charging a lower toll just  before and just after the peak period.
In many instances, however, a congested transportation system may have  no equivalent to a high occupancy vehicle lane with additional capacity. In  these cases, some other congestion pricing models have been used to  encourage travelers to shift their behavior, either by traveling at another  time or by using alternative transportation modes, such as buses, trains, or  carpools. For example, in Singapore, London, and Norway, congestion  pricing has taken the form of cordon-based pricing, where drivers pay to  enter entire regions. These projects have demonstrated significant  decreases in the level of congestion on roads in the cordoned area and  some significant shifts to other alternative modes, as follows:  In Singapore, the city government instituted a $1 charge in 1975 for private  vehicles to enter the central business district in the morning rush hours.  Carpools, buses, motorcycles, and freight vehicles were exempted from  the charge. The result was an immediate 73 percent decline in the use of  private cars, a 30 percent increase in carpools, and a doubling of buses’  share of work traffic.
In London, recent implementation of cordon tolls resulted in traffic  decreases of roughly 20 percent, and about a 14 percent increase in the  use of buses during the morning commute.
In Trondheim, Norway, cordon tolls produced a 10 percent reduction in  traffic at peak times and an 8 percent increase in traffic in off-peak times  in the central business district.
Such projects have similarly been used to relieve congestion at crowded  airports. In one case, the Port Authority of New York and New Jersey  imposed surcharges beginning in 1968 for peak-hour use by small aircraft  at Newark, Kennedy, and La Guardia airports. These small aircraft, known  as “general aviation” aircraft, were not part of scheduled airline  operations. The need to accommodate takeoffs and landings for these  aircraft during peak periods was adding to passsengers’ delays on  scheduled airline flights. The port authority raised the peak-period  minimum take-off and landing fees for aircraft with fewer than 25 seats  from $5 to $25, while keeping the off-peak fee at $5. As a result of the  surcharges, general aviation activity during peak periods decreased by 30  percent. The percentage of aircraft operations delayed more than 30  minutes declined markedly over the same period. Similarly, in 1988 at  Boston’s Logan Airport, the Massachusetts Port Authority adopted a much  higher landing fee for smaller aircraft. Like the three New York and New  Jersey airports, Logan experienced a large drop-off in use by smaller  aircraft. Much of the general aviation abandoned Logan for secondary  airports, and delays at Logan dropped.
section_title: Projects Can Also Provide Support for Other Transportation Alternatives
paragraphs: Proponents of congestion pricing have noted that others besides those  who can afford to pay congestion pricing costs can share in the benefits  through an appropriate distribution of any revenues generated. A part of  these revenues will be needed to administer the system—for example, to  collect tolls. However, existing projects also contain a few examples of  situations in which the revenues generated from congestion pricing have  been used to benefit other transportation alternatives. For example, the  revenue from the HOT lane project in San Diego has been sufficient not  only to pay for toll takers and other administrative expenses, but also to  fund the operation of a new express bus service. This has increased travel  choices for all area commuters, including lower-income populations.
International experiences with congestion pricing have been somewhat  more extensive and revenues generated from congestion tolls have been  substantial. In Singapore, only about 12 percent of the revenue generated  from their cordon-based tolls have been needed to cover the costs of  operation. In Trondheim, Norway, revenues have exceeded capital and  operating expenses of the toll facility by 5 times. Trondheim’s toll facility  currently generates about $25 million in profit per year. These profits have  been used to enhance the capacity of the entire transportation system,  including financing additional road infrastructure as well as subsidizing  public transportation facilities and services, and pedestrian and bicycle  facilities.
section_title: Extent to Which Equity and Fairness Issues Can Be Mitigated Is Not Yet Clear
paragraphs: There is some encouraging evidence with regard to mitigating equity and  fairness issues in implementing congestion pricing, although the extent to  which these concerns can be mitigated is unclear. At least one project we  reviewed indicates that implementation of congestion pricing needs to be  carefully evaluated as an alternative in some circumstances, because it  provides no automatic guarantee of benefits. In Lee County, Florida, the  county instituted variable tolls on two bridges based on peak travel  periods. The county reduced the toll for using the bridges in off-peak  periods. On one bridge, traffic increased during the off-peak period but  decreased very little during the peak period. A study from the University of  South Florida found that peak-period demand for the bridge was not as  flexible as compared to demand during off-peak periods. That is, drivers at  peak periods may not have readily available alternatives to commute at  different times, use a different mode of transportation, or take another  route, and therefore have little choice but to use the bridge during the  peak period, or the price of the congestion toll was set too low to  influence the demand of those users. The example illustrates the fact that  a pricing mechanism may not be very effective at reducing peak-period  travel if the price is not set properly, or without additional measures that  provide travelers with other choices.
Although the congestion pricing projects we reviewed produced little  evidence of congestion reductions in adjoining lanes or in other alternative  routes, they also produced little evidence that congestion increased in the  non-tolled lanes or on alternative routes. For example, while the value  pricing projects in California and Texas resulted in less congested  alternatives for individuals willing to pay the toll, only one of the projects  was able to demonstrate any decreases in congestion on the remaining  “free” lanes of the highway. In Orange County, California, a study found  that opening two new lanes, which were designated as congestion toll  lanes, decreased delays on the other “free” lanes from 30-40 minutes to  about 12-13 minutes, while traffic remained stable on alternative nearby  freeways. However, there is also some evidence that pricing can increase  congestion on alternative routes. In Singapore, where the city used cordon  pricing, there was deterioration in traffic conditions just outside the  cordoned area caused by travelers attempting to bypass it. Such  congestion would adversely impact individuals who do not pay the toll or  individuals not using the congested facility. However, at least one study  said that the costs of increased traffic on alternative routes did not  outweigh the benefits of reduced congestion in the cordoned area.
There are other encouraging signs in relation to distributional impacts  from existing projects, although there is no conclusive evidence on the  distributional impacts of congestion-pricing techniques. A report on the  value-pricing project in Orange County found that there was significant  usage of the toll facility by individuals at all income levels. This  demonstrates that low-income individuals also value the time they save,  and that some value their time enough to be willing to pay a toll that  amounts to a higher percentage of their income than that paid by  individuals with greater income. However, in value-pricing pilot projects in  Orange County, San Diego, and Houston, those using the toll lanes tended  to have higher incomes than those using the adjoining lanes.
Experts have noted that tolls might become more acceptable to the public  if they were applied to new roads or lanes as demonstration projects, so  that tolls’ effectiveness in increasing commuter choices could be  evaluated. For example, in the Orange County pilot project, where two  new toll lanes were added to the highway, opinion surveys have shown a  high rate of public acceptance. Other pilot projects in Houston and San  Diego have also demonstrated public satisfaction. In addition, recent  proposals, such as FAIR lanes and HOT networks, show promise to further  mitigate equity and fairness concerns. FAIR lanes, as previously discussed,  and which have been proposed in New York, would credit users of the  adjoining lanes, using revenues generated by the toll lanes, allowing those  users to use the toll lanes on another day for a reduced or no charge. The  HOT network proposal couples HOT lanes with bus rapid transit  initiatives, similar to the experience of the pilot project in San Diego,  thereby using the revenues from the tolls to broaden the transportation  alternatives available for all commuters, including lower-income  populations.
section_title: Concluding Observations
paragraphs: Traffic on already congested surface, maritime, and air transportation  systems is expected to grow substantially over the next decade. This  congestion can be considered a shortage; it occurs when more services— from lanes of highway, airport runways, locks on rivers—are demanded  than can be supplied at a given time and place. A range of approaches and  tools must be applied to solve the pervasive transportation congestion  problems that our nation faces in the next decade and beyond. Congestion  pricing—although only one of several approaches that can be used to  reduce congestion on our nation’s roads, airways, and waterways—shows  promise in reducing congestion and better ensuring that our existing  transportation systems are used efficiently.
Pilot projects and experiences with congestion pricing abroad  demonstrate the promise of this approach for reducing congestion and  promoting more efficient use of transportation systems by users. Despite  this promise, there continue to be concerns over fairness and equity in the  application and implementation of congestion pricing, which current  projects have not fully alleviated. Some proposed projects, such as FAIR  lanes, which use revenues generated to compensate other users of the  transportation system, could help alleviate some of the fairness and equity  concerns that have been raised. Experts suggest and some projects  demonstrate that public opposition to congestion pricing will lessen as  these projects show that equity and fairness concerns can be mitigated.  However, if congestion pricing is to be more widely applied to  transportation systems, the Congress will need to ease statutory  restrictions on the use of congestion-pricing applications on  transportation systems.
section_title: Contact and Acknowledgments
paragraphs: For further information on this statement, please contact JayEtta Hecker  at (202) 512-8984 or heckerj@gao.gov. Individuals making key  contributions to this report include Nancy Barry, Stephen Brown, Jay  Cherlow, Lynn Filla Clark, Terence Lam, Ryan Petitte, Stan Stenersen,  Andrew Von Ah, and Randall Williamson.
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