Economic Facts vs. Progressive Fallacies
To the great consternation and detriment of the motoring taxpayer, WSDOT has heralded the grand success of its new Express Tolling scheme imposed on the northern half of I-405. In this analysis, we will expose the many failings of the Express Tolling, and provide ample proof that there is no net gain to the traveling public – simply, the huge aggregate costs borne by the vast majority of commuters far outweigh the benefits provided to a tolled or privileged minority.
Recently, the WA State Department of Transportation (WSDOT) has installed a vast array of sensors and cameras for their grand tolling scheme on I-405 lanes extending north from Bellevue to the Lynnwood interchange with I-5. Make no mistake, the secret is out: this I-405 intrusive tolling scheme serves as the proving ground for its expansion to all highways in Washington State. Let’s examine WSDOT’s amazing claims that they are simply improving the traveler’s experience by graciously “giving options” to whom it dubs its “customers”. (And, to drive home their bona-fides, WSDOT Secretary of Transportation Lynn Peterson has actually proclaimed on public airwaves that the new system has literally begun saving people from suicide; although, as of yet, officials have failed to disclose how many “customers” they have driven toward suicide.)
In order to test WSDOT’s successful benevolence, we will herein employ economic logic as opposed to the wishful stories and slogans broadcast by bureaucrats. Remember, Economics is the science that studies the effects when people expend their limited resources (private capital) on their alternative choices, each with differing returns of value to them. It should be recognized that people naturally respond to the incentives and disincentives in their lives (without helpful coercion), and that we tend to spend our precious capital based on the expected value returned for each choice we make among our alternatives. Capital, valuable limited resources that is, includes one’s personal time – a quite finite and thus very valuable resource we must always consider.
To clearly illustrate the WSDOT’s claims, we will first examine the state of traffic flow on I-405 without the Express Tolling Lane (ETL) scheme (i.e. the status quo scenario), and then compare the supposed ‘benefits’ experienced after the ETL tolling scheme has been imposed, concentrating on the five traffic lanes of I-405 that have been constructed between Bellevue and the Bothell interchange (WA-522).
Traffic Flow Without the WSDOT’s ETL Scheme being Imposed
The stretch of I-405 under scrutiny contains five traffic lanes, for which Washington taxpayers have already paid, defining our status quo scenario. Suppose that these lanes are designated as General Purpose Lanes (GPL), thus all lanes would be freely accessible to all vehicles driven by all taxpayers (who paid for them) and accommodate other travelers such as visitors and interstate transporters as well. This means that all drivers would be allowed to freely enter or exit any of the five lanes as they see fit. This freedom-centered traffic policy would be based on allowing maximum utilization by using every lane’s full capacity, affording an enormous amount of Total Vehicle Throughput (TVT) at a given point in time. TVT is defined as the average speed of vehicles multiplied by the average density of vehicles occupying that roadway at that time. We will regard the total vehicle throughput as the standard measure of traffic flow efficacy, and increases to it will determine whether newly imposed restrictions and costs have improved traffic flow, or not. TVT is the superior measure as opposed to relying on promotional anecdotes, wishful thinking, or “benefits” that may reward a subset of favored drivers, while simultaneously degrading the transit of all others who rightfully seek to travel efficiently.
The WSDOT likes to publicly cite only changes in the average speed of subsets of motorists as their measure of success – but this is misleading as changes in average speed alone for some drivers gives only part of the scheme’s total impact. Revered economists have taught us that, for any sound economic analysis, we must weigh all the net effects that are ‘seen’, and those effects that are ‘unseen’ – that is, not only do we consider all the benefits that are credited because they are obvious, immediate, simple, and welcomed, but we must also measure and include all of the costly effects which are frequently ignored because they often tend to be obscured, deferred, complex, or unpleasant. These ‘unseen’ economic effects commonly lead to dreaded unintended consequences.
We know that for any stretch of roadway, under the demand and conditions at a given time, it will contain only a certain amount capacity for its peak vehicle throughput. Peak TVT occurs at some level of traffic density where there is some unused capacity combined with the highest average vehicle speed safely attainable. Drivers intuitively know this and constantly weigh and re-weigh their individual costs, benefits, and risks of entering a roadway at a particular time of their choosing. We are placing an economic bet that the time, money, nerves, and risks we expend on each trip is worth it to us, or not. All travelers (truckers, shoppers, soccer moms, distributors, visitors, commuters..) make these calculations daily, each weighing their costs versus their perceived benefits – with and without government “incentives”. Coercive incentives result in benefits for some, and usually punishments and restrictions for all – benefits that authorities guarantee will somehow enhance our lives above and beyond the freedom-based status quo.
Thus, with five lanes fully utilized, freely, with all of the status-quo traffic constraints (capacity, demand, weather, accidents, etc.), maximum throughput will depend on the total net effect of all drivers, at a given point in time, determining for themselves whether entering the roadway in question is worth it to them. A large part of the problem with authoritarian “solutions” is that officials never seem to understand that not only do individuals constantly make these decisions for themselves better than any third party would, but moreover, that each individual’s circumstances of risk tolerance, finances, trip objectives, etc. yields a differing value and subsequent decision unique to each individual – millions of individual daily decisions that central “planners” could never accurately compute. It is simply impossible for such planners and elite masterminds to know all the individuals’ decision criteria and the ever-changing economic values they place on alternative outcomes. Yet this never seems to deter government from riding herd on their flock of taxpayers – hammering out one-size-fits-all ‘solutions’ by imposing onerous new costs based on one-size-fits-all assumptions regarding the capabilities and worthiness of the taxpaying masses.
Example: Carpool economics. Apparently, government authorities cannot conceive that there is no need for them to ‘incentivize’ people to form carpools (to corral them into conforming, or to subsidize carpoolers by punishing everyone else). Newsflash - If there is a mutually acceptable economic net benefit for someone to form a carpool, these people are quite intelligent and will be incentivized to do this by themselves – naturally! – No externally-imposed incentives are required for citizens to obtain this benefit for themselves, especially as such mandates place a net negative disadvantage to all others by the additional costs of time, money and severe lane restrictions imposed on the rest of the motoring rabble.
Let’s enumerate some of the motorists’ status-quo incentives, cost versus benefit considerations for valuing their transit options, utilizing five general-purpose lanes (GPL) freely, without imposition of the Express Tolling (ETL) scheme:
· Costs vs. Benefits considered (spending vs. saving):
o The time consumed to successfully transit a given stretch of roadway
o The opportunity cost of reduced time for valuable alternatives
o The cost of money spent on fuel
o The cost of physical ‘wear-and-tear’ on the vehicle
o The cost of ‘wear-and-tear’ on the commuter’s health
o The costs incurred by arriving late, missing or delaying appointments
o The costs spent to mitigate risks, such as with traffic delays, unpredictability, missing or cancelling obligations, delayed deliveries, etc.
The key point here is that even without benevolent government ‘incentives’, every potential traveler makes economic decisions daily, attempting the trip at the time and mode of their choice when they believe that their personal objectives are worth all of the status-quo costs to them.
Traffic Flow After the WSDOT’s ETL Scheme is Imposed
For WSDOT’s beneficial claims to be proven true, they would have to demonstrate that the installation of the ETL Tolling scheme achieves a net benefit to the majority of motorists, yielding a new total vehicle throughput that is greater than that already experienced under the status quo of utilizing five unlimited-access general-purpose lanes that the taxpayers have already financed.
WSDOT installed the I-405 Express Tolling scheme where two of the five (40%) general purpose lanes (GPL) were eliminated, and then replaced with two “express” toll lanes (ETL) that no one can use unless motorists meet highly selective requirements, pay additional fees and tolls, and obey many new lane-use restrictions. WSDOT high officials have publically proclaimed the new I-405 tolling scheme as a great success by granting ETL access to the few, at the huge aggregate cost of time delays, new fees, more gasoline, new risks, and myriad new restrictions imposed on the many. WSDOT Secretary of Transportation Lynn Peterson has actually cited that their quick success has resulted from them “giving choices” to their travelling “customers” – i.e. providing three lanes of so-called “free” access to the masses and “express” access for those able and willing to pay the king’s ransom, and not to mention the success of literally saving lives. Let’s analyze WSDOT’s claims.
By first reducing GPL’s by 40%, this implies putting five lanes of traffic into three lanes. ETL claims of success are put at a severe deficit from the outset, requiring that the ‘benefits’ then afforded those allowed to access the express lanes somehow outweigh this great cost. WSDOT believes that by making transit more costly that they have provided a ‘solution’ to traffic woes. Government’s great fallacy is in believing they can punish and tax the people into prosperity, by imposing punitive costs, aka “providing choices” to the people, herding the People toward their vision of transit utopia. Nothing could be further from the truth. This reduction in GPL roadway might give the illusion that WSDOT has reduced motorists’ demand to use the system when significant numbers of frustrated motorists become deterred. But, of course, by this restriction, whether a particular commuter simply cancels or delays their trips, or whether they brave the more-congested remaining GPL lanes, in each case, all of these motorists bear greater costs than they would have before the new ‘choices’ were forced upon them.
The remaining GPL lanes, accessed as beforehand without tolls, WSDOT likes to portray as “free access” to their “customers”. To the contrary, all of the lanes, including the ETL’s, were paid for by taxpayers at the fuel pump. Washington State has perennially been in the top 10 states with the highest rate of fuel tax per gallon. At current gasoline prices, nearly one quarter of the price paid at the pump is diverted to transportation taxes. Readers should be advised that the state government masterminds have deemed the current level of fuel taxation as too low for expanding their schemes. Beware, a brand new transportation tax, dubbed the “Road-Use Fee”, is now on their drawing board, soon to be implemented statewide.*
Under the ETL scheme, the “express” toll lanes are banned from use except by those traveling in approved vehicles, by those who accept a myriad of restrictions, and accessed by those who agree to pay for this curious new privilege via tolls and fees charged to them. On top of all of the costs of the status quo, ‘express’ tolls are the ransom paid for those granted access to the ETL’s in order to supposedly travel faster than all the sorry masses stuck in the over-congested GPL’s who are now clogging the system they paid for "for free”. But the masterminds’ final twist is that the ETL toll at any given point in time is unpredictably variable, running from a minimum of $0.75 up to $10.00 per trip! WSDOT’s express tolls, aka “congestion pricing”, are based on fluctuating roadway “demand”. Variable tolls are employed to deliver their guarantee of traveling at least 45mph in the ETL only; i.e. As the density of vehicles using the ETL’s increases, the toll charged is increased up to $10.00 max (capped by current law) to ensure that ETL’s never become congested. WSDOT has yet to publically reveal the algorithm used to determine the toll amount imposed at a given time.
Below, we will examine a few of the serious “glitches” (a term WSDOT favors to dismiss its defects) in the ETL system, but it will become obvious (if it is not already) that the fatal flaw is the huge new aggregate cost of time, money, and uncertainty that greatly outweighs the artificial benefits ‘provided’ – how could ETL ever increase the overall TVT or improve the transit of average motorists considering the new costs imposed over the status quo? Let us examine some of the ETL’s key impacts:
· The Favored Few: Who exactly do WSDOT Big-Wigs allow (“give the option”) to access these ETL’s?
o Government vehicles and buses chug along, toll-free
o Government-authorized vanpools smoothly transit, toll-free
o Registered carpools with 3+ passengers get to ride, toll-free
o Motorcycles whiz by, toll-free (how is this in the spirit of “high occupancy”?)
o Solo drivers, and two-person carpools at peak times, are charged the Toll
o Private vehicles over 10,000 lbs. are all banned from the express toll lanes
· The Fatal Fallacy: WSDOT will of course claim that they have reduced traffic demand somehow by making congestion far worse within the GPL’s, forcing some motorists to be deterred away from I-405, thus amazingly causing an overall benefit to all travelers! This is an economic fallacy because those drivers who decide to use slower alternative routes, defer their trips, or cancel their previous appointments, in addition to all of those who must spend more time in the artificially increased congestion, all bear new costs of time, money, or lost opportunities. Again, those vehicles that are deterred from using the new system do not constitute a “reduction in demand”, but rather such forced mass frustration represents a huge new cost incurred such as having to burn additional gasoline clogging alternative routes, and paying the consequences for missing appointments, delaying deliveries, and by consuming more time than would be necessary to achieve the trip’s same purpose under the status quo.
· Constrictions Add to Uncertainty: Travelers without specific knowledge of where freeway exits are and how and where to exit ETL’s far enough in advance is very problematic because access points are narrow, few in number, and poorly marked. Authorized access to ETL’s are demarked by a painted double line, punctuated every few miles, briefly, by a perforated line – crossing the solid lines is illegal, therefore, the only way to enter and exit ETL’s is through these small, dashed portals. Of course, when ETL restrictions cause motorists to miss their freeway exits, they likely will incur additional unexpected costs in missing appointments, backtracking, and driving on unfamiliar arterials. Where uncertainty is increased, unnecessary costs will mount.
· ETL Access is Dangerous: Because the access points are so short and few, exiting ETL’s can be dangerous because they can require virtually stopping in the express lane to attempt merging with the adjacent GPL lane, where traffic is often grinding along much slower, or may be virtually at a standstill. The ETL’s benefits are also significantly reduced by the time it takes to safely exit them, by having to cross all the GPL’s in order to exit the freeway on the right. Not only does one have to slow to GPL speed (assuming ‘express’ lanes are working as advertised) and merge safely across all of the remaining general purpose lanes, but one must exit the ETL far in advance of their targeted freeway exit, guessing at which ETL exit portal will allow this egress to be accomplished safely. The same merging mess occurs in reverse for vehicles entering the roadway from the right, who also must cross all GPL’s safely in order to reach an ETL access point.
· Carpool Formation is Prohibitive: 2-person carpools (driver + passenger) have been historically difficult to arrange, but 3-person minimum carpools are prohibitively difficult. This is practically impossible for almost all motorists. For a carpool to make economic sense, the benefits would have to outweigh the costs, meaning that successful carpoolers must live and work at practically the same location, across a long distance, and, they must know of each other’s needs and conditions in advance in order to form. Any supposed ETL efficiency gained by the carpoolers must eclipse the extra time and money and risk it takes to ferry passengers to and from their starting point, and to and from their destination. Once a 3-person carpool drops off one person (or until the third one is picked up) the carpool reverts to a 2-person carpool which is prohibited from the ETL’s at peak hours. To render them even more improbable, ETL carpool requirements are arbitrary and are changed throughout the day, not to mention that carpools are required to register with ETL, and pay the start-up fees and billing. In an ironic twist, WSDOT then must trust that the carpoolers themselves will manually switch their tracking device to pay the toll when their passenger numbers fail to meet the magic head-count number required at their particular time of transit.
· Variable Tolls are Unpredictable: The variable tolls are changed unpredictably throughout the day, and already, motorists have felt the sting of the maximum toll of $10.00 per trip imposed on them. Keep in mind that the ETL benefits are supposedly derived from ETL users (approved elites and the paying affluent and desperate) travelling at faster average speeds than the taxpaying mob struggling to squeeze into the remaining GPL lanes “for free”. How ironic is it that the $10.00 toll already imposed, because it is capped by current law, at its ceiling it is then prevented from going higher in order to inhibit ETL use when they are “too congested”? – i.e. if already maxed, the toll rate can’t be jacked up high enough in order to maintain ETL average speeds faster than GPL average speeds – which we are told is the genius behind express tolling in the first place. The reader is urged to think about this – how long will it be before the WA state Transportation Commission raises the toll cap to $25 per trip? $50 per trip?
· Intrusiveness is Over-the-Top: Even when a “customer” meets the vehicle and passenger requirements, they still must pay an ETL registration fee, obtain and install a vehicle tracking device to be exempt, and front-load an on-line billing account if they want tolled access. For those who cherish their privacy and want to avoid registration and on-line billing yet agree to pay for ETL access, a punitive $2.00 fee, in addition to the variable toll, must be paid per trip. This is abusive: For a minimum toll of $0.75, the extra $2.00 fee, for avoiding the registration and electronic billing, constitutes a 167% addition to the actual toll! (And, moreover, the motorist’s location and time-stamp are still recorded by WSDOT’s unblinking cameras, sending them the friendly, jacked-up bill by mail).
· ETL Costs are Onerous for Commuters: For the average round-trip commuter, who cannot afford to miss their job’s starting whistle, the potential cost of $20 in tolls per day, equates to about $5,000 per year. For a person earning a $50k salary, that’s about 10% of their income consumed by tolls alone, paying for the privilege to commute using lanes they’ve already bought and paid for through their transportation taxes! How much of our wealth will be siphoned off when ETL’s are expanded to all of our freeways and highways statewide? – not to mention how much after the addition of a new tax imputed on every vehicle’s mileage? *
Authorities frequently trumpet that they can deliver superior benefits to their subjects better than any other regime – forcing superior outcomes contrary to We the People making our decisions freely. Honest businesses, operating in free markets, face the risk of going bankrupt unless they constantly strive to deliver more goods and better services at a lower price. As for governments, it is precisely the opposite – they reliably waste and deliver poorly, at far more cost than would be delivered by free markets. Behold the Washington State Department of Transportation’s incredible claims that it can improve overall traffic flow by imposing vast new restrictions on roadway use, accompanied by a briar patch of additional costs to motorists.
Since the beginning of time, noble authorities, be they of aristocracies or bureaucracies, have promised to shower the common People with their benevolent solutions, and proclaim to deliver them more efficiently and more fairly than free markets do. Alas, WSDOT’s Express Tolling Scheme is just one more attempt at creating the illusion of delivering increased prosperity to all, by granting special privilege to a favored minority paid for by imposing additional costs and ever more restrictions on the unwashed, taxpaying masses.
Finally, to add insult to injury, the last dirty secret lies in attempting to get WSDOT to reveal to whom all of the huge fees and tolls, aka “ETL revenue”, are benefitting. WSDOT reports that $0.54 of every toll “on average” pays for certain ETL administrative costs, as illustrated below.
WSDOT’s website states that, “The remainder of the toll goes toward other costs including enforcement, transponders and a dedicated fund for future I-405 improvements as approved by the state legislature.” This vague explanation is the best we have from them to date, but note that the variable portion of the toll, the total charged less 54 cents, will go to for-profit contractors, and apparently to a “dedicated” government “fund” to be spent by the state in the future on unknown “reinvestments”. The reader should clearly see here that both WA state and their favored profiteers will take home the lion’s share of all tolling ‘revenue’, and make no mistake, the driving economic incentive for these parties is for express tolls to be set as high as possible in order to maximize their profits.
For the record, users of our state transportation systems, especially taxpayers, are not “customers” when they are coerced by the WSDOT and other government elites. Customers exist in free markets, and voluntarily pay for only those goods and services where they find the value of the benefits delivered outweigh their costs. Furthermore, it is quite rich when government uses such catchy euphemisms as “giving options” to the People as they unabashedly restrict and replace their choices with more costly alternatives and negative incentives, resulting in the elites controlling the only ‘options’ the People are then allowed to make.
*Taxpayers Beware: Next up on WSDOT’s road-trip to utopia – State planners now want to implement a high-tech method for extracting new “Road-Use Fees” (aka additional transportation taxes) upon Washington’s taxpaying “customers” by requiring that a GPS-based tracking device be installed on each individual vehicle! This will afford government agents to surveil the time and location of your every vehicle trip, and charge you with a new tax for every in-state mile travelled.
Contact Your State Legislators
Tell your State Legislators you demand that the Express Tolling scheme is scrapped, and they restore all lanes to general-purpose lanes, freely accessed by all taxpayers.
Click on the Link below to easily Contact your WA State Legislators:
1) If you know their names, click on: http://app.leg.wa.gov/Rosters/Members/
2) If you’re unsure of their names, find them at: http://app.leg.wa.gov/DistrictFinder/
a. Set the ‘District Type:’ to “Legislative” (if it is not already)
b. Enter your WA address (required to verify district); Click on “Find My District”
c. Scroll down to find the district box on the map for your address
3) Click separately on the names of your three state legislators to get their contact info.
4) Write down each of their phone numbers; click on their ‘Email’ link to get a web form
5) Send each of them a brief, concise email identifying yourself as a voting constituent, and stating politely yet firmly your desire to scrap the onerous Express Tolling scheme
6) Follow up your email with a quick phone call to your legislators. (This can often be far more effective than email alone.)
7) Do it today, before it’s too late.