HOT Lanes
One of the great question marks about proposed new market-priced congestion-relief lanes is the extent to which new-lane construction can be paid for out of toll revenues. (Or the flip side: To what extent will such projects produce surplus revenues that could be used for other purposes such as subsidizing mass transit?)
Two pioneering California projects involving so-called HOT lanes represent the two extremes of this question.
The jargon for the traditional carpool lanes is high occupancy vehicle, or HOV, lanes. HOT stands for high occupancy/toll,car pool lanes that drivers without the qualifying number of passengers can buy their way into. These new hybrid lanes are one of the hottest (pardon the pun) trends in transportation.
By converting already existing HOV lanes on I-15 to a form of HOT lane, the San Diego Association of Governments was able to generate significant surplus revenues, which it is using to subsidize express bus service in the corridor.
By contrast, the 91 Express Lanes in Orange County represented more than $125 million in all-new construction, and while toll revenues are fully supporting the capital and operating costs of the HOT lanes, there is nothing much left over for other purposes.
These are early days in the development of serious urban congestion-relief toll lanes. Transportation planners clearly have a lot to learn about how these projects differ, fundamentally, from conventional toll roads.
For the past 25 years or so, America’s principal strategies for dealing with urban traffic congestion have been expanded mass transit and car pool (HOV) lanes.
Yet the fraction of commuters using either of these modes has been declining, despite all the billions spent developing them. Census Bureau data shows that car-pooling reached a new low of 10.4% in 2003.
And what car-pooling there is, often is done by families that would be traveling together anyway.
Nancy McGuckin and Nandu Srinivasan, using data from the National Household Travel Survey and the National Passenger Transportation Survey, found that in 2001 some 83% of car pools could be classified as so-called “fam pools.”
This is a devastating finding. It means that four out of five of the vehicles to whom we are giving away very costly-to-build space in HOV lanes have not eliminated another car from the road at rush hour.
There are exceptions. HOV corridors in Los Angeles, Houston and the Washington, D.C., suburbs are heavily used by buses, fulfilling the original intent of getting more people to use fewer vehicles to get to work.
But it’s high time we started rethinking this policy, figuring out how to put these lanes to higher and better use.
Robert W. Poole Jr.
Director of Transportation Studies
Reason Foundation
Los Angeles
Propositions
California’s business community and its employees should support Proposition 78 and oppose Proposition 79 for two simple reasons: One creates a new market, delivering less expensive drugs to 5 million of the state’s poor and the other imposes price controls and creates new opportunities for litigation.
These measures represent vastly different approaches to how private industry and government would work together.
Proposition 78 takes a collaborative approach, creating a new market for pharmaceutical manufacturers to work with the state Department of Health Services so that discounted medicines could be made available to about 5 million uninsured California residents whose family incomes are below 300% of the federal poverty level.
Pharmaceutical manufacturers would agree to provide drugs to these individuals at the same low price they sell to large commercial purchasers in California, such as health plans and large companies. Combined with a discount provided by California pharmacies, Proposition 78 would give uninsured, poor people access to prescription drugs at 40% below retail prices.
Because of the voluntary nature of Proposition 78, pharmaceutical manufacturers have registered their commitment to participate in the program. A similar collaborative approach also is under way in the state of Ohio, where every major manufacturer is participating in its drug discount program for uninsured residents.
Proposition 79, by contrast, is a heavy-handed, big government approach that stifles competition and inevitably limits choices for consumers.
Proposition 79 imposes price controls on an innovative and highly competitive industry by locking in a single price for as many as 10 million Californians (the ultimate eligibility number is unknown). This measure also declares open season on companies manufacturing or distributing prescription medicines by allowing lawsuits to be filed by any private citizen against them for “profiteering.”
By freezing the free market forces that make California a leader in cutting-edge medical research and development and by opening up a new front for frivolous lawsuits, Proposition 79 promises to drive up prices for all purchasers of prescription drugs, including employers.
Also, one of Proposition 79’s provisions authorizes the state Department of Health Services to set up a drug-purchasing program to assist small business and labor union healthcare plans, provided employers pay for more than 50% of their employees’ health insurance. Sounds good at first blush. But employers should be wary.
An analysis by the Taylor Feldman Group concluded that employer premiums would likely increase, not decrease, because of startup costs and the havoc that Proposition 79 would wreak on the current prescription drug market in California.
Please join with the state and local chambers of commerce, as well as the agricultural, retail, manufacturing and R & D; communities, in supporting Proposition 78 and opposing Proposition 79.
Jack M. Stewart
President
California Manufacturers & Technology Association
Sacramento
Teacher union lawyer Lance Olson has criticized a pro-Proposition 76 campaign commercial based on California Taxypayers’ Association analysis that funding for schools will increase next year. His criticism is pure fantasy.
By repealing “Test 3” of the school funding law, Proposition 76 guarantees that schools will get at least a $3 billion increase in funding next year. Under existing law, and with budget experts expecting that Test 3 of Proposition 98 will remain in effect, a smaller increase will be provided.
The charges that the measure “cuts” school spending by $3.8 billion is based on the union attorney’s belief that the Legislature in 2006 will raise taxes by $3.8 billion and appropriate $6.8 billion in new money for schools, despite a $7.5 billion structural deficit. This is pure wishful thinking.
And if the Legislature could get a two-thirds vote for a $3.8 billion tax increase, it still cannot fairly be said that Proposition 76 “cuts” school spending. The $3 billion in increased spending would be a smaller increase, but not a cut.
Ron Roach
California Taxpayers’
Association (CalTax)
Sacramento
