Collaboration in Civic Spheres

Regional tolling fair to low-income households, UW researchers report

by Matt Rosenberg August 15th, 2011

SUMMARY: With plans unfolding for electronic tolling of highways in the Seattle region, the state of Washington commissioned a study of whether it is fair to low-income households. The report by a professor at the University of Washington’s Evans School of Public Affairs, recently published in final form in the Journal of Urban Affairs, finds that if 12 major highway segments in the Puget Sound region were tolled with a $1 one-way flat rate, and the impacts were assessed on all low-income households in the region combined, their average cost would be $235 per year or 1.5 percent of income. If the analysis is limited only to low-income households with commuters who would use tolled highway segments, their average costs rise to $1,000 per year and 6.4 percent of income. However, the report stresses the need to look at all low-income households in regional tolling equity analyses, and concludes tolling is significantly less regressive than sales or gas taxes to fund transportation projects. The study concludes social equity concerns are best addressed “via tax, income transfer and labor market policies, not by surpressing prices’ function of allocating scarce resources” and that “congestion tolling” aimed at solo drivers will cut traffic snarls better than a standalone emphasis on biking, walking or carpooling. Expanded transit has potential to cut congestion, according to the report, but is mainly funded by regressive taxes.

BACKGROUND:

  • Electronic tolling has already been implemented in Central Puget Sound on State Route 167 and the Tacoma Narrows Bridge. It is scheduled to begin later this year on the State Route 520 bridge to help finance its replacement, and is also being considered for I-405, I-5 and other major highways or highway sections in the region. Flat rate-tolls are used on the Tacoma Narrows Bridge, and variable rate tolls (aka “congestion tolling”) elsewhere. The Washington State Department of Transportation and legislative leaders have openly discussed tolling I-5 in and around Seattle, and state studies and an outside expert panel have recommended congestion tolling for the full length of the I-405/SR 167 Eastside Corridor.
  • At the same time, Initiative 1125 will be on the November 8 ballot and if approved by voters would – assuming no subsequent amendments to the law by legislators – impose strict limits of type and duration of tolling, and related revenue use.
  • Another element of the tolling debate in Central Puget Sound is social equity, about which WSDOT sought a closer look in a recently-published study by University of Washington researchers. in the study, low income household thresholds were 200 percent of the federal poverty line – which varies by family size and composition, such as $18,310 for a family of three and $22,050 for a family of four. The study also used data from the American Community Survey, the Puget Sound Regional Council’s Household Activities Survey, and utilized Geographic Information Systems methods for route-mapping.

KEY LINK: “A Geography-Specific Approach to Estimating the Distributional Impact of Highway Tolls: An Application to the Puget Sound Region of Washington State,” Journal of Urban Affairs, August 7, 2011. Author: Professor Robert D. Plotnick, Evans School of Public Affairs, University of Washington, Seattle.

KEY FINDINGS:

  • A modeled analysis of all low-income and non-low-income households in the Puget Sound region shows that if 12 major highway segments were each subject to (electronic) tolling, 69 percent of the former and 56 percent of the latter would pay no tolls whatsoever.
  • For the 31 percent of all low income households which would pay tolls, those charges would average $235 per year or 1.5 percent of income, versus $600 year and 0.8 percent of income for non-low-income households.
  • If the analysis were restricted to only households with commuters which drive tolled road segments, the costs would be higher, $1,000 per year and 6.4 percent of income for low-income households and $1,300 or 1.7 percent of income for non-low-income households.
  • Tolling is fair to low-income households. While the financial impact of tolling differs between economic groups, Plotnick and his research team write, “on balance we suggest the differences are appropriate. If tolls are to reduce congestion…they must give residents who drive the most heavily trafficked roads and bridges incentives to use them more efficiently, whatever their incomes may be….the broader social goals of poverty reduction and income redistribution are best pursued via tax, income transfer and labor market policies, not by surpressing prices’ function of allocating scarce resources.”
  • Using tolls to limit congestion and pay for new bridges and road sections is a strategy less problematic than “the typical alternatives – sales and gasoline taxes – which are clearly regressive and would impose significant burdens on low-income households…”
  • Incentives and public information campaigns to encourage more biking, walking, carpooling and use of existing carpool lanes could conceivably reduce road congestion and have less of a financial impact on low-income households than tolling; but ultimately these steps “are unlikely to significantly reduce congestion” because “they are not practical for many trips…” Expanded transit may hold more promise but is mainly financed with sales, gas and property taxes which are more regressive than tolling. “Ultimately, the most effective way to reduce congestion, in our view, is to directly increase the cost of sole-occupancy driving. Congestion tolls are the most suitable means to do so.”

RELATED – “WSDOT: Transportation Funding Needs To Be Fixed,” August 25, 2011, Public Data Ferret.


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2 Responses to “Regional tolling fair to low-income households, UW researchers report”

  1. JackFlint says:

    “Tolling is fair to low-income households.” This might be true, still not sold it bases on the paper.

    Tolling is horrendously regressive to low-income households with commuters. 6.4% of income for low-income commuters vs 1.7% of income for non-low income commuters. Craaaaazy!!!!!

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