A Proposal: Selling The Idea Of Congestion Pricing To Cities

The political feasibility of using prices to mitigate congestion depends on who receives the toll revenue. Authors David King, Michael Manville, and Donald Shoup of UCLA's Department of Urban Planning, argue in an academic journal article that congestion pricing on freeways will have the greatest chance of political success if the revenue is distributed to cities, and particularly to cities through which the freeways pass. In contrast to a number of previous proposals, we argue that cities are stronger claimants for the revenue than either individual drivers or regional authorities. We draw on theory from behavioral economics and political science to explain our proposal, and illustrate it with data from several metropolitan areas. In Los Angeles, where potential congestion toll revenues are estimated to be almost $5 billion a year, distributing toll revenues to cities with freeways could be politically effective and highly progressive.

From the conclusion of the journal article:

"The overriding factor in our argument, however, is not abstract fairness but political calculation. Arguments can be made, on fairness grounds, for any number of claimants to congestion pricing's revenue. But no one will get the revenue if congestion prices do not exist. Just as the first goal of any politician must be to get elected, the first goal of any toll revenue distribution must be to secure the initial approval of congestion pricing. For this reason the path to congestion pricing does not go through transit agencies or highway bureaucracies, and it does not involve efforts to buy off motorists. Rather it involves igniting the self interest of cities. Only when it offers concentrated benefits to strong political forces will anyone rise to fight for congestion pricing."