Tollways and Other Alternatives to Congestion

By Pamela Bailey Campbell and Katharine Nees

Many states, especially Texas, are ready to take on alternate to reduce highway congestion. To get over the start-up hurdle of planning, design, permitting, right-of-way and construction, communities are turning to public-private ventures and alternative financing mechanisms.

According to the Texas Transportation Institute, traffic congestion cost every American traveler $1,160-almost $68 billion in lost productivity and wasted fuel in 2003.

By 2009, the economic cost of congestion is slated to rise above $90 billion. By 2020, the average motorist will spend almost 36 hours per year in gridlocked traffic, according to the United States Department of Transportation.

Transportation initiatives have simply not kept pace with demand. Today 29 states collect toll revenue in some form, and these funds are considered the most straightforward form of transportation user fees.

These tollway projects are being delivered by a variety of agencies. In Texas for example, toll roads can be built and operated by four types of organizations: the Texas Department of Transportation through its Texas Turnpike Authority, regional toll authorities such as the North Texas Tollway Authority, regional mobility authorities such as the Central Texas Regional Mobility Authority and county toll authorities such as the Harris County Toll Road Authority.

Due to funding constraints, many states are turning to tollroads to deliver projects decades faster than if they relied on traditional funding sources. An example is the George Bush Turnpike in Dallas. Slated for development since the 1950s, the project faced severe funding shortfalls with conventional gas-tax funding. However, with the help of creative financing and the use of toll-generated revenues, the project was able to happen at least 20 years earlier than originally proposed. Today, 25 miles of the original 30-mile planned President George Bush Turnpike is open to traffic with the last five-mile segment under construction.

Value Pricing

While many long-standing toll facilities are turnpike systems running between cities, today the most pressing needs for increased transportation capacity are in existing urban corridors.

To meet this need, the concept of "value pricing" models for congestion management is putting a new spin on tollways. In these approaches, additional capacity is added to existing highways, and the tolling approaches vary based on the specific needs of that region. These variations include:

• Express lanes: All vehicles in the added lanes pay tolls. The toll is kept high enough that travel times are reduced on the new lanes.
• HOT (high-occupancy toll) lanes: High-occupancy vehicles pay no toll, or reduced tolls to travel in the added lanes, while single-occupancy vehicles pay tolls based on the level of congestion on adjacent facilities.
• Dynamic Pricing: Assessed tolls are adjusted "real-time" based on the congestion on lanes at any given time. The volumes may be checked as often as every six to eight minutes. Tolls are highest during peak travel periods and lowest during off-peak periods. This can be used in combination with either Express Lanes or HOT lanes.

These approaches give drivers a variety of transportation options. With HOT lanes, carpoolers can save a significant amount of travel time. So can single-occupancy drivers, if they choose to pay for the privilege.

HOT lanes are fast becoming one of the hottest trends in urban areas. The Harris County Toll Road Authority is adding two HOT lanes in each direction to a 20-mi. stretch of Interstate 10.

Tolls can provide funds for transportation projects, but the money only starts rolling in after the project is constructed. To get to that point, many new funding mechanisms are designed to support private investment by making bonds more attractive, providing support for the required up-front investment and encouraging private-sector involvement.

One role of public-private partnerships is in project delivery methods. The State Highway 130 project of the Central Texas Turnpike, for example, which is designed to alleviate congestion in the Austin area, is being delivered under an experimental public-private comprehensive development program in which the state contracted with one entity to oversee everything from construction and design to operations and maintenance. As a tollway project, the turnpike is financed from a variety of sources: tolls, state highway funds, community contributions and a federal loan.