5.2.09

CROSSING OVER FROM THE DARK SIDE. The former Undersecretary for Policy in President Bush's Amtrak-unfriendly Department of Transportation sees an opportunity to practice fiscal responsibility.

Instead of spending time with their families, participating in civic life, or investing in their careers, millions of middle-class Americans are stuck sitting in cars.

The root cause of congestion is quite simple: Prices aren’t set to balance supply and demand. Imagine if consumers paid the government a weekly food tax that permitted them to take all the food they wanted from any grocery store. This policy would create massive food shortages. Yet, by and large, that’s how we pay for highways in America. As long as highway prices have little to do with highway costs, congestion will be inevitable.

Recently, however, serious cracks in status-quo defeatism have emerged. Thanks to technology breakthroughs, such as electronic toll tags and stickers, most major metropolitan areas are now in the process of implementing state-of-the-art, variable time-of-day road-pricing programs. The projects completed to date reveal four critical points: 1) variable pricing immediately and sustainably reduces congestion; 2) the more road space you price, the cheaper the price; 3) most drivers love the experiments once they’re implemented; and 4) pricing can be installed on a road in a matter of months.

With a growing body of research and real-world demonstrations, policymakers now have a firm foundation on which to build. Pricing policies can be flexibly integrated with mass-transit investments, targeted subsidies to low-income people, and tax cuts. In addition, pricing can attract private-sector debt and equity capital to upgrade infrastructure. Implementation is sometimes tricky, and it requires a lot of data to get the pricing right. But very few other policies can achieve so many “wins” as variable pricing can when properly designed.

The Superintendent added the emphasis.

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