State and local lawmakers continue to deal with increased traffic congestion across the United States. In Chicago, a trip that would typically take 30 minutes in free-flowing traffic can now take more than 60 minutes during peak driving times. Drivers in Los Angeles spent an average of 81 hours in traffic in 2015, ranking as the worst cumulative delay of any U.S. metropolitan area, according to a study released by the data company Inrix. To battle the growing traffic problem, states are considering a policy known as “congestion pricing” – also called “value pricing” or “variable tolling.”
According to the Federal Highway Administration’s website, “Congestion pricing is a way of harnessing the power of the market to reduce the waste associated with traffic congestion. Congestion pricing works by shifting purely discretionary rush hour highway travel to other transportation modes or to off-peak periods, taking advantage of the fact that the majority of rush hour drivers on a typical urban highway are not commuters.”
In a recent Mercatus Center study, George Mason University economist Robert Krol examines the problem of highway congestion and how congestion pricing strategies have been successful in the past and why they would be beneficial in the future. In the study, Krol argues, “There is mixed evidence about whether congestion pricing is regressive, but governments implementing congestion pricing could use several policy solutions to help reduce inequity. These include reducing other regressive taxes such as the gasoline tax and giving commuters the option to choose between toll lanes and toll-free lanes.”
Eric A. Morris, a researcher at UCLA’s Institute of Transportation Studies, argued in a recent Freakanomics blog post one way to end the problem of traffic congestion is to impose tolls that vary with congestion levels on roadways. “Unfortunately, it can be hard to convey this because the theory behind tolling is somewhat complex and counterintuitive. This is too bad, because variable tolling is an excellent public policy. Here’s why: the basic economic theory is that when you give out something valuable — in this case, road space — for less than its true value, shortages result.”
Robert Poole, director of transportation policy at the Reason Foundation and Reason’s Searle Freedom Trust transportation fellow, discussed best practices in congestion pricing in a Policy Study published in 2012, stating, “Research suggests that social welfare would be maximized not with a single price for all freeway users but with several choices of price and service level for various categories of user. One way to implement such a system, with separately priced lanes for premium service motorists, regular motorists and heavy trucks.”
Poole’s study sketched out a possible evolutionary approach to implementing such a system, in which each step can be justified on its own merits and each creates preconditions for moving on to the next step at a later time.
Krol says tolls offer a broad-based benefit for society, are no more regressive motor-fuel taxes, and he says technological advances can reduce costs and protect privacy. “Congestion pricing schemes have been unpopular, but as people become more familiar with the idea and see its benefits, public support may grow. Since congestion pricing becomes more acceptable after it is implemented, one policy option is to impose a temporary toll that could be made permanent later.”
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Budget & Tax
Research & Commentary: States Should Reform How They Budget
Sixteen states are facing expected budget shortfalls in the 2016 and 2017 fiscal years. One of the primary causes of budget imbalance is the use of baseline budgeting. Simply put, a baseline government budget carries over existing spending levels from year to year; the previous year’s spending is treated as the floor on which to build additional spending changes.
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines several alternatives to baseline budgeting states should consider to control spending: “Although neither approach is a silver bullet for ending a budget deficit, zero-based and performance-based budgeting can be effective in helping governments prioritize services and identify inefficiencies and waste.” Read more
D.C. Public Charter Schools Now Educate Nearly Half of City’s Students
Elizabeth BeShears writes about a new report issued by the DC Fiscal Policy Institute that shows nearly half of all students in the District of Columbia are now attending a charter school. The percentage of DC students in charters has gone from 25 percent in the 2005–06 school year to 46 percent in 2015–16. BeShears says advocates in DC note their schools serve a greater proportion of low-income and minority students and do so while producing higher proficiency, graduation, and college acceptance rates. They credit the success of charter schools in DC to the District’s strong, straightforward, and clear charter school laws. Read more
Energy & Environment
Kids Guide to Climate Change
The Kids Guide to Climate Change is a recently released e-book educating children ages 8 to 14 on climate change. Part of the Mother Owl series, which includes books on carbon and “the facts of life,” the Kids Guide to Climate Change examines the facts about climate that are currently known and makes no theoretical predictions about the future. To make the book age appropriate, each section opens with a poem and then gives more detailed information about each of the examined concepts. It is intended for parents to read with their children. The book’s key message is this simple fact: Climate changes from place to place and over periods of time. Purchase here
Policy Diagnosis: Federal ‘Meaningful Use’ Regulations Killed Health Record Innovation
In this interview, Michael Hamilton, managing editor of Health Care News, speaks with Dr. Mike Koriwchak, vice president of Docs4PatientCare Foundation and cohost of The Doctor’s Lounge podcast, about “meaningful use.” Meaningful use is a certified electronic health records technology that has, they argue, killed electronic records innovation. The interview outlines how lawmakers and the Centers for Medicare and Medicaid Services can help revive it. Read more
From Our Free-Market Friends
A Guide to Nevada Energy Policy
The Nevada Energy Policy recently published a guide designed to give policymakers important information necessary to cultivate sustainable economic growth through wise energy policy. The guide also recognizes important environmental concerns tied to Nevada energy policy: “Rather than accepting at face value the environmental claims of industry groups competing for energy-market share, this Guide offers a full-spectrum assessment of environmental impacts associated with competing power sources. These real-world environmental impacts — rather than the self-serving claims of various energy industry sectors — should guide policymakers in accounting for environmental impacts of competing power sources.” Read more