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Pricing Managed Lanes
Today, 95 percent of transportation funds in our region are spent just to maintain and operate roads and transit, leaving only five percent to actually improve, modernize, or expand the system. GO TO 2040 recommends exploring innovative financing options, such as congestion pricing, to fund our transportation system so that significant dollars can be freed up to help modernize the system and bring it to a state of good repair. Supply-and-demand economic principles can be used to reduce congestion by providing an incentive for some drivers to alter their travel behavior. The plan recommends near-term implementation of congestion pricing on various parts of the transportation network to enhance mobility and also to help fund needed improvements. Managed lanes on I-55 and I-90 are included in GO TO 2040's list of fiscally constrained projects. Congestion fees would be established to manage demand, but determining what to charge is one of the challenges of implementation.
A recent study on managed lanes from Houston's Katy Freeway, "Variation in the Value of Travel Time Savings and Its Impact on Managed Lanes," suggests that congestion pricing revenue could be even greater than previously projected because individuals are likely to have a higher estimate of value of travel time savings (VTTS) for urgent trips. This means that many individuals may be willing to pay more to use managed lanes due to the value they believe they gain from time saved. For example, the study found that VTTS ranged from $27.90/hour to $47.50/hour if an individual was running late for an appointment or meeting. As analyzed by an article from the Reason Foundation, those values are "3.8 to 5.5 times greater than the implied average VTTS for an ordinary [non-urgent] situation," thus, managed lane traffic and revenue studies "should also look into maximizing the economic value of the project" rather than just maximizing throughput or revenue. The Katy Freeway study is all the more significant given that most prior studies of congestion pricing relied on 15-year old data, while managed lanes on the Houston freeway are only a few years old.
It is vitally important for the region to have existing travel models that accurately reflect the estimated impacts of implementing congestion pricing. The potential of greater revenue increases the expected benefits of these lanes. Congestion pricing may not only help users travel more quickly and ease congestion, but it could also increase worker productivity and create new funding for additional operating and capital needs on roads and transit.
CMAP is being proactive to improve its advanced travel models in order to convey the same type of information seen in the Katy Expressway study. On February 11, 2011, CMAP hosted a joint peer exchange on Advanced Modeling for Regional Planning in northeastern Illinois. This event coincided with the conclusion of model design for two new analysis tools at CMAP. The first tool was a meso-scale Freight System demand model that will provide commodity-based estimates of commercial goods movements within the Chicago region. The second tool was an activity-based highway traffic demand model that responds to pricing and toll strategies currently outlined in our regional plan. These two models are included in CMAP's Strategic Plan for Advanced Model Development and were selected because they surfaced as policy priorities in the development of GO TO 2040. Mark Burris, who co-authored the Katy Freeway study, was a peer reviewer for CMAP's pricing model.