Tolls coming to I-405; state needs to get it right

Washington needs a new round of transportation investments to boost our economy, and I believe the constitutionally-protected gas tax is the best way to pay for those improvements. There is no doubt though, as cars become more fuel efficient and more people choose electric vehicles, that the gas tax will decline as a stable funding source in the future.

That will raise many questions about the best way to pay for transportation infrastructure going forward. Possibilities include increased tolling, weight fees, motor vehicle excise taxes, a vehicle-miles-travelled tax, and other options.

The Washington State Department of Transportation (WSDOT) already operates tolled bridges (520 and the Tacoma Narrows Bridge) and high-occupancy/toll lanes, called HOT lanes, on SR 167. HOT lanes allow carpooling vehicles to use the lanes for free while charging other vehicles a variable toll based on traffic conditions.

The Washington State Transportation Commission will meet Wednesday evening at Kirkland City Hall to finalize its recommended approach to instituting HOT lanes on I-405. According to the Seattle Times, the commission’s previous two meetings garnered few comments on the plan, but that doesn’t mean the public will like the final plan the commission advances.

  • At first, tolling operations will eat up ¾ of toll revenues. From the Times:

The two new HOT (High Occupancy or Tolled) lanes, two in each direction between Bellevue and Bothell and a single lane each way between Bothell and Lynnwood, will have multiple entry and exit points, three zones, and variable tolls depending on the length of the trip and the congestion.

With the complexity also come high operating costs, about $5 million rising to almost $8 million a year by 2021, according to state estimates — totaling three-fourths of the toll revenue.

That’s an eye-popping total. In the early years, the tolling system operations will eat up 75% of the toll revenues. The commission and WSDOT need to give serious thought to whether that makes sense. That percentage will decline with time, and will be better in the overall system when the southern portion of I-405 has HOT lanes as well.

  • Need for revenue must be balanced against purpose of the system. The purpose of HOT lanes is to give drivers who need to move quickly the option of paying into a faster lane, while also raising revenue for the transportation system. The purpose of the highway system overall is to move people and goods where they need to go. Those goals can conflict.

A report by Cambridge Systematics in 2012 laid that out in stark terms:

Traffic growth drives revenue growth. While this is another obvious statement, it comes with more nuanced implications. Revenue growth will grow much faster than traffic growth because more corridor traffic demand will yield more corridor congestion and higher time savings provided by the express toll lanes. This in turn will drive up the toll rates to maintain the speed policy, which has enormous leverage on revenue. For example, for the median HOV 3+ scenario, we forecast the average toll rate paid to increase by approximately 45 percent between 2018 and 2030, without any adjustment for inflation. However, the overall traffic demand in the corridor is only forecast to increase by 12.6 percent.

In other words, slower traffic on I-405 will mean higher variable tolling rates and more revenue.

HOT revenue

  • Would HOV2+ mean better through-put than HOV3+? One decision the commission must make is whether a vehicle must contain two or more people, or three or more people, to qualify for free HOT lane use. As the Cambridge report pointed out, requiring 3+ will increase the number of cars in the HOT lanes that must pay the toll, raising more revenue, while also pushing more 2+ vehicles into the general lanes, which will slow down the general lanes and thus raise the variable toll rate in the HOT lanes, also raising more revenue.

The Cambridge study’s projected commute speeds bear that out. Revenue is greater under HOV 3+, but average speeds on the system would be lower.

Speeds

So which is more important, maximizing toll revenues or maximizing through-put on the highway (for which all gas tax payers are funding)? That’s a question the commission needs to ask and it must get the answer right. Through-put means moving the people and goods that the transportation system is designed to serve, while toll revenue should not be an end in itself.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.