HighLight Heading
July 2008
Special Research Conference Issue: Plenary Sessions
UPA to prove merits of road pricing for national policy
David Horner
U.S. surface transportation policies are an "alarming failure" because of a mistaken overall approach to funding, operations, and delivery, said David Horner, deputy assistant secretary of transportation policy with the U.S. Department of Transportation (USDOT). He discussed one aspect of the department's work to reform these policies: the Urban Partnership Agreement (UPA) and its successor, the Congestion Reduction Demonstration (CRD) Program. Minneapolis is one of the cities selected in the UPA (see related article for details).
Horner said the policy failure is not just due to lack of funds or poor execution. Federal funding for surface transportation doubled in the past 25 years while congestion in metro areas rose 160 percent. Transportation spending is exceeding Highway Trust Fund (HTF) revenue, and the fund is on track to go into deficit in 2009. "The bottom line," he said, "is that we cannot persist with the situation as it exists."
The sustainability of the gas tax that funds the HTF is another concern. There is bipartisan consensus to reduce gas consumption, yet the country depends on the gas tax to fund the majority of surface transportation programs. Relying on fossil fuels and an excise tax "is contrary to national energy, environmental, and security objectives," Horner said.
Horner also criticized the increased use of earmarking. Pitting special interests versus the public interest, earmarks rob states of the flexibility to focus on state and national priorities. "It's a very wasteful practice, and we would like to see it end," he said.
In response to these issues, the USDOT launched road-pricing programs designed to reduce congestion and achieve national energy, environmental, and security objectives. "According to economists, [pricing is] the single most viable approach to reducing congestion," he said.
Announced in 2006, the UPA sought proposals from around the country for congestion reduction projects using the "four Ts": tolling, transit, telecommuting, and technology/operations. "Tolling is first among equals in the program," he said, "but transit is also an indispensable ingredient." Last year the USDOT allocated $848 million to 94 projects in four areas: Miami, San Francisco, Seattle, and Minneapolis (see related article for more about the University's role in the Minnesota projects).
"Transportation officials of these jurisdictions were ready to think outside the box and convince local leaders and elected officials to assume some political risk to advance a solution the USDOT was convinced would work," Horner said. The goal, he explained, is to move pricing from discussion to implementation and persuade skeptics it will work.
In the CRD program, the USDOT and its urban partners negotiated a series of conditions for use of the funds. The principal condition, Horner said, is that the local recipient enacts legislation authorizing congestion pricing by a certain date. The Minnesota Legislature passed the needed authority for the I-35W lane in May.
Legislative authority is no small hurdle. New York City was initially slated to receive $354 million under the UPA, Horner said, pending legal authority for a congestion pricing cordon in Manhattan. The state legislature decided against taking any action, however, and forfeited the funds. The USDOT quickly reallocated the money to Chicago and Los Angeles, which it had vetted in case of such a problem.
Through these projects, the USDOT wants to demonstrate the power of road pricing and complementary transit for future policy. "Congestion is not an unavoidable fact of modern life but a problem that can be reduced and eliminated by good policy decisions," he concluded.
For more about the UPA and CRD, see www.upa.dot.gov.