Lesson
Develop a statutory and legal framework for as a foundational step for levying road pricing fees and utilizing revenues.
Experience from road pricing programs in Europe and Asia
12/01/2010
Sweden; Germany
Background (Show)
Lesson Learned
Congestion pricing programs face political, institutional, and public acceptance challenges and concerns everywhere in the world. Over a 12-day period, from December 7 to 18, 2009, a multidisciplinary scan team from the United States interacted with the experts in Europe and Asia to develop an understanding of factors that contributed to the successful implementation of road pricing. Based on their international experience, the scan team offered the following lessons learned on addressing legal and institutional issues.
Develop the statutory and legal authority early on as an essential foundation for road pricing programs.
Develop the statutory and legal authority early on as an essential foundation for road pricing programs.
- Stockholm Experience: Road user fees first became possible in Sweden in 1988 through a change in law, which allowed tolls on the bridges to Norway and Denmark. Stockholm defines its road pricing as a national tax, since the city of Stockholm has no power to tax nonresidents. As a consequence, changes to the fee schedule require parliamentary action. In London and Singapore, the congestion charge is considered a fee, which allows the rates to be adjusted by the managing authority and fines to be resolved through administrative actions. Stockholm officials report that the benefit of treating congestion charges as a tax is higher collections because taxes are paid with higher frequency than other fees.
- Stockholm Experience. All pricing programs reviewed during the scan-tour have procedures and relationships in place to share vehicle registry data for operations and enforcement among agencies. Some agencies, such as the new Swedish Transport Agency, operate the priced facility and manage vehicle registration, further streamlining data sharing, billing processes, and associated costs.
- German Experience. In Germany, the revenue generated from the truck tolling program is legally required to be allocated to projects for roads (50 percent), rail (38 percent), and waterways (12 percent). This preserves the majority of the revenue benefit for road users, but helps meet a national goal of multimodal transportation solutions to address mobility and future capacity needs.
- Swedish Experience. In Sweden, the national government has established a long-term 2010–2030 investment plan for infrastructure investment, with the equivalent of US$14.5 billion programmed from a variety of revenue sources, including the Stockholm congestion tax and plans for congestion taxing in Göteborg. The investment plan allocates 53 percent of the funding to road projects and 47 percent to rail projects. The Swedish policy of “advancement” is incorporated in the Road Act to allow municipalities to augment national funding, making more investment possible and creating higher design and operating standards.
- European Union Experience. A European Union directive dictates that the differential between the highest and lowest toll rate cannot be more than two times the lower value. Some European officials claim that this differential is not significant enough to manage traffic effectively in urban areas. The argument is that the limited price differential is insufficient to allow efficiencies to be realized through substantial temporal or mode shifts or avoided road trips. European Union Directives 1999/62/EC and 2006/38/ EC cover vehicle taxes, tolls, and user charges imposed on vehicles intended for the carriage of goods by road and having a maximum permissible gross laden weight of not less than 12 metric tons. The directives establish total revenue thresholds that must not exceed infrastructure costs, which some officials view as limiting for network investment purposes.
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Lesson ID: 2011-00567
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