Using the revenues from congestion pricing : a Southern California case study
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Using the revenues from congestion pricing : a Southern California case study

Filetype[PDF-65.95 KB]


  • English
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    Details:

    • Creators:
      Small, Kenneth A.
    • Subject/TRT Terms:
    • Resource Type:
      Research Paper
    • Geographical Coverage:
      Southern California
    • Corporate Publisher:
      Reason Public Policy Institute
    • Abstract:
      Congestion pricing has many goals and benefits, but one thing is clear: its success depends on wise use of the revenues. The economic theory behind the concept relies on these revenues to help compensate for the payments required of highway users. Practical and ethical considerations similarly dictate that those who would otherwise be harmed by the fees receive tangible benefits from the revenues. This paper investigates the possibilities for designing a package of congestion prices and revenue uses that can attract wide support. The suggested approach returns two-thirds of the revenues to travelers through travel allowances and tax reductions, and uses the rest to improve transportation throughout the area, including affected business centers. By replacing regressive sales and fuel taxes, this approach offsets the tendency of the prices alone to have a regressive distributional impact. By lowering taxes, funding new highways, improving transit, and upgrading streets and pedestrian facilities in business centers, the package provides inducements for support from several key interest groups. The specific proposal is quantified for a scenario, previously developed by the Environmental Defense Fund and the Regional Institute of Southern California, in which congestion pricing is applied throughout the Los Angeles region. The net benefits are especially large to high-income auto drivers, carpoolers, and users of public transit regardless of income. When the value of newly funded transportation facilities and services is added in, even low-income "captive" drivers are likely to be better off.
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