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IX. What to do with the revenues?

Spending the proceeds is not a big problem with start-up HOT lanes. The revenues from the Route 91 HOT lanes will pay for building them, and, we hope, for a deserved profit to the entrepreneur who builds them. HOT lanes to be built in the future could likewise absorb years of revenue to pay for their construction. But the closer the system gets to full scale the closer we will be to what both WSA and Deakin-Harvey say could be a $3-billion annual stream of revenue. How might it be spent?

The most detailed recommendation is that of UC Irvine economist Kenneth Small. In 1993 he proposed the following spending package for $3 billion: 23 percent of it on a $10-a-month employee commuting allowance; 10-18 percent each on fuel tax reduction (5 cents); sales and property tax reductions (for their transportation subsidies); highway improvements; transit improvements; and transportation services in business centers (Small, 1992, 1993).

One could do worse than recommend the Small package wholesale, though detailed recommendations made years in advance of need also have a downside, that times will change and render them obsolete. A more flexible set of guidelines, generally consistent with the Small recommendations, is that provided by the Task Force. Pricing revenues should be used for:

    1. Building and operating the priced facility
    2. Improving the transportation system, especially on corridors priced or affected by pricing (congestion fee revenues)
    3. Improving air quality (emissions fee revenues)
    4. Mitigating equity impacts to individuals and to regional economies
    5. Providing return to individuals (e.g., tax rebates, tax cuts, tax credits, cash rebates) and/or to local governments. As we have seen in Section IV above, some systems could more than cover the per-household costs of all current gas taxes, user fees, and fares.

These hardly guarantee that the revenues will never be wasted, and some of them probably will be. But it is hard to imagine any more complete waste than that of people's time and health that takes place under the current system.

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