July/August 1994, p.5

"Auto-Fee" NYC: A Roadway Pricing Primer
By Charles Komanoff

The Tri-State Transportation Campaign is pressing NYC-area agencies to develop road pricing in key highway corridors. Here Transportation Alternatives board member Charles Komanoff describes how such policies could improve travel and economic conditions in NYC.

Picture this: every car and truck driven in New York is equipped with a pollution monitor that continuously measures and records its exhaust. Each month, drivers are billed for their vehicle's pollution - so many dollars per pound of carbon monoxide and other emissions, rated according to the estimated damage caused by each pollutant.

Picture some more: every street and highway in the five boroughs has sensors to detect each passing vehicle's identification code. Cars and trucks are billed for miles driven; heavy vehicles pay more, because they stress the road surface, make more noise and are more dangerous to other travelers. Likewise, miles driven in peak hours are charged more because they contribute to congestion and delays. To top it off, drivers who speed get charged extra.

What's wrong with this picture? For one thing, the technology to measure exhaust or monitor vehicle movement isn't here yet (though it may be closer than you think). For another, some people see Big Brother in the idea that their car's travel would be tracked and charged for. And the motoring public does not yet regard the road system as a transportation service it must pay extensive user fees for.

But there's a lot right with this picture. A city or region with such a system would reap powerful advantages. Among them cleaner air, less traffic, and easier travel, because motorists would respond to pollution and mileage fees by making fewer car trips. The revenues from these fees would give transit and road agencies funds to create a first-class transportation system. Moneys left over could replace sales taxes that hold back our economy and hurt the poor.

That, in a nutshell, is roadway pricing: charge directly for the harms caused by driving. Do vehicular emissions sicken and kill people? - make drivers compensate society (and encourage them to pollute less) by paying a smog fee proportional to the harm their emissions cause. Does rush-hour driving cause more delays than driving off-peak (or not driving at all)? - congestion pricing charges a premium for it, just as airlines have done for generations. Do heavy vehicles endanger other road users, spread noise and pulverize our roads? - impose per-mile charges geared to vehicle weight and speed (weight-distance tax).

Roadway pricing would profoundly change how we regulate and charge traffic. New York City's current patchwork of gas taxes and bridge and tunnel tolls doesn't even pay for road building and upkeep, let alone driving's environmental and social costs.

Will roadway pricing change motorist behavior?
People obey their pocketbooks. Faced with prices proportional to the harms from driving, motorists will reduce those harms to save money.

Smog fees will encourage drivers to drive less, purchase newer (cleaner) vehicles, keep vehicles tuned and buy electric. Congestion pricing will lead motorists to take transit, bike, walk, telecommute, car pool and make trips and deliveries off-peak. Weight-distance charges will push motorists and businesses toward lighter vehicles and less-frequent use.

Michael Cameron of the Environmental Defense Fund estimates that a 5/mile surcharge on driving in Southern California would eliminate about 10% of the region's vehicle-miles traveled and vehicular smog, and 30% of congestion, Imagine the effect here from full-scale roadway pricing.

How much would motorists pay, and what should be done with the revenues?
Comprehensive roadway pricing in NYC could collect as much as $12 billion a year, at the end of a 20-year phase-in. Averaged over the 18 billion miles driven annually in the five boroughs, that equates to around 65 a mile, including a smog fee averaging 17/mile based on today's cars and trucks. Diesel trucks would pay much more, but new cars with well-maintained emission control systems that capture most pollutants might only pay a few cents a mile, say $200 a year for average use.

With several billion dollars in additional revenue a year, the Transit Authority could eliminate 2-fare zones and finance monthly discount passes, cover shortfalls in its rebuilding plan, and expand subways and light rail to provide more travel alternatives for motorists. A hundred million a year in maintenance on city bridges would end costly catch-up work. As the phase-in grew, the surplus would be rebated as billions in lower taxes.

Would roadway pricing create new inequities?
Unlikely. In NYC, the poor family stuck with a high-pollution clunker is the exception, not the rule. U.S. government survey data indicate that affluent NYC households-with incomes over $40,000 a year - drive five times as much as moderate and low-income households. Even after discounting vacations and other non-city driving, a huge differential remains. Thus, most roadway pricing revenues will be collected from those who can best afford to pay.

How soon could roadway pricing be implemented?
"Smog chips" won't be available for 5-10 years, and won't penetrate the full vehicle fleet for 15-20 years. In the interim, the city could estimate emissions with "blue book" pollution ratings for specific car models. Or, motorists could substitute smog fee payments based on emissions measured at pollution test centers, giving them a strong incentive to keep emission controls in good working order.

As for the road sensors, the city's bridges, tunnels, highways and arterials could be wired in several years at a cost under $100 million (figuring 600 locations @ $100,000 each, plus a dollar or two per car). This system would require intensive traffic-calming of local streets to discourage motorists from bypassing the primary roads. Out-of-towners without a vehicle identification chip would pay a flat daily rate. A more immediate alternative would impose a per-mile fee in conjunction with electronic tolling of all bridges and tunnels into Manhattan as a form of congestion pricing.

Can New York go it alone?
Roadway pricing can be enacted and administered locally. Pollution, congestion, road subsidies and the antisocial effects of heavy vehicles are essentially local problems, and smog fees, congestion pricing and weight-distance charges are an appropriately local solution. Though driving here will cost more, the benefits will be more than worth it: transportation that works, huge tax savings, a more livable city.

What are the next steps for roadway pricing?
A good start would be for transportation agencies to stop moaning about public resistance, and to start quantifying and publicizing the benefits of roadway pricing. City and state transport officials need to lift their eyes from the minutiae of regulatory programs that at best will only keep us running in place. If they do, they might find that charging the full cost of driving is the fastest and fairest way to limit damage from cars and trucks and to break the choke-hold of auto-dependence.

Are you interested in a richer treatment of this subject? Send $6 to KEA, 636 Broadway, NYC 10012, for Charles Komanoff's 35-page report, "Pollution Taxes for Roadway Transportation.''

NYC Roadway User Fees (Proposed) 
based on current 18 billion miles driven/year

Fee Type Average  Rationale

Smog Fee 17/mile $3.0 billion in human illness
Weight-Distance Tax 9/mile Offset land cost of roads ($1.8 billion, based on tax value of NYC streets), some noise costs ($1.0 billion), some accident costs ($0.5 billion), tax subsidy to NYC motorists ($0.1 billion)
Congestion Fee 15/mile  Offset some congestion costs ($2.2 billion) and some accident costs ($0.5 billion)
Fees & Fines 12/mile Offset some accident costs ($1.5 billion), some land cost for illegal parking ($0.2 billion), some noise costs ($0.5 billion)
Gasoline Tax 3/mile (60/gallon) Offset NYC motorists' responsibility for military budget, and global warming from gasoline combustion ($0.6 billion); institute only in concert with rest of U.S.
Total  66/mile

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