New York City is the second most congested city in the U.S. For the New York Metro Area, commuters spend an additional 92 hours sitting in traffic costing them over $2000 in wasted time and gasoline each year.
This past January, the City’s leaders decided to do something about congestion. New York became the first U.S. city to implement a system that charged a toll on vehicles entering its central business district. The policy is designed to reduce travel time within the central business district of the city. While New York is the first U.S. city to use this approach, it has been used successfully in Singapore, London, Milan, and Stockholm.
Economists have long argued that charging a toll which varies by the amount of vehicles using a road is the most effective way to manage congestion. The toll should be highest during peak driving hours and lower the rest of the time. The toll creates incentives that can alter an individual’s driving pattern. Less essential trips can be shifted to off-peak hours. Some commuters switch to alternate transportation modes like buses or rail. It also encourages carpooling. All of these behavioral changes reduce congestion.
Recent research published by the National Bureau of Economic Research provides a preliminary assessment of New York’s tolling system. The authors of the study found the program working as expected.
First, traffic speeds in the central business district increased 15 percent compared to traffic speeds in other major U.S. cities during this period. The higher speeds resulted in an 8 percent decline in travel time within and reaching the city’s central business district. Second, roads feeding into the central business district also experienced an increase in speed. Third, the increase in speed was similar between neighborhoods with different income levels. Finally, carbon dioxide emissions declined between two and three percent. However, the authors found no decline in the emission of particulate matter. These early results on travel speed increases and pollution declines are similar to the other cities that implemented zone-tolling policies.
A new study by the Regional Plan Association draws similar conclusions. They find traffic delays declined by 25 percent compared to the same period one year ago. Traffic delays outside of Manhattan fell 9 percent relative to a year ago. This result is important because it shows the tolling system did not divert traffic to roads outside the toll zone. Finally, the usual post-holiday decline in congestion was 19 percent larger with tolls.
A Siena College poll in March found 42 percent of New York City residents support the tolling system. In Stockholm, before the tolling system began, 36 percent of residents supported tolling. One year after the system was operating, 66 percent supported tolling. We can expect a similar growth in support from New York drivers as they experience the faster speeds and lower travel times. In addition, if the funds result in an improved public transportation system, support will grow.
A common concern about tolling systems is they are regressive. This means tolls are a larger percentage of a low-income driver’s expenditures than a high-income driver. To reduce this problem, the New York system provides a monthly 50 percent discount on the first ten trips for low-income drivers. Other policy options include reducing the 4.5 percent city sales tax or lowering the city’s income tax rate for low-income drivers in order to offset some of the costs of paying tolls.
New York City has taken a bold step in an effort to reduce congestion in the central business district. The $9 toll during peak driving times for most vehicles has already shown to be an effective policy tool to manage traffic in the city. Transportation managers will learn more moving forward. Adjustments will be made. Faster driving speeds and reduced travel time will increase support. Other congested cities will take note. If New York can do it, so can we.
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