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VMT Reduction Options Research Report

VMT Reduction Options Research Report. Rhode Island GHG Process - Phase IV Transportation and Land Use Working Group - Meeting 2 January 7, 2005. 410-569-0599 www.meszler.com. Introduction. Three VMT reduction options identified for further study at last workgroup meeting.

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VMT Reduction Options Research Report

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  1. VMT Reduction OptionsResearch Report Rhode Island GHG Process - Phase IV Transportation and Land Use Working Group - Meeting 2 January 7, 2005 410-569-0599 www.meszler.com

  2. Introduction • Three VMT reduction options identified for further study at last workgroup meeting. • Parking cash-out. • Increased gasoline tax (regional basis). • Pay-as-You-Drive (PAYD) insurance. • Additional research within the constraints of available funding has been performed. Page 2

  3. Parking Cash-Out • RI legislation passed in 2004 based on limited California impact analysis. • No RI-specific data gathered or generated. • California cash-out law passed in 1992. • Substantively similar to the RI law, except CA law has no “proximity to transit” criteria. • Also, like RI law, CA law has no implementation or enforcement authority and, as a result, is only “known” to a fraction of covered employers and implemented by even less. Page 3

  4. Parking Cash-Out (Continued) • Nevertheless, some CA employers have taken the law to heart and implemented effective programs that show average VMT reductions (across 8 employers) of 12%. • Of course, this is not 12% of total VMT, but 12% of commuting VMT at those employers. • Crude estimates of the fraction of total employees covered and the fraction of total VMT associated with commuting indicate that aggregate VMT reductions (in CA) might be a few tenths of a percent. Page 4

  5. Parking Cash-Out (Continued) • RI-specific benefits not yet quantified, but data from GIS databases indicate that about 35% of all RI employees work for employers of 50+ within 0.25 miles of transit. • Additional metrics required to estimate potential VMT benefits elusive. • Fraction of employees with subsidized parking. • Response rate to transit pass offering. • Usage rate of pass. • Commute distance offset. • Etc. Page 5

  6. Parking Cash-Out (Continued) • Propose possible “Delphi-type” analysis of benefits where local experts are polled for their best estimates of the requisite parameters. • State Planning, RIPTA, RIDOT, others (?) • Based on the “average” expert estimates, produce “best estimate” impacts. • Another potential workgroup focus: U.S. tax law is still biased toward parking subsidy -- revisions would strengthen cash-out option benefits. Page 6

  7. Regional Gas Tax • Current state tax rates identified. • Current RI tax exceeds all others by 5.8 to 11.5 cents. Page 7

  8. Regional Gas Tax (Continued) • Distribution of current RI tax: • 1 cent to leaking underground storage tank cleanup fund. • 6.85 cents to RIPTA. • 1 cent to the Elderly/Disabled Transportation Fund. • 1.4 cents to general revenue. • Remainder (20.75 cents) to DOT. • Maine is unique in requiring annual CPI adjustments. Could be explored in RI, but will only stabilize VMT signal. Page 8

  9. Regional Gas Tax (Continued) • Basic analysis of the impacts of potential gas tax increase has been performed using elasticities derived from literature. • Wide range of elasticities identified. • Short term (VMT reduction) = -0.1 to -0.2 • Long term (VMT+efficiency increase) = -0.4 to -0.8 • Many economists believe current elasticities may be on the lower end of the literature ranges. • Analysis based on midpoint estimates of indicated ranges. Page 9

  10. Regional Gas Tax (Continued) Page 10

  11. Regional Gas Tax (Continued) • Analysis assumptions. • Base gasoline price is $2.00 per gallon. • Maximum gasoline price is capped at $5.00 per gallon. • Annual price increases are implemented between 2006 and 2025. • The short run elasticity is ‑0.15. • The long run elasticity is ‑0.60. • Short run elasticity applicable for 4 years after each price increase. • Long run elasticity fully attained 15 years after each price increase. • Elasticity in 5th‑14th years after each price increase is linearly interpolated. Page 11

  12. Regional Gas Tax (Continued) • Given steep gasoline price increases of the last year or so, prime opportunity exists to quantify current elasticity. • Requires detailed statistical analysis of long term gasoline sales database to “filter out” non-price influences. • Requires reasonable funding commitment. Page 12

  13. PAYD Insurance • MA pilot program discussed at last workgroup meeting never implemented due to existing legislative prohibitions in the state. • Conservation Law Foundation actively pursuing legislative changes and working with state regulators to develop supporting database. • In the interim, has established a conventional insurance program as a transition mechanism should PAYD become feasible. • Bill has been introduced in MA to allow PAYD. Page 13

  14. PAYD Insurance (Continued) • 2003 survey of state insurance commissioners shows that 16 states currently prohibit PAYD. • RI and CT (plus five others) non-respondents. • Prohibitions generally incidental, not intentional. • Followup “brief” discussions with CT and RI regulators indicate no explicit prohibitions in either state. • Followup discussions with insurance companies to evaluate interest pending. Page 14

  15. PAYD Insurance (Continued) • PAYD pilot programs: • Atlanta (Georgia Tech). Detailed study to evaluate PAYD elasticity. Data available late 2006 or 2007. • Progressive Insurance. Offering PAYD to 5,000 drivers in MN. Up to 25% discount based on VMT and other factors. • GMAC. Offering PAYD to AZ, IL, IN, and PA OnStar customers. Up to 40% discount available for operators with VMT less than 2,500 miles per year (0% at 15,000 miles). • European pilots in the U.K and the Netherlands. Page 15

  16. PAYD Insurance (Continued) • Related pilot programs: • MN DOT examining conversion of fixed costs (e.g., sales taxes, registration fees) to variable mileage-based costs. Program includes evaluation of various fee rates in an effort to quantify elasticity. • Oregon examining VMT fees as an alternative to traditional gas taxes. • Washington examining temporally and spatially variable VMT fees. Page 16

  17. PAYD Insurance (Continued) • Previous researchers have estimated potential VMT reduction benefits of 10-12%. • Associated reductions in crashes and claims of 12-15%. • Independent research for RI GHG Process has not been performed. Page 17

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