Revenues from a Statewide Congestion Pricing Program

Abstract

Many states in the United States have identified the need to invest in major highway corridors to accommodate growth and ensure the state's economy is competitive. With conventional pay-as-you-go approaches to funding and procurement, the necessary projects could take decades to complete and would require additional public funding. One innovative financing alternative that may be used in up to 15 states under the Federal Value Pricing Pilot Program is to employ congestion pricing to generate a revenue stream that can leverage the up-front private capital and thus accelerate the delivery schedule for planned state projects. With variable pricing, tolls on existing limited-access highways could be used to manage growing congestion. Revenues from the tolls could be used to ( a) pay for the expansion, reconstruction, or rehabilitation of some or all of these highways; ( b) help pay for the construction of new highways; and ( c) fund improvements in transit services the demand for which would be stimulated by road congestion pricing. This paper presents a sketch-planning approach to estimate the revenue that could be raised if a state were to implement congestion pricing on some or all of its freeways and, for illustrative purposes, demonstrates this approach with data for a case study state.