[lbo-talk] Congestion pricing may not hurt the poor, study finds

[Max B. Sawicky]

By orthodox efficiency criteria, the optimal user fee does not 
necessarily suffice to finance capital expenditure.  Its main function 
as WS says is to set use levels.  Basically the correct toll runs off 
lower-value users (where 'low value users' is partly determined by 
willingness and ability to pay -- income levels).

There are some theorems where under certain conditions the receipts from 
congestion tolls finance the correct expansion of capacity.  But in 
general fees need not defray operating or capital costs.

Wojtek Sokolowski wrote:
> 
> 
> --- On Fri, 8/29/08, Jordan Hayes <jmhayes at j-o-r-d-a-n.com> wrote:
> 
> 
>> Here's what I don't get: Wojtek wants more transit,
>> but he doesn't want 
>> taxes to pay for it ... he wants 'rich white
>> fatheads' to pay for it. 
> 
> [WS:] You misinterpret my argument.  I make a clear distinction between funding and controlling the intensity of use.  I stated time and again that some form of general tax is a more efficient funding mechanism than user fees.  That holds for all public goods, including transportation.  
>