Road Widening, Congestion Pricing Can Improve Metro-Area Drive Times
By Eric Fruits, Ph.D.
I’ve got a big family, which means we do a lot of laundry. With our old appliances, we were doing a load a day and there was a backlog of dirty clothes.
When our old washer and dryer went kaput, we decided on an upgrade. I bought the biggest, most energy efficient washer and dryer I could afford. I figured with bigger loads, we’d be doing fewer loads. But in some ways, I was wrong. Sure, the new washer and dryer could hold a lot more laundry, but we were still doing about a load a day.
However, something changed: The backlog of dirty clothes disappeared, and our utility bills decreased. Even though we are still washing clothes every day, we are washing more clothes more cheaply than we were before. Where it used to take three hours for a complete wash-and-dry cycle, now it’s closer to two hours. Those new appliances made our day-to-day lives measurably better off.
In Portland, the Oregon Department of Transportation is in the process of widening I-5 through the Rose Quarter, which has been named one of the worst bottlenecks in the country by the American Transportation Research Institute. ODOT forecasts the improvements will save more than 2.5 million hours of travel time each year and reduce crashes by up to 50 percent. For example, the current “worst” stretch (I-5 southbound, from the Going on-ramp to I-84 eastbound off-ramp), will see travel times drop 15-30 percent. Over a typical work year, that would save a commuter more than 20 hours of time stuck in his or her vehicle. Many, if not most, commuters through the Rose Quarter will be measurably better off because of this project.
Despite these anticipated benefits for commuters, opponents of the I-5 project claim that increasing highway capacity will increase congestion. They invoke a concept they call “induced demand,” arguing that wider roads “induce” people to drive more, leading to more traffic and ultimately even worse congestion than before the improvements were made. It’s much like arguing that I’m worse off because my new washer and dryer can handle more laundry than my old klunkers.
Critics of the project tend to confound traffic with congestion. Traffic is the number of vehicles or vehicle miles travelled. Congestion involves speeds or travel time. A road can have a lot of traffic and little congestion. Similarly, a road with relatively little traffic can be highly congested—such as streets around a neighborhood school in a residential area during drop-off and pick-up times.
To be sure, improvements around the Rose Quarter will increase traffic on I-5 and I-84. Some of that traffic will come from more people driving. But some of that traffic will be the result of people choosing to use the highways instead of taking arterials or residential streets, which will reduce congestion on these increasingly clogged roads. If it’s cheaper in terms of time to take a highway rather than an arterial, people will choose the highway. That’s not “induced” demand, that’s plain old vanilla demand. Lower prices lead to higher quantity demanded.
The Rose Quarter highway improvements are to be combined with a congestion pricing program that will further improve traffic speeds and travel times. Done properly, such pricing discourages driving when congestion is most likely. Anyone who has used Uber or Lyft has experienced congestion pricing with the services’ “surge pricing,” in which fares increase when demand for rides exceeds the number of drivers at a particular time. Congestion pricing smooths the timing of trips to foster a faster flow of vehicles.
The benefits of road widening are readily visible here in Portland. Last year, a newly completed auxiliary lane on I-5 southbound from OR 217 to I-205 removed a frustrating bottleneck. According to ODOT, that stretch of road went from five hours of afternoon rush-hour congestion to one hour a day of congestion, during the afternoon commute. OR 217 went from four hours of congestion to zero hours of congestion. I’m sure no one is sitting in their car on I-5 or OR 217 saying, “I really miss all that congestion.”
The Portland region is adding more than 30,000 people each year. Our transportation system needs to keep up with the influx of new residents, workers, and business activity. It’s this growth that’s inducing the demand for more and better roads, and the region needs to meet that demand.
Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on April 25, 2019.
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Testimony Before the Transportation and Economic Development Subcommittee of Ways and Means Regarding HB 5039
By John A. Charles, Jr.
Members of the Subcommittee, my name is John Charles and I am President of Cascade Policy Institute. Cascade is a non-partisan policy research organization working to promote public policies based on sound market principles. As a non-profit corporation we are supported by contributions from individuals, foundations and businesses, most of them based in Oregon.
Much of the proposed ODOT budget involves dedicated funding sources such as motor fuel taxes, which means the Subcommittee has limited discretion to move money around. However, there are some programs supported by the General Fund or lottery-backed bonds, and I would like to call your attention to several that appear to have questionable value:
Willamette Valley passenger rail, $9.86 million: This allocation provides operating support for the Portland-Eugene Cascades train that runs twice daily in each direction.
As noted in the budget documents, ridership for this line peaked in 2013 and has been flat for the past three years. Moreover, the ridership numbers provided to the Committee include the POINT bus service operated by ODOT. This significantly inflates the total number of riders attributed to the passenger rail program.
The POINT bus service includes five routes with stops at 42 locations, as shown below:
- Portland-Eugene, 7 trips/daily each way, 5 stops
- Bend-Ontario, 1 trip/daily each way, 11 stops
- Redmond-Chemult, 2 trips daily each way, 5 stops
- Portland-Astoria, 2 trips daily each way, 8 stops
- Klamath Falls-Brookings, 1 trip daily each way, 12 stops.
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ODOT’s Passenger Rail Project Equals Increasing Costs, High Taxpayer Subsidies
By Justus Armstrong
The Oregon Department of Transportation recently published its Tier 1 Draft Environmental Impact Statement (EIS) for the Oregon Passenger Rail Project, which plans to expand and improve passenger rail service between Eugene and Portland and increase Amtrak Cascades rail service from two to six round trips per day. Out of two potential build alternatives—Alternative 1, which would improve the existing Amtrak route, and Alternative 2, which would create a new route along Interstate 5 between Springfield and Oregon City—ODOT has identified Alternative 1 as the preferred alternative. Many are optimistic about improved passenger rail options, but Alternative 1 would include anywhere from $870 to $1,025 million in capital costs. Is the project worth such a high price?
One of the stated goals of the Passenger Rail plan is to implement a cost-effective project, but based on ODOT’s own testimony, it appears that Amtrak is actually becoming less cost-effective. In a 2017 Legislative report on passenger rail performance, ODOT reported that “[t]he gap between revenue and costs continues to increase.…It is likely the costs to operate the service will increase in the coming years.”
The EIS estimates that Alternative 1 would cost around $48 million a year in operations and maintenance costs—a sharp increase from the $17.75 million ODOT currently pays Amtrak annually to support the existing rail service. The EIS also admits that this is a conservative estimation based on the assumption that Amtrak payments will triple as the number of round trips triples. Currently, ODOT subsidizes each one-way Amtrak ride to the tune of about $118, and with the costs to operate Amtrak already rising, expanding an increasingly cost-ineffective service risks adding to an even greater burden on Oregon taxpayers.
On the other hand, if the improved passenger rail service were to achieve the 89 percent increase in ridership hoped for by 2035, ODOT’s subsidy would be distributed more broadly among an expected 646,000 annual rail passengers. Theoretically, this could help make ODOT’s investment more worthwhile.
More Amtrak passengers would mean more ticket revenue, lessening the gap between revenue and operating costs. However, ODOT’s ridership projections are largely based on the hope that population increases in the Willamette Valley “could result in unprecedented ridership increases.” In perspective, only 105,000 (less than 4%) of the Willamette Valley’s 2.8 million residents were riding Amtrak in 2015. Living up to the ridership goals in the EIS would require a significant shift in transportation choice towards intercity passenger rail not yet seen in Oregon.
The draft EIS does not include projections for expected revenues and fare recovery, so exact measures of cost effectiveness for the project are not yet nailed down. Unless fare recovery is significantly improved, Oregon will continue to lead the nation in passenger rail subsidies and triple already wasteful operating expenditures.
There is also the matter of the $1 billion in construction and design costs that would have to come from state and federal funds. ODOT’s passenger rail plans are likely motivated by prospects of broader eligibility for federal funding, but any advancements in rail service are bound to be a costly investment for Oregonians.
Public transportation expansions are often put forward as solutions to highway congestion. However, the EIS for the passenger rail project admits that neither build alternative would alleviate Oregon’s congestion issues, stating that the potential reduction in the number of vehicles on I-5 between Eugene and Portland “would not be significant enough to affect or improve congestion on I-5.” In fact, the EIS states that the project could even exacerbate congestion by increasing vehicle activity on surface streets near Amtrak stations. Expanding passenger rail service may benefit the small portion of the Willamette Valley population that uses Amtrak, but would do little to address Oregon’s broader transportation challenges.
Instead of expanding Amtrak rail service, ODOT could plan on gradually increasing the frequency of Thruway bus service over the next 20 years. The No Action alternative already includes plans to increase intercity bus service between Eugene and Portland to seven round trips per day, so why not focus on further increasing bus frequency rather than replacing it with a more costly rail alternative? That way, transportation service can be more flexibly adjusted to transportation demands without the same level of capital investment and heavy subsidies that expanding passenger rail would require.
Justus Armstrong is a Research Associate at Cascade Policy Institute, Oregon’s free-market public policy research organization.
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Moving in the Wrong Direction
By Jakob Puckett
Oregonians have a proud tradition of giving back to distinguished or disadvantaged members of society. Businesses have broken barriers to provide better service to groups like seniors, veterans, new families, and vulnerable people, by offering discounted rates or donating services for a worthy cause.
In one particular and familiar industry, however, the state will not allow such generosity. Customers in the aforementioned groups looking to move from one home to another, who could benefit from special offers, would find themselves out of luck, thanks to an apathetic state agency with misaligned priorities.
Not everyone will accept this, though. 2 Brothers Moving and Delivery, a home moving business in Portland, has challenged the status quo of the residential moving industry for years. In addition to moving and rearranging homes, company founder Adam Sweet has been shifting the legal landscape of how to start a home moving company in the first place.
After a much-publicized state police sting operation embroiled Sweet in a legal tangle about whether he, then a college student, could move other people’s furniture without permission from established moving companies, he challenged the law and won. No longer would new moving businesses have to justify their existence to the competition. Now, Sweet wants to change another part of the law, one that’s just as unfair to even more people.
The state of Oregon treats home moving services like a public utility and regulates them similarly to commodities like water and electricity. Home movers painstakingly must organize, request, and publish their tariffs (the rates they charge on every aspect of their service). And they truly do “request” what prices customers will pay for their services. The Oregon Department of Transportation (ODOT) gives permission for their rates, under the guidelines of what is considered “fair and reasonable.”
However, those with the most influence in this oversight process rarely approach this standard from a customer’s perspective. What is “fair and reasonable” to industrial moving companies who rarely make residential moves (the companies with the loudest voices within ODOT) may not be “fair and reasonable” in terms of residential customer benefit.
Pressured by mountains of impending paperwork, small home moving businesses often find it easier to accept the proposed rates of these larger companies, rather than requesting individualized rates. ODOT employees end up determining what is fair and reasonable, on everything from the price of boxes to move your television to whether you pay per hour and miles moved or by the weight of your furniture.
The state tries to tell businesses what the consumer wants, and oftentimes they are simply wrong.
Leaving aside whether household moving services are a natural monopoly—defined as an industry with nearly insurmountable entry barriers that render competition almost impossible—ODOT, under a “fair and reasonable” cloak, prevents customers from having options that would be offered in any other industry.
Discounts are not allowed, meaning seniors, veterans, or any other group for any other reason cannot receive a lower price, even if the business wants to offer it. Donating services as a charity to individuals, such as transitioning homeless individuals or those with cancer, are prohibited. Undercharging a customer based on the published tariff rate results in a series of increasing fines, culminating in the state revoking the company’s ability to do business at all.
If the goal is to ensure that customers are not fleeced by moving companies adding hidden fees, Sweet sees a simple solution: include proposed exceptions in the published tariffs. “If it’s published in the tariff, you should be able to charge it,” he says, and that includes discount options. The Department of Justice already handles cases of business fraud, and law enforcement already has mechanisms for dealing with those situations. Why should ODOT make the process more complicated to the disadvantage of customers? Most Americans move eleven times during their lives, meaning this question usually arises nearly a dozen times.
Ultimately, it turns out that consumers really do need protection, but not from their own shortsightedness or from home moving businesses. Rather, the real risk comes from the anti-consumer mantras echoing through the halls of ODOT, determining how good or bad of a deal individuals and families can get during moving season.
Jakob Puckett is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.
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When Did ODOT Become a Consumer Advocate?
By Jakob Puckett
Do you need to be protected from your own judgment? If you’re moving from one home to another, the state of Oregon thinks you do. The Oregon Department of Transportation thinks that you are not capable of finding a fair and reasonable price to pay a home moving business to move your furniture, so ODOT injected itself into the equation.
Home moving services have to painstakingly request permission from ODOT to determine what prices to charge, making it difficult for businesses to lower their prices or offer discounts.
Even when businesses want to offer a discount to veterans, senior citizens, or disadvantaged people, they are prohibited from showing such generosity under penalty of fines and business closure.
And why is this? ODOT thinks it knows what’s best for consumers and makes these decisions on its own, without much input from the businesses actually offering the services.
The person who suffers the most from this is you, because as long as ODOT gets to determine what a “fair and reasonable” price is, you are prevented from having options that would be offered in most other industries.
So when it comes to the regulation of the home moving industry, the situation is clear: It’s time for ODOT to leave the price-setting business, and move us in the right direction.
Jakob Puckett is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.
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Road Policy Belongs to Those Who Show Up
By John A. Charles, Jr.
The Oregon Department of Transportation is hosting three Open Houses this month to discuss the possibility of changing how several local highways are managed.
Currently, we finance roads through gasoline taxes. However, a growing number of cars use little or no gasoline. Therefore, the legislature is requiring ODOT to study an alternative finance mechanism for I-205 and part of I-5 that would rely on user fees collected electronically.
In addition, those fees would vary in price depending on the time of day, direction of travel, and day of the week.
While this may sound punitive, the fact is that a single highway lane can move anywhere from 700 vehicles per lane, per hour, to more than 2,000 vehicles, depending on the density of traffic. At times of hyper-congestion, throughput drops dramatically as we sit in stop-and-go conditions.
An alternative would be to use variable toll rates to even out demand, thereby tripling the number of cars per lane while averaging about 45 miles per hour.
Is it a good idea to make our highways three times more productive through congestion pricing? That’s what the Open Houses will explore. Interested motorists should attend, because policy belongs to those who show up.
This is the schedule for ODOT’s community conversations, according to the department’s press release:
- Tuesday, Jan. 23, 4:30 to 7:30 p.m., Clackamas Town Center Community Room (Level 1 near Buckle and across from Macy’s), 12000 S.E. 82nd Avenue, Happy Valley
- Saturday, Jan. 27, 10 a.m. to 1 p.m., Lloyd Center (Level 1 between Ross and the ice rink), 2201 Lloyd Center, Portland
- Tuesday, Jan. 30, 4:30 to 7:30 p.m., Vancouver Community Library, 901 C Street, Vancouver.
- 17 to Feb. 5, the Online Open House will be active at odotvaluepricing.org. The public can see materials, view video recordings of the project Policy Advisory Committee meetings and leave comments for the project team.
John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.
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