Just Pricing: Comparing the Effects of Congestion Pricing and Transportation Sales Taxes on Low-Income Households

Those who oppose congestion pricing on roads frequently argue that low-income, urban residents will suffer disproportionately if tolled to use congested freeways, either through higher out-of-pocket costs for travel and/or by diverting, delaying, or discontinuing trips. Too often, however, this assertion is made in the abstract, without considering 1) how much impoverished residents currently pay for transportation through fuel and sales taxes or 2) how much impoverished residents would pay for highway infrastructure under an alternative revenue-generating schema, such as an increased sales tax. And while increased local sales taxes are among the faster growing forms of transportation revenues in the U.S., they are rarely criticized on social equity grounds. In this paper, we compare the cost burden of an existing congestion-priced high-occupancy/toll facility on State Route 91 (SR91) in Orange County, California, with the cost burden of Orange County’s local option transportation sales tax. We use Consumer Expenditure Survey data and user information from the SR91 project to model expenditures by income group. We use these models to estimate the cost burden by income group for both sales taxes and congestion charges. We find that although the sales tax spreads the costs of transportation facilities across a large number of people, it redistributes an estimated $3 million (USD) per year from less affluent residents to those with higher incomes for an individual project; the redistribution is as high as $26 million for the entire sales tax program. Given these results, we conclude that the increasingly popular U.S. trend of using local option sales taxes to fund transportation improvements conflict with both environmental and equity improvements in transport policy and finance.

Language

  • English

Media Info

  • Media Type: CD-ROM
  • Features: Maps; References; Tables;
  • Pagination: 27p
  • Monograph Title: TRB 86th Annual Meeting Compendium of Papers CD-ROM

Subject/Index Terms

Filing Info

  • Accession Number: 01045550
  • Record Type: Publication
  • Report/Paper Numbers: 07-0906
  • Files: TRIS, TRB
  • Created Date: Feb 8 2007 5:29PM