Express Lanes as Precursors to Ubiquitous Road Pricing

I-95 Express Lanes simulation

by James A. Bacon

After years of anticipation, 95 Express Lanes opened its Interstate 95 HOT lane system to the public Sunday. Drivers get to use the lanes for free outside of rush hour, when the lanes remain restricted to high-occupancy vehicles (HOVs). Tolls will go into effect around the end of the month.

The nearly $1 billion project converts existing HOV lanes along I-95 into tolled HOT lanes while letting HOVs continue to drive for free, and extends the lanes to Stafford County. While the project won’t do much to shorten the commute for most commuters, it will give them an option when they place a high value on their time, said Matthew Click, vice president-national director of price-managed lanes for HNTB, an engineering firm that worked with 95 Express Lanes on the project.

“We expect most people to use them sometimes, when they really need to get somewhere and they need to get there now,” said Click in an interview with Bacon’s Rebellion. Click took issue with the description of HOT lanes as “Lexus” lanes. Tolled lanes provide a valuable option for less affluent drivers, he said. Someone making $25,000 a year could use the express lanes to pick up their kid at day care to avoid the $10-per-minute late charges. Plumbers might use the lanes to squeeze in an extra call, or taxi drivers an extra fare.

That was the predictable part of the interview, entirely in line with the business case for building HOT lanes. I have written extensively on this blog in support of HOT lanes. They come as close to a “win win” arrangement politically as it’s possible to devise in the transportation realm. They conform to the principle of “user pays,” they use market mechanisms to ration scarce capacity, and no one has to use them if they don’t want to.

Traffic forecasts. The conversation got much more interesting when we veered into the topic of demand for the HOT lanes. Will the volume of traffic on the Beltway and I-95, both of which are public-private partnerships, generate sufficient revenue to pay the back the billion-dollar investments?

The revenue forecasts for express lane projects are “very sensitive” to demand, Click said. “In an express lane situation, the competition is three feet away in the general-purpose non-tolled lane,” he said. The worse the level of service in the general lanes, the greater the traffic — and revenue — in the tolled lanes. An increase in demand for the tolled lanes does two things. It increases the number of cars being tolled, and it increases the toll rates, which are dynamically priced according to demand.

Click conceded that 495 traffic volumes are lower than forecast. “You’re seeing some initial birthing pains getting up and running,” he said. “It’s taking a little longer for volumes to ramp up during peak hours. … We’re seeing the impact of the recession of 2008., the greatest downturn in the economy since the Depression.” As the economy recovers, he said, he expects traffic demand to increase. The public-private partnership has a 75-year time horizon. “It’s warranted to give a couple or few years” for traffic volumes to recover.

But there are risks over the mid- to long-term as well, Click acknowledged. Demographic pressures may dampen Vehicle Miles Driven (VMT) overall and demand for HOT lanes specifically. Members of the Millennial Generation tend to drive less than predecessor generations. The population is aging, and the elderly don’t drive as much. Also, technology and the sharing economy are scrambling long-term demand forecasts.

“Imagine a future when people don’t own a car,” Click said. “I’ve got my mobile phone. I walk up to a subscription car, and it recognizes me. The car starts driving. I see my buddy Tim two blocks over. I pick him up. He bumps his phone to mine, and we split the fare. … Destructive creativity is really coming. It’s real.” And it means that VMT will not grow in the same linear relationship with population and the economy as in the past. “I see a future where [demand] is flat.”

Transformative technology. Click sees express lanes as the “precursor” of a world in 25 years “in which all lanes are priced.” The main barrier to such a future is not technology, it’s political will, he said. “The American public has a 50-year relationship with the fuel tax and the federal Interstate program. Peoples’ reaction to tolls is, ‘I’ve already paid.’ But I say, once you’ve paid off the mortgage on your house, you still have to fix the roof. You have to maintain the roads.” As fuel taxes decline and infrastructure degrades, express lanes will look better and better.

“We will fondly look back on express lanes as the first step toward the new transportation paradigm,” Click said. Charging drivers for usage of all roads on the basis of dynamic pricing will be the greatest driver of urban transformation since the invention of the elevator. “The next generation will change everything.”

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41 responses to “Express Lanes as Precursors to Ubiquitous Road Pricing”

  1. Click is totally on track with the realities.. in my view. He knows that HOT lines are not the whole future – just a part of it.

    roads never were are not now “free” – it’s myth and the reality is building another road like I-95 from gas taxes alone – is a 20th century concept disappearing rapidly in the rear view mirror.

    to me – the really big thing that tolls and dynamic pricing are demonstrating is what Click knows – that there IS a value to time and mobility – AND there ARE choices that people will make if a real cost becomes part of the mobility part of the equation.

    he gave the example of a plumber – but the cell phone is also a major part of the equation. In years past – the plumbing company would say – “we can’t get there til next week because all our trucks are out and booked for the next two days. Now – “radio dispatch” means sending a text not just one of the trucks but all of them – asking if any of them have finished a job early and can fit in one more… in days of old – even “radio dispatch” this would have been a painful process. The plumber calls the lady back and tells her they can come but there will be an additional fee to cover the extra-duty call but if the toilet is kaflooey – it’s not a problem!

    but the i-95 HOT lanes are not total nirvana because if the plumbing is in the opposite direction of the HOT flow – it’s no help.

    The funny thing is that folks like Don know that last minute air reservations cost plenty – but last minute travel on the beltway – it’s “unfair”.

  2. Last minute air reservations cost more for all air travelers. Last minute decisions to use roads cost more only in NoVa.

    The sooner we get to ubiquitous tolling the better.

    We’ll see how you clever boys like getting “dinged” for $2.50 per trip every time you go anywhere.

    And Click is right – this has nothing to do with technology. It’s all about political will.

  3. last minute air reservations DO depend on WHERE – as well as when but again in dense urban areas you will see MORE dynamic pricing of many things beyond just roads whereas in rural and suburban areas demand is different but in terms of being “dinged” you should ask the folks from the Fredericksburg Area that commute to jobs in NoVa how THEY feel about dynamic tolls and I can make it easy for you – they don’t like them any better to you but the reality is a solo trip at the height of rush hour is not “free” …

    but the dynamic tolling is really part of a much bigger issue – which is why is corporate America doing so well why wage-earning America is not and the conventional wisdom among the ignorati is that it’s Obama’s fault but the real answer is between the internet and the cell phone – employers can get work done without hiring people that need/want benefits and the government wants FICA and ObamaCare if they don’t offer health care.

    I almost wish the GOP would take Congress and the POTUS so the American people can see just what hypocrites they are on everything from immigration to healthcare to government spending to entitlements and the military.

    we got a good whiff of it at the recent 1.1 T CR.

    and here’s another sound bite for those so inclined to gain their knowledge that way – Our tax-expenditures – the tax deductions that all of us benefit from – from employer-provided health care to mortage interest – they total up to be TWICE the current deficit. In other words, if we were not so busy giving tax breaks to everyone – we’d be in surplus – buying down the debt.

    I’m waiting for the GOP to give tax breaks to those who have to pay dynamic tolls – anyone want to take the bet that it’s the GOP who will propose it?


    1. NoVaShenandoah Avatar

      A friendly reminder: The GOP had Congress and the Presidency, and the economy collapsed. By the time they were done the banks were not lending any more. It took full replacement of the Republicans, and needed not one single Republican vote.

      BTW: So far in 2014 there have been more jobs created than in all of Bush’s 8 years!

      So, Be Careful What You Wish For.

      1. re: ” more jobs” .. yes but they are CRAP jobs and it’s Obama’s fault.. what more do you not understand?

        😉 Ask DonR.. he’ll tell you – fearless leader is a feckless community organizer who does not have a clue how to run the economy – and heckfire, besides that – he is the POTUS who has been in charge of more debt than any other POTUS in history. What more do you possibly need to know?

  4. Obviously, Mr. Bacon, you didn’t ask him “Why every single traffic projection over-estimates the actual traffic and most by double or more the actual traffic?”

    Obviously, you didn’t ask him why Transurban, the prime owner of 95 Express Lanes, bid on and won the 95 project when it’s Capital Beltway Express was generating only 20 percent of toll income projections and its other VA project, Pocahontas Parkway, was in bankruptcy.

    Obviously, you didn’t ask him why “private activity bond” buyers get better than junk bond rates (13-15 percent return) when the bonds are backed by VA and Uncle Sam?

    Obviously, you didn’t ask him how much ACTUAL cash the “privates” put up which wasn’t a private activity bond or a federal/state loan.

    Obviously, you didn’t ask him what happens when, usually within 15 years of that 75 year contract, virtually every P3 goes bankrupt.

    Yes, on the surface, I agree, toll roads have great potential to make us think about the true cost of our driving. But the way they are presently being built in Virginia should terrify taxpayers. Do we really think international financiers (and almost every single P3 financial bidder comes from overseas) is taking all this risk and spending all this (alleged) money out of the goodness of their hearts to help the poor American driver pick up his/her daughter from day care without paying a late fee?

    For you true believers out there: There’s a bridge in Brooklyn for sale…

    1. Salz, I didn’t ask Click those questions because as an employee of HNTB, he was not authorized to speak for Transurban, and his expertise is dynamic-pricing tolls, not the structuring of public-private partnerships.

      What I did get from him is (1) the concession that the market demand for HOT lanes ten years out is unlikely to follow the straight-line forecasts of the 2000s, and (2) that revenue forecasts are highly sensitive to changes in traffic volume. I think that is a material contribution to the discussion.

      The logical questions to ask are what are the chances that Transurban might default on loans for either project, and, if it does, what exposure is there for the commonwealth of Virginia? Unfortunately, as I believe you told me, the contracts are not a matter of public record.

      1. the tendency is to conflate P3 with tolls make them bad brothers of each other.

        I think they are different and not necessarily related.

        folks who don’t like tolls – and I admit there are a good number – need to base their objections of merit in my view although it was touched on – “raise the taxes” but the political reality is that – that’s not going to happen unless people demand it instead of tolls and I just don’t see that as a reality but who knows?

        people want – what they want -and they really don’t want to pay for it. Their view, often expressed at local hearings that I watch is this: ” we pay our taxes – now give us our stuff”.

        part of it is the fault of the way we do transportation – as hardly anyone can cite chapter and verse of where the funding comes from – much less where it is spent – not only on new projects but operations and maintenance.

        so my parting question is this – what would have happened to I-95 if we had not done HOT Lanes – P3 or not? what was going to happen without Tolls?

        bonus question – do you think the CBBT would exist today had we not built it as a toll facility?

        is that an example of building a road without public input – which had they got it would have resulted in it never being built?

  5. NoVaShenandoah Avatar

    I on occasion drive on I-495, and have checked on the toll lanes (that I don’t use). A few observations:

    1. I have not seen any commercial traffic, other than Metro buses, in the toll lanes. That’s how much weight I put on the argument that a plumber may use them to get in one more job;

    2. Traffic on them is low. Traffic on the normal lanes is also lower than when the toll lanes were being built. I believe that traffic would improve if they were open to all cars;

    3. I have seen tolls range from $2.55 to $9.85 to go from Tyson’s to I-95. I stopped using the Greenway when tolls got past $4. It’s just too expensive to pay that much, each way every day.

    In short, I don’t like the toll roads. They are a way for our leadership to avoid facing up to the responsibilities they have. Oh, I DO pay for what i use by buying the gas and he taxes included in that. If necessary, RAISE THE TAXES!

    1. think CBBT – for tolls.. tell me all the bad things about the CBBT.

      in terms of “leadership” and raising taxes – you boys must have been out back int the line for the outhouse when McDonnell raised the gas taxes and had the pitchfork and torch crowd after his hide.

      the cruel reality is that as bad as folks hate tolls – they hate increased gas taxes worse.

      in the words of POGO – we have met the enemy – and we are like the proverbial kid who is asked to choose from no good choices and he refuses to choose. What do leaders do then?

    2. TooManyTaxes Avatar

      FYI – large trucks are prohibited from using the Beltway Express Lanes. “Mid-sized trucks such as local delivery trucks may use the lanes as a toll paying customer or carpool. Trucks with more than two axles, including large, 18-wheel trucks are not allowed to access the lanes. Buses are not limited to two axles; any size bus may use the Express Lanes.”

      1. NoVaShenandoah Avatar

        I’m not the one who argues that commercial trucks can use the toll lanes to make one last call.

  6. re: what happens when a P3 goes bankrupt –

    can we have some examples?

    do they shut down the road and/or stop charging tolls?


    1. Virginia P3 Office Avatar
      Virginia P3 Office

      An example would be 895 Pocahontas Parkway. The private sector party, after restructuring their debts and other normal business practices when an investment is loosing ground, did declare to their lenders the Parkway was valued at $0. This potential situation was covered in the Comprehensive Agreement.

      The situation required the lenders to find qualified companies to Operate and Maintain the facility. VDOT’s sole responsibility was to determine that these firms were indeed qualified and acceptable to VDOT.

      The end story is a facility that continues to operate, with no change visible to the traveling public. And no additional costs to the Commonwealth.

      1. re: ” The situation required the lenders to find qualified companies to Operate and Maintain the facility. VDOT’s sole responsibility was to determine that these firms were indeed qualified and acceptable to VDOT.”

        and to continue to collect tolls – and where do they go now?

        do they cover the costs of maintaining and operating the facility even if they can’t generate excess tolls for investors ?

        do the tolls even cover the O&M and debt service?

        who decides this – VDOT ? Why would ANY private entity enter into an agreement to run the facility unless all of it’s costs were covered with enough left over to make it a viable business proposition for them as a company even if not enough for investors?

        1. Virginia P3 Office Avatar
          Virginia P3 Office


          I don’t know the specific answers to your questions so let me check with our Deputy Director who was the primary contact when 895 lost it’s private sector partner. I’ll let you know when I have the answers, which will be after Christmas.

          1. thanks.. and have good Holidays!

  7. pushing our way through the thickets here – I emerge with this ..

    regardless of the financing mechanism- or a plethora of other issues – here’s my question –

    why does private industry almost always build the stuff much, much faster than VDOT?

    one of the biggest flaws with VDOT – is, in fact, the 6year plan where they try to develop a project – over a far longer period of time than the private sector does – and VDOT not infrequently faceplants into the inflation impacts of projects that take longer to build … it seems like every few years – they have to wipe out part of the 6yr projects because – in essence – they’ve taken too long to go through the design/build phase – and inflation start eating away at it’s financials..

    for better or worse – Transurban – simultaneously rebuilt a slew of overpasses and interchanges as well as added new lanes in what time span ?

    quick.. lightening quick compared to what would have happened with VDOT doing it.

    so on that basis alone – I’d want private industry running the show – and yes – getting their money back out of it … worse things could happen – like VDOT fidding and farting around for 7 years then coming back and having to change the original costs… and whatever else machinations and maladies that seem to plague many of VDOT’s projects.

  8. I’m enthusiastic about tolled roads. The big argument against them (back when I was a lad, and dinos roamed the earth) was that drivers wasted a LOT of time stuck in lines, and the toll takers had to be paid. Now, with EZPass, those problems are gone! Here in Arlington, I’d like to see the congested streets tolled, to encourage those who can shift their errands to non-commute times to do so, and to reward people who can find car poolers and cut the toll-per-person.

  9. I keep an EZ-pass and agree with Dave – I don’t mind the tolls even if they were on surface streets especially if it resulted in less congestion.

    I always “stack” my errands anyhow.. if I can kill 3 trips with one trip – I will and I’ll even line the errands up so I’m not backtracking between then if Ican.

    Even then, not to say I never take trips I really do not need to and even a buck or two may not totally dissuade me but what WOULD change is in I had a choice between paying $3 or $1 for the same trip… I’d think about that.

    but if I’m going to take a trip north on I-95 – paying the toll will be a no-brainer because it will not have 18-wheelers nor the idiot scofflaws that just walk all over other drivers.. on the mainline some days. Then we have the folks that sit in the left lane and force traffic to start coming around them on the right -and the mayhem that results from that – pretty sure those folks won’t like tolls either.. so the tolls will buy one a less stressful, less irritating trip as well as a less congested, more reliable trip.

    and let the folks who like to make burdens of themselves to others – all flock together to enjoy each others antics and others have options.. for a little extra money.

    I’d like to see toll lanes all the way from DC to Richmond – truth be known – pretty sure the more irritating and annoying won’t want to pay tolls there either…so it’s sorta like a natural symmetry… 😉

  10. I don’t know that we’ll ever see surface streets tolled even with EZ-Pass .. the default would be license-plate – but in any case a couple of things would probably be true:

    1. – that the surface street would NOT be a PPTA arrangement – It would be VDOT or in the case of a city or town – them.

    2. -I think – in general – if we’re going to go to a more direct method of paying for road use – the transponder or even the license plate reader is going to win out over some GPS gizmo in the car that the govt will “read”.

    cars will start coming – “transponder-ready” and drivers will have the ability to disable/not use it as well as get an indicator light when it is receiving signals from a tolling gantry – and may well come in a smartphone version.

    3. – managing congestion via tolling – i.e. making it expensive to go to zones where congestion varies and becomes unacceptable at certain times of the day. it will then become a place people will avoid if at all possible at those times it’s expensive.

    4. – at some point -we may see credits/toll discounts and we may see integration with GPS units that show the “cheapest” way to get from A to B as well as the fastest – mostly costly way.

    5. – P3 may go away for anything but mega projects that neither VDOT nor the State have the financial capacity nor the inclination even if they do – to go into a level of debt that reduces the state’s ability to access credit for other things.

    6. Once tolling methodology and technology get to the point they are available plug and play COTS – , VDOT will start using it the same way they now use traffic signals and ITS signs and messaging.. is perhaps with contractors…directly answering to VDOT on day-to-day rather than a separate P3 private entity…

    7. The public will continue to first blame VDOT then a private entity – then VDOT and so forth and so on.. never finding a public or private entity they want to be in charge… and leaders left with no real guidance from the public about which bad choice they support – will continue to decide even when the public cannot or will not.

  11. Virginia P3 Office Avatar
    Virginia P3 Office

    The Virginia Office of Public-Private Partnerships always appreciates the diligence of Jim Bacon’s articles and while we may not always see entirely eye-to-eye, we do look forward to the articles and the comments posted.

    We did want to correct any misunderstandings about the availability of the 95 or 495 Express Lanes contractual documents (Comprehensive Agreements) being available for public review.

    Both projects Comprehensive Agreements are, and have been since they were executed, available on the web at: Search for “Comprehensive Agreement” and you’ll see the PDF of the actual contract, as well as the Exhibits that accompany them.

    If anyone has trouble finding these, please let me know at Thanks and we hope this information is helpful.

    1. Jackie, Thanks for the correction and links to the documents!

      1. would it be churlish to ask after the 460 docs?

        1. Virginia P3 Office Avatar
          Virginia P3 Office


          Not at all churlish… we strongly believe that every document possible should be posted and available to stakeholders.

          Go to: and under “Archives” you will find the Comprehensive Agreement for Route 460 Corridor Improvements.

          1. thank you! ……………..

          2. virginia P3 office – would you be willing to try to explain the issue of the USACE permit relative to the P3 agreement?

            at 700+ pages long -and quite a few instances of the phrase “USACE permit” – it does not appear that is was overlooked in it’s importance and while many other things in the Comprehensive Agreement are worded as contingencies that have to be resolved – apparently the USACE permit was not.

            was this a “learning” issue or some other thing?

            thanks for consideration of the question – respectfully.


          3. Virginia P3 Office Avatar
            Virginia P3 Office

            The necessity of obtaining the USACE permit before construction was not overlooked during development of Route 460 project or the Comprehensive Agreement.

            Nor did the USACE overlook the importance of the permit to advancing the project.

            At present, VDOT and the USACE are working through the regulatory issues related to permitting.

          4. Okay – and you know this question is hanging – why was the permit not made a requirement of being in hand before payments to the principles began?

            In other words – most of the PP3 negotiations and terms required approvals in hand before going forward… with the agreement.. and in this case – at least in the press and conventional wisdom – the claim is being made that payment has to be made even if we don’t have the permit – never get it…

            I’m thinking there must be a misunderstanding of sorts because most of the other PPTA agreements have been meticulously careful…

            your willingness to respond and your candor is duly noted.. and refreshing- as well as appreciated.

  12. Virginia P3 Office Avatar
    Virginia P3 Office

    While I was not party to the details regarding the timing of USACE permits and payments to our private sector partners, I can clarify that typically the Commonwealth does not have water quality permit in hand when we sign Comprehensive Agreements.

    Permits are a risk and responsibility usually best handled by the private partners while they are designing. This allows the designer, contractors, and regulators to reach agreement on the least environmentally damaging means of moving forward. Payments are associated with the above work as it happens after execution of the CA.

    This was the case on Route 58, Route 28, I-495, Express Lanes, Midtown Tunnel, and I-95 Express Lanes.

    1. Thank You.

      ” Permits are a risk and responsibility usually best handled by the private partners while they are designing.”

      I did not know this. I assumed that all interactions with other Federal and State agencies were coordinated through – and the responsibility of VDOT in part because I thought VDOT would handle the eminent domain takings also.

      so I learned something and I thank you for that.

  13. Virginia P3 Office Avatar
    Virginia P3 Office

    It depends on the regulation, the agency, and the intensity of possible impacts on the environment. For example, VDOT does not usually take the complete responsibility for hazardous materials on P3 projects. Instead we’ll share the responsibility with our private sector partners. VDOT will investigate areas suspected of being areas of hazarous materials, test them, and delineate the extent/depth of the area. Then the private sector can either avoid or minimize impacts to these areas during design. These are “know areas of hazardous materials” which are treated differently in the Comprehensive Agreement; other areas of previous “undiscovered hazardous materials” and these are shared risks between VDOT and the private sector.

    Conversely, VDOT and our office will be responsible for working directly with Federal Highway Administration and include their directions, technical requirements, and other contractual obligations in the Comprehensive Agreements.

    1. to clarify – wetland permits and similar Govt agency permits in a PPTA agreement are _usually_ handled by the private entity working directly with the Federal/Stater permit authority – NOT the Govt entity handling the PPTA arrangement?

      Once you answer that – with my thanks – I would further comment that the average Virginian, perhaps most all Virginians without direct experience with PPTAs don’t understand how they are designed and function – AND in my experience tend to believe they are NOT in the best interests of Virginians because they think that the infrastructure is being turned over to a company to make a profit on rather than remain a “free road” paid for with their fuel taxes.

      and I assume your motive in responding not anonymously is to further inform folks a good thing.

      I would hope that you continue to weigh in and clarify and in fact, perhaps Mr. Bacon will let you guest write some articles explaining more about PPTA and the future of PPTA in the Commonwealth – and perhaps allude to some future plans and perhaps some that are not pure surface transportation.

      Finally – what kind of expertise do you require on staff? What kinds of professionals? Are they legal and financial experts – as opposed to engineers?

      are you funded by the state or do you get a project fee?

      1. Virginia P3 Office Avatar
        Virginia P3 Office

        When our office and an agency (e.g. VDOT, VDRPT, etc.) start development activities to help shape the potential P3 procurement of a P3 project, we identify all the possible “risks” associated with a project. Risks can be environmental compliance, permit acquisition, hazardous materials, Right-of-Way, complex design issues, etc.

        A team of various technical experts and VAP3 will identify the risks (e.g. water quality permits, geological investigations, hazardous materials, etc.) and determine which party (public agency or private sector) is best able to manage the risk.

        The party may be the public agency (geological investigations) or the private sector (water quality permits), or a both for a “shared risk” best handled by both parties (hazardous materials).

        As far as enhancing the public and elected officials understanding of P3’s, I completely agree with you that, in the past, we have not be as proactive in getting more information on the P3 process out. We have committed, as has this Administration, to getting more information to our Stakeholders.

        And to address your question about the VAP3 staff: the office is comprised of 7 Program Managers, Deputy Director, and Director. These 9 individuals come with various technical expertise including financial, construction, operations and maintenance, environmental regulatory compliance, communication, new business development, transportation planning, roadway design and project scheduling. Most individuals have Masters degrees and one a PhD. We also have a variety of consultant expertise available, including expertise financial advice and legal counsel.

        And we are employees of the Commonwealth of Virginia. There are not bonuses associated with staff successfully closing a P3 project.

        Hope this helps.

        1. well – I am truly tickled that ya’ll are willing to venture out into the public realm to discuss P3 issues – and I do thank you and I congratulate you for doing so – a refreshing change from the status quo for many governmental groups.

          Do you have wall street/financial specialists on your staff – perhaps somewhat equivalent to what VRS might have on their staff when looking at how the private sector investment world works?

          and yes.. ya’ll would deserve bonuses if we could figure out the metrics.. and I’d be opposed to punishment for shortfalls.. which would in my view – effectively turn you into yet another risk-adverse govt agency.

          Having said that – the public “remembers” the failures more than they applaud the successes.. as I’m sure you are aware!

          one point – many folks I know – go to the mega projects and try to find the Comprehensive Agreements and they’re not obvious.. where they are and sometimes vary by project…

          they also read like legalese and could stand to have an executive summary “common man” treatment – that itself is referenced to the relevant pages in the full doc.

          Up our way – we’ve had endless dialogue about what exactly the 24% threshold means or not with regard to free ridership on the I-95 HOT lanes – and it never really gets resolved.. and so wrong information gets propagated and not to anyone’s advantage…

          1. Virginia P3 Office Avatar
            Virginia P3 Office

            Many thanks for helping me understand what the public wants to know more on. If you would be willing to collaborate with others, we’d really appreciate a list of questions, P3 project specific and P3 program specific, to begin addressing on our soon to be released new website.

            My email is and again, thanks for your assistance with this important effort.

  14. policyanalyst Avatar

    I think the title of the post is a little misleading because there are a number of important caveats to the express lanes that make it fall well short of a market-driven approach:

    1. The express lanes are a hybrid of the old system and a new approach. The old HOV system continues because motorists with two or more passengers can get into the express lanes and use them without paying the toll.

    The more significant change is that solo motorists or those driving with one passenger can now pay a toll to access the express lanes during rush hour. Since the old HOV-3 system never permitted cars with two or fewer passengers during rush hour, this does provide more flexibility to drivers who cannot carpool. However, the downside is that those drivers lose the access they used to have during off peak times and on the weekends. All drivers will now to have to pay a toll or meet the HOV-3 requirement at all times.

    2. One implication of the first point is that the costs will be very unevenly distributed across different groups of motorists. Drivers with two or fewer passengers will in effect pay for both themselves and then will pay for the carpoolers and bus riders. So the tolls will be very expensive because only a minority of drivers will be making any direct contribution to the project’s cost.

    3. The role of the Commonwealth and federal government in financing part of the project is opaque. We know from a Congressional Budget Office report that the vast majority of funding came from public sources ( 643 out of the $923 million came from public sources according to CBO. But Virginia’s leaders have never clearly articulated what the substantial public contribution was supposed to pay for. Maintaining free access for carpoolers? Providing the funding that was necessary to get the project off the ground? So Virginians in other regions of the state and taxpayers in other states will be paying for the majority of this project, which further diminishes the link between those paying for the project and those benefiting from it.

    4. Also one smaller point is that the investors in the express lanes will likely handsomely benefit from VDOT’s frequent closures of mainline lanes for maintenance and repairs. Drivers during the middle of the day and at night frequently encounter lane closures on 95. Under the old system, any driver during off peak times could get into the HOV lanes if they were open. But now everyone, except HOV-3, will have to pay a toll. So the investors will benefit from VDOT’s decision to close lanes. I’m not suggesting that VDOT is intentionally going to close lanes to benefit investors, but it’s another example of how changing one policy has unintended effects elsewhere. And as this blog has documented well, Virginia’s leadership has not been very nimble in keeping up with changing times.

    1. I think these are precise and fair comments especially the part about mainline use of HOV outside of HOV hours – going away.

      but the part about the Federal dollars is not so clearcut as Federal dollars were going to be used for any improvements to I-95 ( as well as METRO and VRE) – anyhow. The question is how much and what would we get for that much.

      So one issue is what is the most infrastructure we could have gotten for the least tax dollars… Could we have gotten what we got as a non-private VDOT-operated road with the same dollars?

      Perhaps a more overriding issue is looking at I-95 longer term – what could be done to accommodate the expected increase in commuting traffic from the southern exurbs?

      The last available right-of-way was going to be used and then after that – no more – not without buying developed land at commercial prices and taking it off the tax rolls.

      so what was a better solution than the one they chose?

      essentially what they chose – was not tolls by a private company but to use dynamic tolling to manage congestion especially at rush hour.

      by and large the complaints are not really focused on one thing – they’re diverse and range from not liking the idea of a private concessionaire to how HOV changed to other issues.

      Few of the complaints have offered much in the way of viable alternatives as the most common one is for VDOT to find more money to build more lanes – completely ignoring the two realities – that drove decisions to dynamic tolling.

      The second most common is that if there have to be tolls that they should be done by VDOT not a profit-making entity. This at the same time that VDOT is castigated as being a bloated, wasteful and incompetent organization – incapable of operating tolls roads like Pocahontas and Dulles. And of course that VDOT simply is not getting enough in fuel taxes to do anything any more other than maintenance and operations and most all construction money is coming from the Feds – who are not spending twice as many tax dollars as the Federal gas tax is generating – and changes are coming – that may include cutting the Federal outlays in half and to be no more than what the Fed gas tax is generating…

      One of my frustrations with transportation ( as well as education and health care) – is the fact that most folks simply do not know the basic facts and they believe things that are not the facts…and from that they develop opinions.

      Not accusing policyanalyst of this .. I’ll admit to my own lack of complete knowledge – but I have learned more over the last few years than I knew before.

      Let me give an example. If you asked a 100 of the most vociferous critics of HOT lanes – the specifics of transportation funding in Virginia – i.e. how much and from what sources – chances are you’d be lucky to have one that knows the facts. The 99 are expressing frustration and anger – about changes they do not like – but it’s not based on facts and reality – just perceptions – and even myths.

      So if you are a public official who has to make tough decisions about how to do transportation – the public is NOT your friend. The public is out to string you up no matter what you do – unless you can figure out how to maintain the status quo!

      Okay – so tell me where I’ve got the above wrong… show me what we should be doing instead…

  15. errata:

    ” And of course that VDOT simply is not getting enough in fuel taxes to do anything any more other than maintenance and operations and most all construction money is coming from the Feds – who are NOW spending twice as many tax dollars as the Federal gas tax is generating – and changes are coming – that may include cutting the Federal outlays in half and to be no more than what the Fed gas tax is generating…

    to add to the above:

    this is the 600 lb gorilla that the public is largely not aware of –

    The Feds are currently spending TWICE as much money for transportation than the gas tax is generating. They are doing this by adding 30 billion additional dollars from general tax revenues – i.e. your income taxes.

    The Conservatives in Congress along with some Dems want to not spend more on transportation than the Federal Gas tax is generating and to let the states figure out how to make up the 30 billion drop in Federal funding – which is almost surely going to cut Federal money for highway construction – and possibly funding for things like METRO and VRE and other local transit systems.

    What the public, so far, is apparently incapable of recognizing is that both State and Federal gas tax revenues are dropping because of efficiencies in new cars – that continue apace.

    The second reality is that VMT (total vehicles miles travelled) is dropping – (overall but not in places like NoVA exurb commting) – the exact opposite that economists would predict when driving gets cheaper.

    So the bottom line is that there are less and less revenues from the fuel tax.

    The Feds are supplementing it with general revenues and Virginia is doing the same thing by increasing the percent of sales taxes that are going to VDOT for transportation.

    In this context – WHERE is the funding for new highways and/or significantly expanded existing highways going to come from?

    and the answer is – if you can’t increase gas taxes because the public – and Conservatives are opposed to it – then where else? And the answer is simple – tolls and in places where more right-of-way is just prohibitively too expensive – dynamic tolls… to manage congestion…

    I see these things as – understandable realities in the face of few other likely alternatives.

    it’s not that I’m opposed to other alternatives – it’s that I feel the default option of doing nothing – is unacceptable but I will totally agree that it’s possible for the driving public to be not only opposed to increased gas taxes but also opposed to tolls – and we gridlock – literally.

    How many people – if they really know the facts – would WILLINGLY and with full knowledge and agreement – choose the gridlock path?

    My view is that too many don’t know the facts and realities and their opinions are driven by beliefs and biases and other things that are not facts.

    so again, I ask – what part of this am I wrong on… ????

    1. policyanalyst Avatar

      Your point about general revenue being used to make up for falling gas tax revenue dovetails with my earlier point about the costs being unevenly distributed. What is happening is that the link between who benefits from a project and who pays is becoming less clear.

      1. yup. but the way it breaks out is that general revenues and the sales tax in Va “sort of” go to pay for rail and transit – not by legislative design but just how things have got allocated over the years.

        At the Federal level – if they cut back to just what the gas tax generates – there is sentiment on the conservative side to dump the rail/transit and direct the gas tax only revenues back to roads only.

        In Virginia, about 1/3 of the state money comes from the sales tax – about 900 million worth.

        I didn’t know if you have seen this but it lays out the sources of revenues for transportation in Virginia:

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