Guidebook for State, Regional, and Local Governments on Addressing Potential Equity Impacts of Road Pricing

Appendix A: Glossary

The terms in the glossary have been divided into the following subsections:  key equity terms, types of equity, mitigation terms, key policy definitions, and other useful terms.

Key Equity Terms

Benefit principle: The idea that it is equitable for one group to pay higher taxes if its members receive greater benefits.³⁴

Benefits received: People who use a facility the most pay the most.

Classifications: Ways that equity can be categorized in terms of what factors are taken into consideration.³⁵

Communications: Working with the public in order to produce a favorable perspective and understanding of a road pricing project.

Efficiency: An allocation of resources is efficient if there is no other feasible allocation of resources that can make more people better off without making anyone worse off.  In terms of transportation analyses, efficiency is measured in terms of a policy's ability to maximize overall total social welfare, regardless of whether some individuals are made worse off.

Equality: Distributing costs and benefits in a manner that benefits all people to the same extent.  This can refer to equality of opportunity, whereby all people have the same chances, or equality of outcome, whereby all people end up with the same opportunities.³⁶

Equitable: Meeting a normative standard of fairness.

Equity: A measure of "fairness" in terms of the distribution of costs and benefits among members of society.  Such benefits and costs—whether monetary or nonmonetary—can be distributed in ways that people may see as reasonable or unreasonable.

Equity categories: The social groupings that are under observation.

Equity impacts: Consequences of transportation policy that may affect equity.

Evaluation: Examining road pricing projects in regard to various factors in order to assess their equity impacts.

Impacts of concern: The aspects of travelers' lives that are affected by the transportation or pricing project.

Indicators:Measurable variables selected to reflect progress toward planning objectives.

Measures to assess equity impact: To allow for comparison between projects or between the present situation and the future situation (after the project is built), the equity impacts must employ measures that account for the size of the project (e.g., per capita, per vehicle mile, per trip).

Net equity outcome: The positive and negative equity outcomes of a project—sometimes preferable to considering only negative outcomes.

Polluter pays principle: Tolls are considered fair if people pay an amount roughly equal to the costs they impose on others.³⁷

Remediation: Strategies implemented to reduce inequity.

Toll roads, bridges, and tunnels: Individual routes that apply tolls independently.  These facilities often collect tolls to repay bonds issued to finance their construction rather than to manage congestion.  Tolls can be collected manually at tollbooths or electronically using transponder technology.

Types of equity: A set of criteria to constitute equal treatment.

Units of analysis: How equity is analyzed in regard to a particular group of individuals.

Types of Equity

Ability Equity: concerning issues and inequalities effecting physically disabled persons.

Access to tolled facilities equity: A term³⁸ referring to whether barriers to owning a transponder, including requiring a credit cards (20 to 40 percent of U.S. households do not own credit cards) and large deposits, make using the facility too onerous.

Compensatory equity: Social problems and inequities addressed by providing transportation access or resources.

Education equity: concerning issues and inequalities facing less educated users in comparison to degree holders.

Environmental/green equity: Equal protection from environmental hazards for individuals, groups, or communities regardless of race, ethnicity, or economic status

Gender equity: A less recognized equity issue concerning the behavior and usage differences between male and female motorists (e.g., one study finds that women value travel-time reliability more than twice as highly as men).³⁹

Generational equity: A subset of vertical equity concerning the burdens placed on future generations from policies made by and for the current generation.  For example, borrowing for long-lived facilities is fair because it spreads the cost across generations of users, as opposed to current users paying for future generations.

Geographic equity:  A subset of vertical equity concerning how where people work and live influences the effect transportation investment decisions has upon them (e.g., State versus state, urban versus rural).

Horizontal equity: How members of the same group (e.g., drivers or bus riders) fare relative to one another.

Income equity: Sometimes called redistributive equity. This equity type includes the effects on economically disadvantaged communities and low-income people. (e.g., do improvements negatively impact disadvantaged communities? Are improvements with negative consequences necessary for greater State or regional vitality?)

Language equity: concerns and inequalities faced by users not native to the standard language

Life-stage equity: concerning issues and inequalities faced by users of various life-stages in comparison to other users such as retirees, people with families, single users, etc.

Market equity: A price charged to each individual or group that is directly proportional to the costs imposed and benefits received by that individual or group.

Modal equity: Dedicating revenues to the modes where they were generated (e.g., a state requiring that gas tax revenue be spent on roads).

Modal equity:The effect on preferred travel behavior (e.g., Do activities conflict with public perceptions for the encouragement of multimodal transportation?).

Occupancy equity: concerning inequities and concerns faced by SOV users in comparison to HOV users (and vice versa).

Opportunity equity: Costs/benefits that are proportional to the size of the receiving group without regard to any other distinguishing characteristics between groups.

Outcome equity: See vertical equity.

Participation equity: Sometimes called process equity, the ability to participate in the decision-making related to a project by responding to a public solicitation, attending a public meeting, rallying neighbors to support or oppose a measure, and so on.

Payment medium access equity: Concern over a denial of access to priced road projects or reduced equity. A significant portion of the population does not have access to credit cards (20 to 40 percent of the population) or checking accounts (10 percent) that facilitate easier use of a road pricing facility.  Others may find the deposits required to obtain a transponder onerous.  Some toll roads require transponders.

Process equity: See Participation equity

Race/ethnicity equity: Considering whether different racial and ethnic groups, particularly minorities, are burdened disproportionately, taking into account fees paid, benefits received, and impacts experienced.

Redistributive equity: See Income equity

Spatial equity: A geographic application of the horizontal and vertical equity concepts.

Vertical equity: How members of different groups (e.g., low-income groups versus high-income groups, drivers versus non-drivers, or inner-city versus rural residents) fare relative to one another.

Mitigation Terms

All Electronic Tolling (AET): Vehicles are automatically charged via transponder and license plate imaging

Area-license systems: Drivers may travel in and out of a zone an unlimited number of times for a fixed fee during certain hours.  In addition, licensed residents of the zone may receive a discount or exemption.

Cordon pricing: Every time a vehicle crosses a boundary (i.e., cordon) into and out of a charged zone, a fee is charged. Generally, the amount of the charge varies between weekdays and weekends and peak and off-peak hours. Trips that begin and finish entirely within the zone are not charged.

Credit-based congestion pricing: Revenue-neutral pricing system in which an individual or group receives "credit" to charge toward a certain action such as traveling in congestion lanes during rush hour, or a certain amount of congestion fees to be used each month.

Disability exemption: Exemption offered to disabled individuals who may not have reasonable alternatives for transit (e.g., it is challenging or impossible for wheelchair users to use mass transit).

Discounts: Reductions in congestion charge offered to certain individuals or groups.

Distance-based fees: Vehicle use fees based on how many miles a vehicle is driven.

Exemptions: Excluding certain individuals or groups from being charged (e.g., emergency vehicles).

Express lanes: A variation on HOT lanes which carpools must pay a toll to use, though the toll may be lower than that charged to solo drivers.

FAIR lanes: Fast and Intertwined Regular Lanes, a variation on HOT lanes whereby drivers in the regular (un-tolled) lanes receive credits that, depending on the structure of the program, can be used to pay for using the fast (tolled) lanes, or for public transit fares or other transportation services.

Geographic exemptions: Exempting individuals from paying charges based on their residential/geographic situation (e.g., residents forced to drive through a cordoned zone regardless of their destination).

HOT lanes: High-occupancy/toll lanes, a version of high-occupancy vehicle (HOV) lanes. Qualified carpool vehicles can use HOT lanes free or at a discount, while other vehicles having must pay a toll.  All vehicles continue to have the option of traveling in free general-purpose lanes.

Income exemption: Exempting individuals or groups from charges on the basis of their income level (e.g., household income less than $X is exempt).

"Lexus Lanes":  A term used to describe road pricing projects as inequitable for lower income drivers.  The term is effective and popular as a sound bite, but with has negative connotation for many.

Revenue redistribution: Redistributing revenues through public spending on specific transportation-related improvements.

Road space rationing: Using revenue-neutral credits to ration peak-period roadway capacity.

Time-, distance-, and/or place-based pricing: Adjusting road-user charges based on the distance traveled, location, time of day, and vehicle type. Some proposals also adjust the toll based on vehicle fuel efficiency or pollution certification level.  These tolls are often collected to both finance maintenance efforts as well as manage congestion.

-Based	Definition/Toll varies by...
Time-	time of day
Distance-	trip length
Place-	Facility type (bridge toll)
Fuel-	Electric vehicle may get a discount
Emissions-	Electric vehicle may get a discount
Vehicle type-	Trucks pay more

TOT lanes: Truck only toll lanes, proposed to reduce traffic and congestion in the general purpose lanes by consolidating truck and freight operations into a separate facility

Transit investment: The use of transportation revenues to improve transit systems (thereby improving transportation choices for low-income travelers and those who are affected by new charges).

Key Policy Definitions

Civil Rights Restoration Act of 1987: Identified the extent to which Title VI applied, to include all Federal-aid recipients, sub-recipients, and contractors, regardless of whether specific activities are federally funded or not.

Environmental justice: The fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies (U.S. Environmental Protection Agency official definition).

Executive Order 12898 of 1994: Established the precedent that environmental justice consideration is extended to low-income populations and to avoid "disproportionately high and adverse" effects.

Federal Aid Highway Act of 1970:Ensured that transportation facilities would be approved "in the best overall public interest" with efforts to eliminate or minimize effects on community cohesion, employment effects, and displacement of people.

National Environmental Policy Act of 1969: An act requiring that for proposed major transportation facilities, an analysis of environmental impacts go beyond the infrastructure itself to include a broader geographic area.

Title VI of the Civil Rights Act of 1964: States that no person in the United States shall, on the ground of race, color, or national origin be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.⁴⁰

Other Useful Terms

Ability to Pay: People who have more money pay more (i.e., a project is financed through a progressive tax that is paid disproportionately by higher income people).⁴¹

Cost recovery: The ratio between costs imposed on users and what they pay in user fees and special taxes.

Costs imposed: Users pay for the burden they impose on others (e.g., extra expense required to provide express bus service for suburb-to-city commuters is recovered through fares on this service).⁴²

"Do-Nothing Alternative": A solution where no action is taken.

Equity audit tool: A systematic approach to monitor and periodically make needed changes to implemented pricing programs to ensure that the tools to promote equitable outcomes are meeting their goals.⁴³

Focus groups: Small groups of representative people who are questioned about their opinions as part of market research.

Geographical Information System (GIS) analysis—Often used to determine the location of groups affected by a project, and related to environmental justice concerns.

Highway cost allocation: Analysis of the costs imposed by various types of vehicles and the degree to which they are recovered by user fees.

Limitation: Maximum or minimum amount allowed.

Mobility gap analysis: An analysis of the difference in motorized travel (automobile, public transit, taxi, etc.) between households with and without automobiles ("zero-vehicle households").

Process (or participation): Having a voice when the decision was made (e.g., Public outreach regarding proposed new high-occupancy toll lanes provides transparent information and seeks to involve all affected parties in public hearings and workshops.).⁴⁴

Progressive: Placing a higher burden on those with higher incomes (e.g., the U.S. income tax).

Regressive: Placing a higher burden on those with lower incomes (e.g., a uniform tax of $500 is regressive, since $500 is a larger proportion of a lower income).

Return to Source: "We get back what we put in" (i.e., transit investment in each county is matched to that county's share of metropolitan tax revenues used for transit).⁴⁵

Revenue: The income of a party from all sources, used to pay for the party's expenses.

Revenue-neutral: Having no effect on overall revenue.

Subsidy: A form of financial assistance paid to a business or economic sector.

Surveys: Examinations of opinions, behaviors, effects, and so on.

Transponder: A wireless communications, monitoring, or control device that picks up and automatically responds to an incoming signal.

Unbanked: Lacking access to a bank account either by choice or by circumstance.

Uniform: Treating all people equally from a strictly monetary perspective (e.g., a uniform tax would charge each person the same amount, and a uniform redistribution of revenues would provide each person with the same amount of money).

Welfare: The overall well-being of people, either as individuals or collectively.

In addition to the specific citations, the following sources were consulted in developing the glossary:

Texas Transportation Institute with assistance from Cambridge Systematics, Background Paper #4: Equity, Fairness, and Uniformity in Tolling, Washington State Comprehensive Tolling Study, Final Report, Volume 2, September 2006 (paper completed January 2006). http://www.wstc.wa.gov/Rates/Tolling/FR1_WS_TollStudy_Vol2_Paper04.pdf Accessed Sept. 1, 2011.

Ecola L. and Light T., Equity and Congestion Pricing A Review of the Evidence (RAND 2009). http://www.rand.org/pubs/technical_reports/TR680.html Accessed January 27, 2012.

Equity of Evolving Transportation Finance Mechanisms,(Transportation Research Board Committee Special Report 303, 2011).  http://onlinepubs.trb.org/onlinepubs/sr/sr303.pdf

King D.A., Remediating Inequity in Transportation Finance, (Transportation Research Board Special Report 303, 2009). http://onlinepubs.trb.org/onlinepubs/sr/sr303King.pdf Accessed Sept. 1, 2011.

Litman T., Evaluating Transportation Equity, World Transport Policy & Practice, Volume 8, No. 2, Summer 2002, pp. 50-65. Updated version (2011) available at http://www.islandnet.com/~litman/equity.pdf

Litman T., TDM Encyclopedia, VTPI, http://www.vtpi.org/tdm/tdm35.htm