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I’ll Tell You What I Think: A National Review of How the Public Perceives Pricing

I’ll Tell You What I Think: A National Review of How the Public Perceives Pricing David Ungemah , Associate Research Scientist Tina Collier , Associate Transportation Researcher 2007 Annual Conference – Transportation Research Board

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I’ll Tell You What I Think: A National Review of How the Public Perceives Pricing

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  1. I’ll Tell You What I Think:A National Review of How the Public Perceives Pricing David Ungemah, Associate Research Scientist Tina Collier, Associate Transportation Researcher 2007 Annual Conference – Transportation Research Board

  2. Experience is a hard teacher because she gives the test first, the lessons afterwards. - Vernon Sanders

  3. This is a fine mess you’ve gotten me into! Annual delay per traveler by size of urban area Source: 2005 Urban Mobility Study, TTI.

  4. Erosion in Value of Fuel Tax by Inflation Average state motor fuels tax Federal motor fuels tax Source: GAO Report (2006)

  5. VMT Rising Much Faster than Population and Highway Growth Source: Texas Transportation Challenge, TXDOT (2006)

  6. Highway Revenue Needs: TxDOT Urban Areas Source: Texas Transportation Challenge, TXDOT (2006)

  7. Pricing: Bridging the Gap FINANCE DEMAND MGMT GROWTH MOBILITY SYSTEM SUSTAINABILITY

  8. Types of Pricing New Capacity • Managed Lanes • Mileage (VMT) Fee • Variable (area) Fee

  9. This Presentation • Although there’s a need for pricing… • Manage demand • Reduce congestion at its source • Raise revenue for highway & transit capacity • Leverage consumer economics • … Has the public been convinced of the need for pricing?

  10. Managed Lanes: 12 states, 40+ projects I-394 NJ Turnpike I-15 SR-91 I-25 I-15 I-10 & US 290 Implemented Tampa Bay Expy Pending/Studied Interested

  11. Use-Based Fees: Who’s Studied? Seattle Minneapolis Manhattan Portland Boulder Bay Area Los Angeles Atlanta

  12. Use-Based Fees: Who’s Experimented? Seattle-Area (Variable Fee) Oregon (Mileage Fee) (Pay As You Drive Insurance)

  13. Pricing: Acceptability Depends upon Type

  14. Public has HIGH Expectations • Maintain a superior public roadway system • Adequate maintenance • Address congestion • Expand capacity • Preserve the environment • Keep us economically competitive • Gas tax revenues should cover costs Source: TTI / TxDOT Public Opinion Research, 2004.

  15. Public Has Concerns About Pricing • Persistent controversial issues • Equity for low-income individuals • Geographic distribution of benefits and burdens • Privacy of electronic toll collection • Double-taxation implications of a public highway system • Tolls are an easy target for criticism • Why pay more if someone else tells you that you don’t have to pay more?

  16. The Political Gotcha! Nature of U.S. government: The closer any agency is to implementing a new policy… … the greater the agency is at risk of “last minute withdrawals” of political support Pricing projects are an easy target for criticism Exacerbates the “last minute withdrawal” problem Easy to make headlines criticizing projects Difficult to make headlines outlining benefits

  17. Hits and Misses • Every state has hits and misses in terms of gaining acceptance for tolling and pricing • Minnesota public and politics… • rejected tolls on SH-212 and I-494 • accepted HOT lanes on I-394 • Texas public and politics… • accept managed and toll facilities in Dallas / Houston • strongly oppose tolling and pricing in San Antonio

  18. Selected Experience: 91 Express Lanes • SR-91 Express Toll Lanes • Planned as HOV lanes; built as toll lanes • Public Opinion • Initially lukewarm (45% approval) • After implementation, 60% approval • Over 65% believe tolls are an “effective means to address congestion”

  19. Selected Experience: I-15 HOT Lanes • I-15 HOT Lanes • Built as HOV lanes; adapted to HOT lanes • Public Opinion • 89% view as success • 77% approve of concept of tolling • 66% approve of HOT lanes on I-15 • Consider the program fair … • 71% general purpose lanes users • 75% HOT lane users

  20. Selected Experience: Texas • Toll systems • HOT Lanes on I-10 and US 290 in Houston • Traditional toll facilities in Dallas / Houston • Express Toll Lanes under… • … construction in Dallas / Houston • … consideration in Austin, San Antonio, and El Paso • Public Opinion • 71% oppose pricing existing roads • Now outlawed by state statute • 52% oppose pricing new roads • 82% improve existing before building new • 75% tolls should terminate after construction

  21. Lessons Learned: Barriers to Acceptance • Ideological opposition • NOT a partisan issue • “Free” is better than “not free” • Ensure “free” options are competitive options • Obscure funding processes • Planned = promised • Public / private partnership not well understood • Perceived unfairness • Perception of unfair is enough to undo projects • Variable pricing = consumer gouging

  22. Lessons Learned: Selling Points • HOT lanes – the current compromise • Ways to use and benefit without paying more • Demonstrable experience with pricing • Easier to accept • Multiple facets of “free” alternatives • Advancing construction of new facilities • “User pay” system still has resonance • Connect users with who pays for the new roads

  23. Lessons Learned: Identifying Potential Advocates and Opponents • Business Groups • Environmental Groups • Grassroots / Ideological Organizations • Government Leaders • Transportation Professionals

  24. Lessons Learned: Public Education • Simple question: Why are you doing this? • Distinguish concisely & simply the concepts • General messages with resonance: • Efficiency • Reliability • Simplicity • Project advancement • Think like a consumer • Educate like a business

  25. Lessons Learned: The Right Forum • Multiple forums for public debate • Purpose & need: Relief of congestion vs. finance tool • Alternatives assessment: Congestion pricing to reduce new capacity needs • Environmental documentation: Augment financing • Beware reality • Toll proponents for congestion pricing may become opponents of tolling as a means to finance new capacity • Careful and deliberate process of planning, documenting, and educating

  26. Conclusions • Projects that are politically acceptable: • Fairly simple in design • Build incrementally on experience • Address clearly understood and widely supported objectives • Involve transparent financial flows that facilitate public trust Source: Road Pricing for Congestion Management, 1994

  27. RESOURCES • TRB Congestion Pricing Committee: • http://www.trb-pricing.org/ • Value Pricing Homepage • http://www.valuepricing.org/ • TTI Managed Lanes Library • http://managed-lanes.tamu.edu/ Author’s email: D-Ungemah@tamu.edu

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