Senator, you had your turn; now the E-ZPass facts
Last week Getting There published a letter from Sen. E. J. Pipkin on the subject of the Maryland Transportation Authority's recently imposed E-ZPass fees and other revenue-raising measures. We gave the senator a few days to air his views unmolested while we checked some facts. The grace period is now over. Here's his letter, with our take in italics:
FATTENING THE CASH COW – MAKING BAY BRIDGE E-Z PASS USERS PAY MORE
Senator, I hate to break it to you, but a large part of your district hardly ever uses the Bay Bridge. But your constituents in Cecil County, for instance, are very much affected by what happens on the Hatem Bridge and Kennedy Highway, both also operated by the Maryland Transportation Authority. You shouldn't make them feel left out.
Dear Sir,
In January, when the MdTA announced that it would impose higher fees and new costs on Bay Bridge commuters who use E-ZPass customers, I voiced my objections. Starved as the State is for revenue, I did not really expect the State to retreat from grabbing $60 million from Marylanders. In this instance, it would be Marylanders who use the Bay Bridge and other state toll facilities.
The Bay Bridge has always been a cash cow for the MdTA’s highway projects. The Bridge raises over $30 million in toll revenue each year and costs less than $8 to operate.
Ahem. I'm going to assume you meant $8 million. Even if you did, you're passing along bad information. I checked with MdTA spokeswoman Cheryl Sparks and got the accurate figures. Here's what she had to say:
"The state senator’s statement asserts that the Bay Bridge is fully paid for and generates annual net operating income. The policy of the Maryland Transportation Authority is to pool revenues from all facilities, to assure that every facility is properly maintained. The Authority staff has analyzed all costs for financing the Bay Bridge, including bridge maintenance, operations, and capital expenditures, as well as interest on debt service, for both spans since their construction. This analysis required certain estimates and some assumptions. When all these costs are considered, the Bay Bridge is not completely paid for. Additionally, the Authority issued debt in 2004 and 2008, a portion of which helps finance $200 million Bay Bridge preservation projects. Interest on this debt service will be paid until at least the year 2042.
The annual revenue and expenses indicated by the state senator are not accurate. For example, in FY 2008 revenues were $33.5 million, operating & maintenance expenses were approximately $14.0 million, capital expenditures were $20.2 million, and debt service interest was $2.3 million.
On July 1, the new fees and costs became effective. E-ZPass users will now have to pay for transponders, more for toll violations and a new charge of $1.50 a month to
cover some of the costs of processing the program. According to then-Secretary of Transportation, John Porcari, the new charges would help recover costs and maintenance of the state’s toll facilities. Pocari said that he was taking this action “reluctantly” and called it a “last resort.”
As I see it, the State of Maryland has never shied away from bleeding its citizens with new and inventive taxes and fees. That it does so, in this faltering economy, is unconscionable.
The cost of a Bay Bridge round trip hasn't changed since the 1970s. The state's gas tax hasn't gone up since the early 1990s. Some tolls on passenger vehicles went up under the previous governor -- largely to help pay for projects such as the Inter-county Connector and express toll lanes on Interstate 95. The current administration stuck it to truckers because it was too shy to impose a more broad-based toll increase.
Maryland, like all other states, has been pushing people to use electronic toll collections, which expedite the flow of traffic. Making the cost of using electronic toll collections higher and adding fees makes no sense. It is counter-productive. Those higher costs and that additional monthly $1.50 fee could push people and commercial users away from electronic toll collections. Let’s face it, toll facility users could very well decide to not to use E-ZPass.
They could. And if they're among the 72,000 subscribers who didn't use the passes once during the course of a year, they darn well should. How does it help the flow of traffic to subsidize drivers who aren't even on the roads you want to de-congest? And how exactly has Maryland "pushed" people to use E-ZPass? By taking money out of the pockets of cash toll-payers and handing them free transponders. By setting up accounts for them and shouldering the costs whether they pay tolls or not. Senator, that's socialism.
It is the worst type of folly for government to grab the money and run without giving significant weight to negative unintended consequences. In its eagerness to grab the $60 million, the State could be stymieing or sabotaging Maryland’s transportation progress. The purpose of E-ZPass is to alleviate traffic congestion. Bay Bridge traffic increases between 2% and 3% each year. If the higher cost of using E-ZPass reduces the number of users, Maryland will have taken an unfortunate step backward from transportation progress.
So you think the authority should make do without $60 million in revenue? Where do you want them to start deferring maintenance? The Bay Bridge? The Cecil County part of the Kennedy Highway? How about keeping the old deck on the Hatem Bridge? Wouldn't any of those options sabotage a little progress? And really, senator, how many frequent E-ZPass users are going to give up that convenience over a matter of $1.50 a month? Maybe enough to cause a traffic jam at the Bellevue-Oxford ferry.
Sincerely,
E.J. Pipkin
Your sincerity, senator, is never in doubt.
Sincerely,
Michael Dresser
Comments
Michael,
You have repeatedly repeated a claim that ezpass holders who do not use their ezpass costs the state money. Can you substantiate this claim, beyond simply repeating a line reported to you by MDOT? This seems akin to a credit card holder who does not use their credit card. Millions of Americans undoubtedly hold credit cards they do no use. Just as these credit card holders do not generate bills, EZPass holders who do no use their ezpass do not receive bills (electronic or paper). Please explain how these users cost the state so much money.
Thank you.
Posted by: iu | July 10, 2009 9:30 AM
iu,
Account holders that do not use their accounts create costs in several ways:
1) The state gave them a free transponder
2) More customers means greater peak capacity demands
3) Holding inactive data still requires server space and people to manage technology
While the monthly variable cost associated with an inactive account is very low, the intial outlay associated with a new customer is high and each new customer requires greater installed capacity.
I understand that Maryland needs to raise revenue to fund the EZ Pass program, I just disagree with the how. Instead of charging a monthly fee, I would have preferred instituing an initial fee for the transponder (which the state did) and raising tolls generally, including reducing the discount given to frequent trip EZ Pass users. As Michael points out in his rebuttal, the Bay Bridge toll has not risen since the 1970s, despite the increases in traffic. To me, that should be the first step.
I disagree that the 72,000 people who did not use their EZ Pass in the past year should not have their account subsidized. It would seem to me that these are the people who the state was trying to sign up: the family that goes to the beach on occasion, or the suburban dweller that only occasionally uses the Harbor Tunnel.
This would have the desired effects on congestion (more EZ Pass users allow higher throughput, higher tolls discourage use) and still allow the state to recoup its costs. Basically, I think the subsidy for infrequent users can be justified because of the benefits that come from widespread EZ Pass use.
Posted by: Mitch | July 10, 2009 10:54 AM
None of you have any facts to back up what the EZPass system (itself really an extension of NY/NJ Transit, but purportedly "owned" by all the member state DOTs that participate in EZPass) charges MDTA for account maintenance, transponders, fee per toll, fee per credit card charge, etc. Without that information, this discussion is a bunch of noise.
Additionally, the reason many states / toll facilities are going to entirely cashless systems (see North Texas Tollroad Authority, Plate Pass, and others) is that it is much less expense in the long run (remember, taxpayers keep paying for these for a long time) to build fewer lanes at toll plazas, manage cash collection, repair mechanical systems to collect change, not to mention the implicit cost in congestion and waste by facility users having to stop (and line up) to pay for tolls.
That being said, it is abhorrent that the gas tax has remained flat for 20 years. No surprise that funds have to come from somewhere, unless we don't mind our bridges falling down (Minneapolis).
Posted by: Steven | July 10, 2009 2:00 PM
what point were you attempting to make with this quip? "Maybe enough to cause a traffic jam at the Bellevue-Oxford ferry"
Posted by: anne | July 13, 2009 12:12 PM
In the US, we think everything is free. I guess it costs nothing to maintain the bridges and roads. Yes, I realize that is not the case.
That being said, I do not understand this fee. Too many states now have average folks pay for things for which they will be excluded or cannot afford. If that is so, it better benefit the state in some general way but that is questionable.
Why is there not an annual fee of $ 3- 6 like most other states ?
If the ICC is going to be a toll road, should not those tolls fund it rather than everybody else ?
Also, taxing people to build "Lexus lanes" that by definition are meant to keep the average folks out does not seem right.
The fact the gas tax has not increased in so long and the Bay Bridge toll has not changed in 30 years also is silly. How much money would be raised if you simply raised that from a few cents, $.10 - .25 ?
Md. always tries to hide things like this, an Ehrlich like tactic.
Lastly, Maryland is not a big state. If your charges look high compared to our neighbors, some will get their convenience elsewhere. Until I saw what they money was going for and that other tolls/fees are unchanged for decades, I thought I would keep my transponder. Now, I may just put up with paying the old fashioned way.
Posted by: TBear | July 15, 2009 8:27 PM