The Michigan tolling study, an update

On this week’s Talking Michigan Transportation podcast, a conversation with Kari Martin, MDOT’s University Region planner and project manager on the tolling study requested in 2020 legislation. Also joining the conversation is Eric Morris, Michigan office lead for HNTB, the transportation consultant selected to complete the study. 

Martin and Morris explain the process and why the Legislature is looking at extending the study until the end of this year, as reported in Crain’s Detroit Business last week (subscription). 

Echoing comments from Reason Foundation’s Baruch Feigenbaum on a previous podcast, Martin and Morris talk about how the emergence of electric vehicles (EVs) will further reduce the already inadequate transportation revenue obtained through the motor fuel tax. EVs essentially do not pay for the roads they drive on. 

Advocates observe that by moving to a more sustainable revenue source, everyone pays their fair share and it provides an opportunity to prepare Michigan's interstate and highway system for future smart infrastructure networks. These innovations offer the prospect of a transport infrastructure system that suffers less congestion, is safer, and can be maintained predictively. 

Other relevant links: 

A 2019 Epic-MRA poll of Michigan voter views on tolling.
https://www.michigan.gov/documents/mdot/MDOT_Fees_EpicPoll_669728_7.pdf    

Some things the study will cover, including managed lanes and how they work. https://ops.fhwa.dot.gov/publications/managelanes_primer/   

Why Michigan doesn’t have tolling. Some history.
https://www.michigan.gov/documents/mdot/MDOT_Toll_Roads_Brochure_548788_7.pdf 

Photo: Eric Morris, Michigan office lead for HNTB. Photo courtesy of HNTB.

Transcript

[Music]

Jeff Cranson: Welcome to the Talking Michigan Transportation podcast. I'm Jeff Cranson.

[Music]

Cranson: Once again, welcome to this week's edition of Talking Michigan Transportation. I am pleased to have with me today, Kari Martin, who is a planner in MDOT's University Region and is the MDOT project manager on a legislatively requested—required, I guess, tolling study, and Eric Morris, who is the office leader for HNTB in Michigan. HNTB is a national, even international, transportation consultant and does a lot of work with MDOT and other Michigan road agencies. So, they're both intricately involved in this tolling study, and I’ve asked them on to talk about it, where it stands, and just real high level what it would mean to bring tolling to Michigan after all these years. So, thank you both for being here.

Kari Martin: Thanks for having me.

Cranson: So, let's start, Kari, with you. What's MDOT's role in this, and what are we being asked to do?

Martin: So, in July of 2020, Public Act 140 of 2020 required MDOT to hire a consulting firm to study tolling and what the impacts of tolling might be on Michigan’s roads from both an economic impact as well as just physical impact of the roadway as well, looking at the different federal tolling programs that are available through the USDOT.

Cranson: And, Eric, you've worked with the legislature and your contacts there on this, and there are questions about the legislation. What's HNTB's role in this, and how does it fit into things going on elsewhere in the country?

Eric Morris: Sure. So, once the law was passed, MDOT went through a competitive process where they solicited a request for information from industry to learn more about what was happening nationally in the tolling space. In Michigan, we have toll bridges. We have several toll bridges, but we don't have any toll roads. So, the department reached out nationally and got I think it was, like, 10 or 11 responses to their RFI. And they use that to develop a procurement document, a request for proposals for consultants to deliver this study. So, HNTB was one of the firms that responded and were selected through a qualification based competitive process. So, our role is to conduct and deliver that study for MDOT.

Cranson: And I should mention that the reason I’m talking about this right now is because there was some news last week. Chad Livengood at Crain’s reported on the fact that this study may be extended for a number of different reasons. Do you want to talk about that, Kari, what the reasons were for extending it?

Martin: Yeah, sure, so originally the legislation called for delivery of the feasibility and implementation plan at the end of July of this year. With the pandemic and the changes to traffic, you know, over the time since the legislation was enacted, we thought it best, and also the legislature also thought at best, to regroup a little bit, make sure we're looking at the right traffic because traffic actually equals revenue for tolling. So, we just wanted to take some extra time to make sure that we were providing the correct data and the right information for the legislature to make their decision, so—

Cranson: And we really didn't know, you know, when the train started on this in 2020 that suddenly we were going to be in a pandemic that was initially going to take traffic off the road by as much as 60 percent. That's largely bounced back but not entirely, and it's different patterns in different parts of the state. So, I think it definitely makes sense to try to look at what would be considered a more ordinary time, whatever post-pandemic ordinary means.

Morris: You know, Jeff, what the additional time will allow us to do is to complete our work on the study. We're using 2019 traffic data and projecting it through the pandemic and out the other end of the pandemic for our traffic and revenue purposes. And what the extra time will allow us to do is to compare our assumptions in the study against what's actually happening to confirm that we're within a reasonable tolerance, and we're not way off. And if we are off, it'll give us time to adjust.

Cranson: So, I talked to Baruch Feigenbaum, who is a specialist with the Reason Foundation. The Reason Foundation is a kind of free market advocacy group that is very interested, has done a lot of research, a lot of advocacy for tolling because they are firm believers that roads should be paid with user fees, which is largely what we did in this country for many years, including the building of the interstates. Listen to what he said when I had him on shortly after the legislation passed. This is just kind of the frame the conversation further.

Jeff Cranson: So, how can we kind of revive that user pay mindset that built our interstate system? I mean, that that was kind of understood, you know, that at a time when the gas tax was sustainable and wasn't diminishing returns like it is now, that that's how you pay for roads.

Baruch Feigenbaum: Right, and that's a great question. It's been a hundred years now since Oregon, which was the first state to implement the gas tax, actually implemented a gas tax for transportation purposes. The gas tax has served us very well, it's just as we're having more electric vehicles, as we're having more hybrids, as there's a real difference between the fuel efficiency of certain types of vehicles, like pickup trucks and other types of vehicles, like sub-compacts, the gas tax has become increasingly unreliable but increasingly unfair mechanism.

Cranson: So, I guess I’m wondering from your kind of more national perspective, Eric, and talking to your colleagues around the country, does what he said kind of fit with what you're seeing and hearing?

Morris: Absolutely. The gas tax for many years was a great approximation, or a great approximate mechanism, to assess use of our roadways. So, we collected user fees through the gas tax for a number of years, and it was a good model while it lasted. As we shift towards electric vehicles and hybrid vehicles as, the fuel economy between vehicles becomes wider and wider, it is increasingly not a good metric for collecting those user fees. The fact of the matter is, Jeff, we pay for our transportation system through trips to the gasoline pump. As a country, we are actively discouraging people from making trips the gasoline pump, so we have got to figure out a different system. There are a number of options for doing so, of which tolling is a form of road user charges. And I think that's why the Michigan legislature wanted somebody to evaluate it because it is one of the options out there, and they wanted some data to be able to decide whether that is a good option for Michigan.

Cranson: So, Kari, before you added this to your many duties already, had you studied, looked into tolling much? Did you have much interest in it? I mean, what have you what have you learned along the way? What's surprised you or reinforced maybe some of the things you already believed?

Martin: Well, there have been a couple of different planning level type studies of tolling both from a programmatic standpoint and a project level standpoint probably within the last, like, 15 years at MDOT. I think the thing that I have learned the most is, you know, the nation doesn't rely anymore on toll booths. They rely on all electronic tolling, so it makes it easier to implement something like a toll system than it had in the past. So, that's one of the things that I had learned. Also, there are various toll programs, both mainstream and pilot programs, at the federal level that allow states to toll on their roads, either from brand new reconstruction, adding capacity to a roadway, and improvements to bridges. So, there's different tolling programs at the federal level that allow states to toll, and that's, I think, what makes tolling a potential option. MDOT is not advocating for tolling, but with the declining of the of the gas tax over time, we do need some sort of sustainable funding source.

Cranson: Yeah, I think that it's fair to say that mostly what we're advocating for is a sustainable funding source and something that gives the department and industry some sense of certainty and stability over a period of years for investment. So, talk about the different things that are all related to this and the terms that people hear—HOT lanes, HOV lanes, manage lanes. Why don't you first talk about that, Eric, from what you know, again, from what other states are doing. Then I’ll ask Kari to talk about where that's being explored in Michigan.

Morris: Sure, so when we talk about HOV lanes or HOT lanes or even flex lanes like we have on US-23, they're all different varieties of managed lanes, or managed infrastructure. So, HOV stands for high occupancy vehicle, and typically this is where an owning agency would set aside a lane, or lanes, specifically for high occupancy vehicles. Those can be defined as having at least two people in them. In some really congested areas, like the D.C. area, sometimes they define them as having at least three people in them. So, it's a way to encourage carpooling or reduce the vehicular demand on an asset. A HOT lane, or high occupancy toll lane, is a way for owners to toll excess capacity in those lanes. So, if you had an HOV lane that wasn't completely full and had some extra capacity, you could allow a single occupant, somebody driving in their car by themselves, to also drive in that lane if they were to pay a toll. So, a HOT lane is a form of a price managed lane, and then there's all sorts of directions you can go from there. You can make those lanes priced consistently, meaning it's the same toll to drive in that lane no matter which time of day. You can make them congestion priced, or dynamically priced, which means that the more congested the roadway is the higher the toll would be to drive in that special lane.

Cranson: Yeah, let's talk about some states that do that successfully.

Morris: Yeah, some of the more successful lanes are in the D.C. area. There are also price managed lanes in Minneapolis, Minnesota on 35W, I think it is. Really, the benefit that a user gets out of it is predictability in travel time, that's typically what you're paying for. The general purpose lanes might be stop and go traffic, right? If you don't have to be anywhere by a certain time, it might not be worth it for you to pay to ride in the in the price manage lane. But if you've got an appointment in 15 minutes and that lane will get you there in 13 minutes, it might be worth a dollar or two to pay for that. The key there though with all of these types of lanes, all these types of managed lanes, or price managed lanes, is they generally do not create excess revenue. They basically pay to operate themselves, but they generally do not pay for the capital costs to actually build the lanes. So, as part of this tolling study, we're evaluating price managed lanes, but the other scenario that we're looking at is the toll all lanes scenario. That would generate revenue to actually rebuild our roads and rebuild our bridges that the capital costs that go into those.

Cranson: So, in the at least in the short term, or maybe the transition time, you know, MDOT is looking at perhaps some kind of managed lanes. Could you talk about that a little bit, Kari?

Martin: Yeah, and so that was something that, you know, knowing that the legislature had passed legislation for a full toll option to generate revenue the department was really interested in finding out more about the price managed lanes options for congestion management and improving operations along our along our freeways. Really, it's like a tool, as Eric mentioned, in the toolbox to improve operations for vehicles, but I think it also gives MDOT the option of maybe working with a community that really wants to enhance transit, ride sharing. We are looking at several corridors in the study that do have congestion issues and safety issues, and we really feel that a price managed lane option is definitely something that's worthwhile to look into.

Cranson: Please stay tuned. We'll be back with more talking Michigan transportation right after this.

Narrator: [Car honking] Know before you go. Head on over to Mi Drive to check out the latest on road construction and possible delays along your route. For a detailed map, head over to Michigan.gov/Drive.

Cranson: So, Eric mentioned the US-23, what we call the flex route, between Ann Arbor and Brighton, basically.

Martin: Correct.

Cranson: You were very involved in that, obviously, as a project planner in the University Region. Talk about how your thoughts evolved on that, I guess, from the time it was first conceived and proposed until it was opened and operating and, you know, doing really well, better yet, when it can be extended all the way to 96, obviously, but could you talk about that?

Martin: Sure, yeah. So, we were really interested when we first started looking at the flex route in the limited right-of-way that we had, the limited resources as far as funding goes, so a hard shoulder running option, which is really what that is, it's the use of peak hour shoulder to improve reliability and travel time along US-23, we felt that was a great option with some of those limitations that we had at the time. As you mentioned, we are extending it up to 96. That will be under construction within the next couple of years. We've also looked at that flex route option along 96 in Oakland County as well, so there's definitely a good use for that hard shoulder running concept that is on the flex route. Yeah, I think we're also really excited to find out what other types of managed lane opportunities there are both priced and just unpriced managed lanes as well.

Cranson: Yeah, well, I always hear very good things about the 23-flex route. That's for sure. Eric, what do you say to people, and I know other states have dealt with this too, but there's always a concern that this is not going to be equitable, you know, from a socio-economic standpoint. What kinds of things can you do to make sure that this isn't just something that, you know, only the affluent can afford?

Morris: Yeah, and that's great question, Jeff, and something that our study is keenly aware of. There's a lot of good examples from around the country of programs that have been implemented and how they've evolved over the years. Back in the early 2000s, some express lanes down on I-95 in Miami and, you know, they had subsidized transit service that was provided. Then kind of about 10 years later it evolved into an equity discount program that was being involved, or offered, in Hampton Roads, Virginia to where if you made less than a certain amount of income you might qualify for free tolls or discounted tolls. An analogous program in Michigan could be, you know, if you qualify for the Bridge Card then you could qualify for some toll relief. Then just recently in the Bay area out in California with some express lanes, they had a really robust stakeholder engagement and worked with community organizations to design programs that really tailored the benefits to what the community needed. It was sort of a choice between toll relief or transit subsidization, and there are even discussions in other areas about using some of the toll revenues to invest in the community and help the communities in which these roads are going through. The broader we can look at transportation and the transportation system, the more creative and impactful that we can get with those types of programs. But it starts with really robust community engagement, understanding what the impacts of the community potentially would be, and what their desires are for their community. Then we're seeing a lot of creativity in the industry of designing those programs and tailoring those programs to exactly what those communities need.

Cranson: Yeah, that's really well said. So, Kari, what do you hear, and it's not scientific, obviously, but when you tell people friends and family that you're working on this what kinds of things do you hear anecdotally?

Martin: You know, I think there are there are several people that they go on vacations down south or they go out of state, and they know the toll roads, they have the passes in their cars, so they feel like it's a no-brainer. There are people who are concerned about, you know, us being a tourist state, and that toll roads might have an effect on the tourism in the state. But we've had a lot of meetings and different stakeholder engagement to kind of just, you know, talk through some of these issues, and we're getting really good feedback about the option of a tolled revenue source here in Michigan. So, I do get pretty good feedback from people, so—

Cranson: I’m a little skeptical that somebody makes a decision to go to Chicago or Cedar Point based on the fact that they have to pay tolls.

Martin: And that's correct. Yeah, that's I agree with that.

Cranson: Well, thank you both. This is good. I think this is a conversation we're going to continue. And between now and the end of the year we're going to try to keep up to speed on the developments, but I appreciate you both taking time to do this.

Morris: Thank you very much.

Martin: Yeah, thank you very much.

[Music]

Cranson: Thank you again for listening to this week's edition of the Talking Michigan Transportation podcast. I would like to thank Randy Debler and Corey Petee for engineering this week's podcast. To subscribe to show notes and more, go to Apple podcasts and search for Talking Michigan Transportation.

[Music]