Port Authority officials think there is promise in variable toll rates as a traffic management tool. They began with differentiated toll rates by time of day March 25, 2001. Assessment has been complicated by the ructions of 9/11/01 and the lack of normal traffic patterns, but a paper prepared by assistant director Mark Muriello and planning manager Danny Jiji says that its "value pricing" has enhanced PANYNJ toll... MORE
Port Authority officials think there is promise in variable toll rates as a traffic management tool. They began with differentiated toll rates by time of day March 25, 2001. Assessment has been complicated by the ructions of 9/11/01 and the lack of normal traffic patterns, but a paper prepared by assistant director Mark Muriello and planning manager Danny Jiji says that its "value pricing" has enhanced PANYNJ toll revenue and "produced traffic management benefits to address congestion."
They call it "one of the most aggressive applications" of value pricing on existing US toll facilities.
"Given the increasing level of congestion experienced in the New York-New Jersey region on a daily basis, the program has generated meaningful steps in addressing traffic congestion through price incentives. While it is only a first step in creating market signals to manage transportation demand, establishing refinements to the program that are effective and locally acceptable will require continued time and effort to communicate benefits and increase public acceptance."
But the paper says the primary goal of what it terms the "Value Pricing Toll Program" was to generate increased revenues to support the deficits of the PANYNJ's transit operations (the PATH subway, and the bus terminal services.) Apparently across the board increases in toll rates were unlikely to be accepted politically.
Cash tolls for cars increased from $4 to $6. In place of 25% discounts for prepurchase of 20 trips (and 50% for Staten Island residents) which made the tolls effectively $3 and $2 before the changes and a 10% discount on E-ZPass transponder tolling, the new schedule provided for deeper discounts from the high cash toll - $5 for peak period use of E-ZPass and $4 for offpeak trips. Peak periods are 0600-0900 and 1600-1900 weekdays and 1200-2000 weekends.
For trucks there are entirely different incentives. Previously tolls were $4/axle cash, and $3.60/axle (the 10% discount) for E-ZPass transponder. They have gone to all-hours cash $6/axle a small midday and evening discount of $5/axle and a deep discount to $3.50/axle for small morning hours trips 0000-0600 weekdays. That means that an 18-wheeler pays $17.50 night-time vs $30 peak and $25 daytime off-peak.
Muriello and Jiji say: "The Value Pricing Toll Program has been successful in accomplishing its revenue objective in support of the capital investment plan, and has also proven to be a success helping to manage traffic congestion at the Port Authority crossings."
As described the PA reached its revenue target more through luck than good forecasting. There was a far smaller shift to transponder tolling than its forecasts suggested - 4%-pts less. With less discounted tolls than expected revenues were higher, at least until the 9/11/01 attack effects were factored in.
The clearest result of the toll differentials is in early morning travel. The 0500-0600 hour before the increase in toll rates saw a 21% increase in traffic 2003/2001, two thirds of which occured immediately and one third which followed in the next two years. The data excludes the Holland Tunnel because of the unusual post-9/11 restrictions. Immediately following the toll rate differential around 0600 the PA noticed a reduction in peak hour traffic that was manifested in an earlier end to backups. They were clearing up 20-30mins earlier.
But traffic overall has remained depressed post-9/11/01. That has led to some movement back into the 0600-0900 period.
"The lesson appears to be that a $1.00 differential between peak and off-peak toll rates has produced some meaningful shift of a.m. peak-period to an earlier hour, but these shifts are highly correlated to the overall level of congestion experienced in the peak hours."
The differentiated toll rates had no discernible effect in moving traffic beyond the morning peak into the middle of the day. Either motorists don't have the flexibility to travel after the peakhour or the $1 differential is insufficient incentive. The PA plans surveys to attempt to establish the more important factor.
In the afternoons the toll rate differential seems to have increased early travel, as in the morning, but the shift is much smaller and not statistically significant. Weekend travel seems to be price inelastic with different toll rates making no discernible difference to travel patterns.
"The lesson learned from this experience is that the more discretionary nature of evening and weekend travel into New York City may be more inelastic than originally expected."
Transponder use did increase with the larger incentive from the increase transponder discount. Transponder tolls rose from 60.4% in Jan 2001 to 65.5% of the total in May 2001. The proportion has since grown to 69.1% in March 2003. Not all the increase can be attributed to incentives however, because the mix of traffic has changed for extraneous reasons. Occasional travel, by tourists and other visitors is down much more than local commuter and business travel, who are more inclined to establish a transponder account.
Trucker use of transponders increased from 57% of transactions Jan 2001 to 65% March 2003.
Muriello and Jiji say there is "tremendous potential" for additional benefits from coordination of peak-pricing schedules with neighboring tollsters. The area has 8 million E-ZPass tags. Joint publicity via the customer service centers, they say, might gain larger changes in motorist travel times than the PA has been able to achieve on its own with rather modest publicity for the differentiated toll rates.
The PA is using FHWA Value Pricing funds for followup studies. (Contact mmuriello@panynj.gov) TRnews 2003-09-21
