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“On The Road Again,” With Electronic Tolls

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Richard T. Moore
September 16, 2019

Willie Nelson’s classic hit, “On the Road Again,” might be a great theme song for the rapidly growing electronic tolling industry. In an industry report published August 30, 2019, market analysts Search4Research noted, “Global Electronic Toll Collection Market is valued approximately USD 7.62 billion in 2018 and is anticipated to grow with a healthy growth rate of more than 10.12% over the forecast period 2019-2026. Electronic tolling isn’t just for highways, but also is increasingly found in use at tunnels and bridges as government entities and authorities look for ways to get users to pay for needed infrastructure. With the near depletion of the Federal Highway Fund, and in the absence of Congress acting to increase the federal gas tax, tolls have become an important source of new revenue.

The International Bridge, Tunnel, and Turnpike Association is an important resource for information on the status of electronic tolling. The reasons for the growth of this industry are found in a June 6, 2019 article in Quora, which states that electronic tolling saves time for drivers, cuts fuel use from waiting at toll booths, enhances the financial transaction, reduces traffic congestion and pollution. The reduced cost of salaries, benefits and pensions for toll collectors is another major consideration in the move to all-electronic tolling. As Stateline reported in a July 24, 2015 article,

“Thirty-four states have toll roads, at least 23 of them are using some type of electronic tolling in combination with a cash payment system. A growing number of states are eliminating toll plazas entirely in some areas and moving to all-electronic systems. At least six—California, Colorado, Florida, Georgia, Massachusetts and Texas—have swapped traditional toll booths for cashless systems on some roads and bridges.”

Many more turnpikes, bridges and tunnels have joined the list since that article was published four years ago.

Chuck Robinson, writing for Landline in August 2019, reported that a benchmarking study by KPMG, one of the big-four global accounting firms, stated, “The key to fiscally efficient toll collecting, cited in the report, is to get rid of toll booths and the people in them. Manual toll collecting, according to the study, costs fifty cents per transaction. On the other hand, electronic toll collecting costs only twenty cents per transaction.

Not all drivers appreciate the convenience of all-electronic tolling. Some express concern that the system allows law enforcement to determine if a driver was speeding, and fear automation of traffic enforcement. Massachusetts and other jurisdictions promised the public that the tolling system would not be used for enforcement. Whether that promise is kept in the future remains to be seen. Other drivers object to the, “Big Brother,” aspect since the system has the potential to reduce drivers’ privacy. However, a major concern of toll operators is that some drivers will seek to avoid payment. Toll evasion occurred even with toll collectors. However, the absence of someone to whom the driver pays the tolls emboldens some drivers—those without transponders or whose transponder account is no longer valid. Leakage by toll evasion is estimated to range from one percent of collections to as much as ten percent.

Anyone involved in toll operations understands the importance of enforcement to a successful toll operation. Given the growing prevalence of ORT and ETC, the challenge is becoming even more acute. Yet many tolling organizations are limited in their ability to identify (let alone collect from) foreign or out-of-state vehicles and most require police support to stop violators. Clearly, there is still much room for improvement. The KPMG benchmark study indicates that about half of the drivers are prosecuted. More instate drivers risk prosecution (60%) as compared to out-of-state or foreign drivers, of which only 37% are prosecuted. Some toll operators believe that the leakage is so small that it is not worth the effort to collect, especially from out-of-state drivers. Reasons for the difficulty in pursuing unpaid tolls are primarily:

  • Insufficient or inaccurate vehicle data – 32%.
  • Lax regulations covering the evasion of tolls – 31%.
  • High cost of collection – 29%.
  • Average revenue loss due to leakage averaging about $8 million annually.

Operators reporting the highest rates of leakage tended to be influenced by either a high volume of out-of-jurisdiction users and lack the ability to charge or prosecute these users or they have made the decision not to prosecute violators at all. Both factors would appear to be unfair to the substantial majority of users who pay the tolls since loss from leakage is calculated in the rates charged.

Toll operators have begun to make greater efforts to collect unpaid tolls, especially from out-of-jurisdiction drivers. Georgia State Road and Tollway Authority (SRTA) has, for the past few years, utilized an outside debt collection service to collect the out-of-state debt. In Georgia, the debt collection company buys the out-of-state toll debt from the SRTA for an upfront payment of its outstanding toll debt. Maryland recently passed similar legislation and others are expected to follow this model.


Author: Richard T. Moore has served in both elective and appointed public office at local, state, and federal levels of government. He served for nearly two decades each in the Massachusetts House and Senate, as well as being chosen as President of the National Conference of State Legislatures. He also served in Washington, DC as Associate Director of FEMA in the Clinton Administration and as a Presidential Elector in 1992. A former college administrator and adjunct assistant professor of government at Bentley University and Bridgewater State University, Mr. Moore is a long-time member of ASPA serving terms as Massachusetts Chapter President and National Council member. His email is: [email protected].

 

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