Tolls in America—a New Reality?

Private toll companies and state toll agencies have run up against a funding crisis just like the rest of the country. As mentioned in the last Tolling in America blog, if private toll companies are a part of a PPP or Public-Private Partnership, they might bail (as has been done before) if the money they thought would make is not there.  Guess who ends up holding the bag of debt—taxpayers do!

Ironically enough, Bloomberg News this week suggested that municipal-bond investors might be interested in investing in toll roads as a safe bet. Despite the economic downturn and the nearly $140 billion of debt sold for US toll roads, tolls are still a good bet because, before the COVID-19 crisis, toll operators kept large cash balances.

One of the largest toll operators by mileage in the country, the Oklahoma Turnpike Authority, had more than 590 days of cash on hand at the end of 2019, for example. Moody’s Investors Service even states that most of the publicly-owned toll roads it rates should be able to absorb a 30 percent revenue decline. Trucking has also helped toll roads apparently due to online shopping. In June, truck tonnage jumped 8.7 percent according to the American Trucking Associations. recently released a study that indicated 25 states divert gas tax money for other budget items. The two states, which are increasing tolls again, Pennsylvania and New Jersey, are on the list. New Jersey is third highest with a 33.9 percent diversion. Pennsylvania is lower down on the list at 3.1 percent.  Michigan does not divert gas taxes according to the study. Still, it does have a transportation funding issue, and Governor Gretchen Whitmer signed a bill recently that would take a look at tolls as a funding mechanism in the state.

The Pennsylvania Turnpike Commission decided last week that it will again raise tolls by six percent beginning January 3, 2021, with an additional 45 percent surcharge for motorists who do not use E-ZPass or the Toll by Plate system. An east to west cross-state trip with EZ-Pass will now cost motorists $47 (up from $44.20), and Toll by Plate would rise to $95.30 (from $61.80). The Turnpike moved to all-electronic tolling this spring, eight months earlier than expected, due to the pandemic. About 86 percent of motorists use E-ZPass. The Turnpike Authority says it has lost about $160 million in revenue since March.

New Jersey motorists received some ridiculous bills with administrative fees for tolls closed during the shutdown. Between late March to mid-May, toll collectors were not available to take cash due to the COVID-19 shutdown restrictions. Driver Lindsay Weiner crossed the Ben Franklin Bridge 25 times in that period, which should have cost $125 ($5 per trip). She received a bill for $750, which included the $5 toll plus a $25 administration fee for each of the 25 trips. Another driver received a bill for a $50 administration fee added to a 40 cent toll bill. The company handling the tolls, Conduent, Inc. never mailed out first notices to motorists…only second notices, which included the administrative fees. The 79,000 motorists who were not sent the first notice and received additional fees on their second will have the fees cleared off their bill and anyone who paid the fees will also be reimbursed. What is less clear is how many separate toll facilities in the area this spanned beyond the NJ Turnpike and the Garden State Parkway, both run by the Turnpike Authority. Conduent is the same company that was at the center of Florida’s SunPass botched new tolling system roll out in 2019.

Anyone following the NYC congestion pricing saga knew this was coming—the MTA announced at least a one-year delay to early 2022 for the scheme that would raise $15 billion for the beleaguered subway system on the backs of motorists. Mayor Bill de Blasio does not expect any movement on congestion pricing unless Joe Biden is elected President. He also is interested in looking at some alternatives such as HOV lanes as a stopgap measure. The federal government has still not told the MTA what kind of environmental assessment the project will need to begin since tolls will be imposed on roads funded by federal dollars. The saga continues.

The Assembly Transportation Committee will not hear until 2021 California bill SB1373 that would block a toll road extension in Orange County. The road would extend State Route 241 through the city of San Clemente. Supporters of the ban have been working for several years to make sure this extension does not happen. Despite the passage of the bill in the Senate, SB1373 was put on the back burner due to the time constraints of the Assembly amidst the COVID-19 crisis. State Senator Patricia Bates does expect the bill back on the Assembly’s schedule in January.

NMA also has resources that might help in local efforts to fight tolls and fight for proper funding of infrastructure.

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One Response to “Tolls in America—a New Reality?”

  1. Sherman A Johnson says:

    $47 to $95, just to drive through PA?! That’s outrageous!
    The Turnpike is 360 miles long, so that’s $0.13 to $0.26 per MILE!
    In contrast, the fuel tax — which averages about 50 cents per gallon — costs about $0.02 per mile with a 25 mpg vehicle.
    Granted, the fuel tax needs to be raised, perhaps doubled — but why on earth should motorists have to pay 13-26 cents per mile, on top of the fuel tax we all pay?
    Does the Turnpike Authority even attempt to justify this?