The Bright Side of $145 Crude Oil and $4.50 Gasoline? No Congestion Pricing

Implications:   New York City Mayor Michael Bloomberg's scheme to charge drivers $8 per vehicle to drive in lower Manhattan during business hours was attacked by drivers, the trucking industry and eventually was shot down by the New York State legislature in Albany.   But the combination of $4.50 per-gallon gasoline and the slowing American economy has produced the same effect: fewer vehicles clogging Manhattan streets during business hours.   Is this the death knell of that awful scheme favored by academics and grant-seekers everywhere, "congestion pricing?" Could be.

Analysis:   What do the Brookings Institute, the Reason Foundation, New York City Mayor Michael Bloomberg and thousands of transportation academics and grant-seekers studying traffic patterns have in common?
  They all love something called "congestion pricing."
  What that is, for the uninitiated, is awful.
  It's a scheme that makes one pay for services that are now free. In Bloomberg's case, it's for the privilege of driving in midtown and lower Manhattan.
  The esteemed mayor, who made his fortune selling and packaging business data to investors for a healthy monthly fee at Bloomberg LLC, embraced congestion pricing like a starving whale attacked a school of minnows.
  The initial per-vehicle charge of $8 -- which was surely going to rise in coming years -- was unreasonably high. The entire scheme was attacked by motorists groups and the U.S. trucking industry as just another assault on their wallets. And rightly so.
  Finally, the New York State Legislature -- dominated, one should note, but Bloomberg's own party, the Democrats -- shot the entire idea down last March.
  But a funny thing happened to the caravan on the way to the circus.
  The exact, precise intent of congestion pricing -- to change drivers' habits and reduce midday traffic -- has been accomplished through purely market forces.
  Data compiled by the Metropolitan Transportation Authority shows traffic on the city's bridges and tunnels dropped 4.7 percent in May compared to year-ago levels. A similar drop is expected in June, and it might even be higher.
  The Port Authority of New York and New Jersey recorded a similar decrease on its bridges and tunnels since March when it raised tolls. April traffic on Port Authority-controlled bridges and tunnels dropped 4.2 percent year over year.
  A quote by transportation consultant Sam Schwartz in this front-page story in the New York Times says that $4.50 gasoline has put us "at a point where people really are changing  habits. " That will only increase if gasoline hits $5 a gallon, a level that is predicted by Labor Day.
  People are adjusting. They're taking the bus. They're taking the subway. They're taking commuter rail. They're doing everything they can to avoid driving.
  So the mayor's office has to be happy, right.
  Uh, no.
  In fact, the mayor is said to be highly steamed over it. Perhaps it was because the tax-adverse mayor was counting on the millions of dollars that his scheme would have produced. That is money, by the way, that probably would not have been spent on transportation projects, but instead gone straight into the city's coffers.
  Bruce Schaller, Bloomberg's deputy transportation commissioner, says the "magnitude here is by no means comparable to the effect of congestion pricing."
 Uh, what? In fact, Bloomberg's own office calculated that the congesting pricing scheme would have produced a 6.3 percent drop in total miles traveled by all vehicles in the congestion-pricing zone. There are estimates that the current drop in bridge and tunnel traffic has produced a 2 to 3 percent drop in overall Manhattan traffic. (The reason for the discrepancy is that some vehicles, notably taxis, travel more miles in the zone than, say, single-occupant vehicles.)
  It's easy to understand why the mayor and his people are all atwitter. They're losing out on millions from their nifty little plan, which was nothing more than a tax increase called by something other than a tax increase.
  It seems to me the market place, in the case, is working just fine. And that could spell the end of "congestion pricing" nationwide. Too bad for all those grant-seekers. They're going to have to find another scheme to discuss in their endless white papers.