Los Angeles eyeing congestion pricing

Facing notorious traffic jams and a desire to expand transit options, Los Angeles has rekindled a plan to charge motorists to drive into the city. If it is implemented along with a similar plan in New York, it would bring congestion pricing to the two largest cities in the U.S.

The Los Angeles County Metropolitan Transportation Authority, or LA Metro, is expected to release a Traffic Reduction Study this summer that will offer details on a pilot program. New York, which first began studying the concept 15 years ago, is poised to launch congestion pricing next year after winning preliminary federal approval last month.

Advocates hope the programs would offer blueprints for other cities looking to ease traffic, reduce greenhouse gases and create new revenue for capital projects.

Courtesy of L.A. Metro

"This is the kind of thing where people have been hoping its time is going to come for a long time now, but especially post-pandemic it's a great time to consider it," said Joshua Schank, a managing principal at InfraStrategies, who formerly was the chief innovation officer for LA Metro, where he and former CEO Phil Washington initiated the congestion pricing program.

"Post-pandemic transit is struggling, traffic is even worse than it was before, and the only way you're going to solve it is by pricing the roads," Schank said.

New York City remains on track to set U.S. precedent, but other cities are eying the option. Seattle, Boston and Washington, D.C. have considered charging motorists to enter their congested central districts during peak traffic hours. The San Francisco County Transportation Authority has looked at charging drivers, with the revenue being used to improve transit service. The agency paused the study amid the work-from-home trends, but said it expects to relaunch it again.

In Illinois, the Regional Transportation Authority in February adopted a long-term strategic blueprint that considers dozens of revenue options, including implementing congestion pricing on highways into Chicago.

The state of California is also considering several models, including congestion pricing, to reach a target of cutting vehicle miles traveled per capita by 25% from 2019 levels by 2030. The California Department of Transportation has set up an office to consider congestion pricing, Schank said.

"The case we were trying to make at Metro is, let's try it," he said. "Nothing else has worked; congestion has only gotten worse; at least we should try something."

While the concept of tolled express highway lanes is well established in the U.S., charging a fee for access to an entire road remains untested. Globally, the cities of London, Singapore, Milan and Stockholm have successfully introduced the programs. London, for example, which introduced fees in 2003, charges roughly $19 to enter a 13-mile urban zone between 7 a.m. and 6 p.m. on weekdays and 12 p.m. to 6 p.m. on weekends and holidays. Most vehicles also need to meet the city's "Ultra-Low Emission Zone" standards or pay an extra $16 daily charge.

LA Metro, which did not respond to requests for information by press time, is expected to release its long-awaited study this summer that will detail potential locations and measures to mitigate spillover traffic and environmental impacts and offer some kind of equity for low-income drivers.

Three pilot areas are reportedly under consideration. A January 2022 Metro blog post outlined potential revenue figures for four areas. A Santa Monica Mountains corridor would generate gross revenues of up to $1.67 million on a typical weekday, the agency said. A corridor on US-101 and I-5 would generate up to $507,000 a day, which "may not be enough to address spillover traffic, provide improved transportation options and invest in low-income assistance." A downtown L.A. freeways corridor could generate up to $918,000 in daily revenue, while a downtown L.A. zone would generate up to $2.55 million in gross revenue on a typical weekday. In that corridor, excess revenue would "likely support substantial mobility improvements and low-income assistance," the agency said.

Congestion pricing programs have taken on urgency in a work-from-home landscape where transit suffers from low ridership, federal subsidies are about to run out, and officials are scrounging for revenue.

S&P Global Ratings and Moody's Investors Service have negative outlooks on the public transit sector, and have started to downgrade agencies. On June 8, S&P cut by two notches the San Francisco Bay Area Rapid Transit District. BART, unlike many California transit agencies, is similar to the MTA in that it relies more heavily on farebox revenue than sales or property taxes.

In L.A., the reliance on sales taxes could spark skepticism about congestion pricing, said Joseph Krist, publisher of Muni Credit News.

"People may say, 'We do enough of this already when we go to the store, now are you going to charge me to go to the store?'," Krist said. "It sounds like an annoying detail but those annoying details could get in the way" of implementing a plan, he said.

Schank said frustration with traffic drives support for the Metro, citing a 2016 ballot measure that passed with more than 70% of the vote.

"Our perspective was that people are paying LA Metro their tax dollars because they are upset with congestion," he said. "Study after study has shown, and experience has shown, that building mass transit alone is not sufficient to really reduce congestion, and the places that have been successful in reducing congestion are those that have implemented pricing — it's a globally recognized phenomenon."

While New York's program, dubbed the Central Business District Tolling, would raise money for the Metropolitan Transportation Authority's capital plan, L.A. officials have not detailed how their new revenue would be spent, except to say it would be invested back into the tolled corridors to increase mobility options.

Krist said some people are already linking congestion pricing revenue to the capital needs of the 2028 Olympic Games, which L.A. is hosting.

"It's a very good idea for the environment, but it never gets presented under those circumstances," Krist said. "It always accompanies a time when an agency needs to do something, so it looks like a cash machine."

Political opposition to tacking fees onto previously free roads remains the chief obstacle to congestion pricing. As New York's MTA nears its start date, opposition is ramping up. In January, Rep. Josh Gottheimer, D-NJ, introduced legislation that would stop the U.S. Department of Transportation from awarding capital investment grants to the MTA until New Jersey drivers are exempt from congestion charges. In March, a group of lawmakers from both states formed a caucus to force the MTA to pause the program. And on Monday, New Jersey Gov. Phil Murphy sent a 15-page letter to the Federal Highway Administration urging it not to issue a final Finding of No Significant Impact that would allow the program to begin next year. The MTA's goal, Murphy said, is revenue generation, not traffic reduction, a "flawed vision for New York's congestion pricing program — a vision that would serve as a poor model for congestion pricing across the United States."

How New York and potentially Los Angeles handle the political opposition will be watched closely by other cities, Krist said.

"For anything controversial, that's the nature of the way it works: I don't want to go first, you go first," he said. "If these cities succeed, we will see more of these around."