SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 3747 words

COMMITTEE: HOUSE TRANSPORTATION AND INFRASTRUCTURE

SUBCOMMITTEE: HIGHWAYS AND TRANSIT

HEADLINE: TESTIMONY SOLUTIONS TO HIGHWAY CONGESTION

TESTIMONY-BY: MICHAEL REPLOGLE , TRASPORTATION DIRECTOR,

AFFILIATION: ENVIRONMENTAL DEFENSE

BODY:
May 23, 2001 Transportation Pricing Strategies That Work Testimony of Michael Replogle Transportation Director, Environmental Defense Highway and Transit Subcommittee, U.S. House of Representatives Good morning Mr. Chairman and members of the subcommittee. I have been invited this morning to discuss transportation pricing, speaking on behalf of Environmental Defense, an organization with 300,000 members that seeks to integrate law, science, and economics to find practical solutions to environmental problems. Fair Transportation Pricing Reduces Costs, Boosts Efficiency How we price and manage transportation sends powerful signals to consumers, affecting our travel choices and shaping the equity of access to opportunities. It affects how quickly and effectively we can obtain healthful air and water quality and safe neighborhoods. For much of the last century, government funding for transportation and tax policy favored expanded infrastructure for private motor vehicles but worked against other means of travel and prices failed to reflect the large indirect costs of transportation. This helped create great freeways and mobility, but also led to sprawl and reduced access to opportunities for those without cars. Hidden subsidies for driving and expanded roads induced substantial traffic growth and drove up the cost of achieving healthful air quality. Protect Transportation Conformity In 1990 Congress strengthened the Clean Air Act with transportation conformity to ensure better accounting for such induced traffic effects in transportation and air quality plans. Congress should protect the conformity process, which is working well in most regions. In areas where transportation plans have exceeded the state's adopted emission limits, like Atlanta, funds have been redirected to transit, traffic safety, and intelligent transportation system projects that help solve air quality problems while interagency conflicts are being resolved. Transportation pricing strategies are playing a growing role in helping some regions, such as Atlanta, Baltimore, New York, and Los Angeles, manage traffic and pollution growth as new air quality standards come into effect. While clean technologies have cut motor vehicle pollution per mile, these gains have been offset by more miles driven. Cars and trucks still account for a major share of smog, particulates, air toxics, and airborne nitrogen pollution to waterways. Climate change related emissions from motor vehicles, already 30 percent of America's total emissions, are growing steadily. Pricing strategies can help us reduce these emissions. Raise CAFI@ and Defend Federal Gasoline Tax and Other Motorist User Fees U.S. consumers are used to very low gasoline prices compared to other countries, where fuel taxes typically lead to more than double the prices typical in America. This has given consumers little reason to consider fuel economy in vehicle purchase. A freeze in Corporate Average Fuel Efficiency standards in recent years and growing demand for light trucks and SUVs have caused average motor vehicle fuel economy to decline. This makes us vulnerable gas price Jumps triggered by short-term refinery and distribution problems. Higher CAFE standards applied to all motor vehicles would help consumers save money in the long run and reduce the pinch of gas prices. Congress should resist calls to sacrifice long-term public health protections by temporarily lowering gas taxes or relaxing environmental standards in the short-term. The federal motor fuel tax funds are used in part to address pressing air quality problems that threaten public health. Gas taxes, tolls, and other road user fees don't even cover the full direct costs of building and maintaining Arnica s highways, let alone the large indirect costs of pollution. ISTEA Reforms Began to Level the Playing Field between Transportation Choices The 1991 ISTEA law, which was reauthorized in 1998 with few in' 'or changes as TEA- 21, gave individuals, states, and companies greater flexibility to invest in or use what ever means of transportation best suits their needs. ISTEA and TEA-21 began to better align transportation price signals with national and local goals for expanded and more equal access to opportunities, healthful air quality, and efficient mobility. These laws created new incentive-based pilot projects, like the Value Pricing Program. But more needs to be done. Many states have focused increased funds to expand the public's travel choices, but others have not. But ISTEA and TEA-21 have been part of a resurgence of public transportation. Transit ridership has grown faster than the number of miles driven by motorists for the past three years, reaching its highest level in 40 years. In many cities, transit agencies are straining to keep up with ridership growth as many urban areas regain residents and vitality. Last year, for the first time in the U.S. since the 1970s, the number of miles driven per person declined. Tax Reforms Help Employers Expand Commuter Choice Federal and state tax policies are a part of this story of transit resurgence. For the vast majority of working Americans, a free parking space at work has for decades been the sole commuter benefit offered by employers because that was until recently the only tax- free commute benefit worth speaking of. So if you drive alone to work you gain the benefit. If you take transit, carpool, walk, or bike, you lose the benefit and likely pay your own daily transit fare. With this kind of no surprise that on any given day nine out of ten American commuters drive to work and nine out of ten of the cars driven to work have one occupant. Yet the 85 million "free" or subsidized employer parking spaces actually cost American business more than $36 billion per year. By spurring more driving, these subsidies exacerbate traffic congestion and air pollution. A congressional study found that "free" parking of all kinds costs our society over $250 billion per year. In 1998, Congress took steps to make tax policies more equal for all commuters, allowing employers to offer tax-free transit and vanpool benefits of tip to $65 a month now, and up to $100 a month starting in 2001, with taxable cash-in-lieu-of-parking benefits allowable for the first time. Tax-free benefit limits for employer-provided parking were set at $175 per month - a practice which still leaves solo drivers at an advantage. Allowing employee-paid pre-tax transit benefits saves transit- using employees over $400 a year while saving employers a smaller amount on withholding. Having employers pay for transit is a bigger incentive for employees. Offering such a benefit to federal executive agency employees in the national capital region induced 11 percent of employees who used to drive to work to switch to transit, taking 12,500 cars off the region's crowded roads every workday. At firms in California and Minnesota offering a $2 a day incentive instead of free parking, one out of eight who used to drive are finding another way to get to work. Such benefits help employers attract and retain employees and provide the greatest help to low and moderate wage workers who spend the largest share of their incomes commuting and often ride transit, carpool, bike, or walk to work. Congress should take further steps to encourage employer support for such 'Commuter Choice' initiatives. We urge your support for the following bills that would do this: -The Commuter Benefits Equity Act of 2001 (H.B.318) would provide equal tax- treatment for parking and transit benefits. -The Bike Commuter Act (H.R. 1265) would allow employees who bike to work the same financial incentives as transit users. -The Mass Transit Tax Credit Act of 2001 (H.R. 906) would provide a 25 percent tax credit to employers for the cost of providing transit benefits to their employees. This is modeled after measures adopted by several states - including Maryland, Minnesota, Oregon, Washington, Georgia, New Jersey - that have begun offering tax credits of up to 50 percent for employer-paid non-driving commuter benefits. DOT and EPA are promoting Commuter Choice, but could further expand efforts to foster widespread adoption of these voluntary employer and employee incentives. EPA estimates a 5-10 percent employee participation rate in such programs would generate a reduction in commute vehicle miles of 1.6 to 3.2 percent, leading to less congestion and reductions of 27,000-54,000 short tons of hydrocarbons, 16,800-33,600 short tons of nitrogen oxides, and 1,180,000- 2,360,000 metric tons of carbon dioxide. Opening the Door to Efficient Traffic Management with Automated Road Pricing Another promising option for unclogging roads, especially in more congested metropolitan areas, is automated time-of-day tolls and High Occupancy Toll (HOT) lanes, which allow solo drivers to pay to use High Occupancy Vehicle (HOV) lanes, while giving a free ride to buses, vans, and sometimes carpools. These can put to work unused capacity in HOV lanes and help pay for expanded transportation choices. A network of HOT lanes on existing highways is likely to provide more effective congestion relief than building new roads. New outer beltway toll roads are likely to bring more sprawl and put more out of reach for those without cars, hurting the poor and the environment. Why not instead give time-stressed travelers a way to buy relief from growing congestion delays in existing freeway corridors? HOT lanes in existing road corridors can expand both travel choices and equity. HOT lane critics unfairly bash them as "Lexus Lanes," serving only the rich. Real-world HOT lanes look more like "Lumina Lanes," used by people of widely varying incomes who occasionally need to bypass traffic delays that disrupt their social, family, or work life. A working class mom who is facing a S1 a minute penalty for picking her kids up late at day care is happy to pay 84 to save 20 minutes by using the HOT lane on those several days a month when she needs it. The typical users in California spend less than $20 a month on HOT lane tolls, using them on days they are in a real rush. If HOT lane revenues fund new transit, as on San Diego's 1-15 HOT lane, everyone wins. Lower income transit users and carpoolers get access to otherwise inaccessible suburban Drivers benefit from reduced road congestion and better services and choices. If HOT lane revenues help pay for the road, those who drive most are paving more of their fair share, helping all taxpayers win. The reality is that road user fees don't nearly cover the full cost of building and operating America's roads, which remain subsidized by broader taxes. And with new accounting rules forcing further disclosure of deferred maintenance, transportation providers need new sources of revenue to maintain systems, expand choices, and cope with growing travel demand. New non-stop electronic toll technology means motorists don't need to slow down to pay tolls. And HOT lane fees -- higher in rush hour and discounted at other times -- keep traffic flowing without wasting scarce road capacity like HOV lanes do. This makes it possible to contemplate future conversion of some existing general-purpose lanes to HOT lanes, particularly where new capacity is being added to existing roads. HOT lane experience indicates this strategy can garner popular support. On California's Route 91, diversion of traffic onto HOT lanes has reduced congestion on the entire road and increased the number of passengers per car to 1.6, compared to the average of 1.2. Similar incentives have been implemented or are being considered in Maryland, Texas, Florida, Colorado, Georgia, New Jersey, New York, and other states. The Port Authority of NY-NJ in March 2001 introduced time-of-day tolls on Hudson River bridges and tunnels and Staten Island bridges, giving discounts for electronic toll payers who avoid rush hours and charging a premium in the time of most concentrated demand, 'just like movie theaters and many other services. This helps reduce congestion by shifting the time of day of traffic. Toll revenues support better PATH transit and regional transportation infrastructure and services. The NJ Turnpike, NY Thruway Authority, and other tolling agencies have implemented time-of-day tolls to manage traffic. Congress should encourage states and transportation facility operators to replace obsolete toll booths that cause congestion and pollution with new barrier-free customer-friendly tolling systems using toll transponders and image processing and billing systems. Congress should encourage state motor vehicle agencies to issue toll transponders with motor vehicle registrations to encourage their widespread availability in states where tolls are used. Congress should eliminate restrictions on tolling highways that were constructed with federal aid, which can now only be tolled under limited pilot projects authorized by TEA-21. Automated time-of-day tolls are a very promising tool for transportation facility management and financing. Use-Based Car Insurance Use based car insurance is another promising area for innovation. In August of 1998, Progressive Auto Insurance inaugurated a project in Texas which charges drivers for insurance according to the amount of driving they do over a period of time. Rather than fixing auto insurance at one price, consumers have the opportunity to save money when they drive less. Cutting driving miles will also cut auto pollution. This new approach could save many drivers hundreds of dollars a year on car insurance while reducing pollution. Progressive's voluntary pilot program in Texas bases a large share of auto insurance rates upon when, where, and how much people drive, with less emphasis on more traditional factors such as neighborhood of residence, gender, age, sex and marital status. Consumers are billed monthly for their auto insurance, based on Global Positioning monitoring, 'just as they are billed for telephone service. Drivers who reduce their auto use will pay less for insurance. Conclusion Throwing more money into road building won't solve congestion. New smart incentive strategies like HOT lanes and transit and parking incentives can help local and state agencies, business, and citizens cut their way through our traffic mess and boost transportation equity.

LOAD-DATE: May 29, 2001, Tuesday