MTC Tolling Study an Important Step Forward, But Equity Concerns Remain
The Bay Area has two problems with the same solution: highway congestion and the climate crisis. Both require us to drive less and use other transportation modes more. However, incentivizing people to choose other modes can be a challenge.
In 2022, the Metropolitan Transportation Commission (MTC) launched the Next Generation Bay Area Freeways Study with the goals of “analyzing the feasibility, costs, benefits, and public support for tolling certain Bay Area freeways as a strategy for delivering reliably high-speed travel and reducing greenhouse gas emissions caused by passenger vehicles.” In September and October 2024, MTC briefed and solicited feedback from Transform staff on the options it’s studying.
What is tolling?
Toll roads are not a new concept. In other parts of the country, you can find many highways where drivers must pay a fee on entering or exiting. This may be a flat fee or based on the distance traveled.
Studies have found that introducing tolls can reduce greenhouse gas (GHG) emissions. Tolls on highway travel have the added benefit of reducing congestion, making travel faster for those who still need to drive. In fact, tolling is a better long-term solution for congestion than adding highway lanes. New lanes, even HOV or tolled lanes, lead to more driving, more greenhouse gases, and — within five to 10 years — more congestion.
Getting around in a private vehicle imposes an external cost on everyone, whether they drive or not, by creating pollution and contributing to a warming climate. Tolls place more of the true costs of driving back on the driver. Tolling is an excellent strategy for the Bay Area to explore. However, as the study notes, the MTC doesn’t currently have the authority to impose tolls; it would need state legislation to do that.
Two tolling options
The MTC study includes six pathways that they studied but really focuses on two main pathways. The first is all-lane highway tolling, which means all lanes of all major highways during weekday rush hours from 6-10 a.m. and 3-7 p.m. would be tolled. The second is a mileage-based user fee that would charge drivers on all roads in the Bay Area based on the number of miles they drive during all hours.
When it comes to affordability, reliability, equity, and safety, each option has its pros and cons, according to modeling MTC staff uses to estimate the costs and benefits. For example, all-lane tolling would potentially:
- Decrease overall vehicle miles traveled by 4%
- Decrease greenhouse gas emissions by 2%
- Decrease highway peak travel times by 14%
- Increase transit usage by 0.3%.
The tolling option would also be more affordable for families as tolls for households below 200% of the federal poverty level would be capped at a maximum of $70 annually.
A mileage-based user fee would:
- Decrease overall vehicle miles traveled by 2%
- Decrease greenhouse gas emissions by 2%
- Decrease highway peak travel times by 2%
- Increase transit usage by 0.7%.
A mileage-based user fee would be less affordable for families than all-lane tolling, as households below 200% of the federal poverty level would pay as much as $300 annually before they reached the cap.
The all-lane tolling option could increase local street usage by 11%, according to MTC’s modeling, bringing more smog and pollution to our local roads. It could also cause local roads to need more frequent repairs, which would upset local politicians. However, it is important to note that tolling freeways doesn’t just divert all the traffic to local roads. It’s also more likely to reduce overall demand for driving, so even though MTC’s modeling shows an increase in local road usage, we might not see this big of an increase on local roads when it’s applied in real-world conditions. This option would decrease vehicle miles traveled on highways by much more than a mileage-based user fee, but the user fee does not increase local street usage at all. In fact, it decreases street usage by 2%.
Increasing transit usage is an important cornerstone of Transform’s philosophy, and the mileage-based user fee would increase transit usage more than highway tolling because it would generate more revenues than highway tolling. Therefore, more transit investments could be made by reinvesting revenues from the mileage-based user fee for transit for the same amount of GHG reduction. The user fee has a lower initial financial cost to implement because it comes with zero capital costs and brings in an annual net revenue of $2 billion. All-lane tolling would require $2.3 billion in capital costs to implement and would bring in an annual net revenue of $550 million.
Equitable tolling
For Transform, equity is an essential component in all policy changes. Tolling and increasing transit ridership are imperative in reaching our state climate goals and decreasing climate change globally. If structured equitably, these measures can also redress past transportation harms and avoid burdening already struggling families.
One of the best ways to mitigate harm to lower-income drivers is by capping the amount of money low-income families will pay in new tolls. MTC has proposed monthly caps on toll expenditures where households earning less than 200% of the federal poverty level — $62,400 for a family of four — only pay a maximum of $30 a month, while households at 200-300% of the federal poverty level would only pay a $60 maximum per month.
Additionally, highway tolls could result in a large increase in the use of local streets. While this model states that equity priority communities — Census tracts with a significant concentration of underserved populations, including people of color and households with low incomes — would not be disproportionately impacted, we remain cautious that the increase in vehicle miles traveled on local streets doesn’t disproportionately impact communities already burdened by pollution.
Equity includes ensuring that all regions of the Bay Area benefit from the money raised through tolling. Therefore, it is concerning that, in the highway tolling option being studied by MTC, the North Bay would only get 6% of the revenue from regional tolling for transit, local roads, and reparative infrastructure (investments in highway-adjacent low-income communities, such as urban greening and highway pedestrian crossings). We are all one region, so re-investment should not be exclusively tied to the percentage of county-generated revenue but allocated with the need and the importance of regional connectivity in mind.
All-lane tolling must also be equitable in how revenues are spent. MTC has proposed that 50% of the revenue from all-lane tolling will go to transit improvements, while 30% will go to roadway improvements and 15% to ‘reparative community investments.’ Since low-income and marginalized communities disproportionately use transit and have been harmed by past transportation decisions, the expenditures from all-lane tolling as proposed are progressive and would be an important step toward a more equitable transportation system.
Next steps for tolling
In a November 2024 policy advisory council meeting, MTC staff stated that while they are not saying one specific policy is better than another, they recommend that for Plan Bay 2050+, MTC should maintain the highway all-lane tolling option as a strategy in the plan and update it with the “latest strategy specifics to better balance tradeoffs between mobility, environmental, and equity outcomes.” In its upcoming implementation plan, MTC will identify actions to address some of the challenges mentioned in this blog.
While potential implementation of these tolling or user fee options would not start until 2035, MTC will be giving recommendations and an implementation roadmap during the fall and winter of 2024 and 2025, so this is a vital time for Transform to weigh in. We have been selected to be part of a diverse group of stakeholders participating in this process and have consistently reiterated the importance of equity in all tolling policy recommendations.
It’s critical to move forward on all-lane tolling, but Transform remains committed to ensuring an equitable solution moves forward.