Memo of Opposition – “Toll Payer Protection Act”

MEMO OF OPPOSITION

S3587-C (Comrie) /A3801-A (Abinanti)

The “toll payer protection act”

December 15, 2022

TITLE OF BILL
An act to amend the public authorities law, in relation to enacting the “toll payer protection act”; and providing for the repeal of certain provisions upon expiration thereof

SUMMARY OF PROVISIONS
Section 1 of the bill establishes the “toll payer protection act”.

Section 2 designates section 2985 of public authorities law as title 11-A of article 9 of such law.

Section 3 amends public authorities law to add new sections that:
– Set parameters for cashless tolling programs, including requirements for toll liability notification, customer education, display of tolls on signage, debt collection procedures, reporting requirements, among others.
– Cap the penalty that may be assessed for non-payment of tolls at $5 after 30 days and the greater of $25 or double the unpaid toll after 60 days.
– Allow toll customers to contest tolls or any toll violations, among other provisions.

Section 4 requires the Triborough Bridge and Tunnel Authority to implement an amnesty program for any person who owes tolls, fees, fines, or penalties for a toll incurred at any cashless tolling facility operated by the authority for a period of at least five weeks for toll obligations incurred on or after November 1, 2016.

Section 5 states that the act shall take effect on the 120th day after the bill becomes law, and expire 5 years after the effective day.

STATEMENT OF OPPOSITION
Reinvent Albany urges Governor Hochul to veto S3587-C/A3801-A, which establishes the toll payer protection act. We oppose this legislation because it will constrain the ability of tolling authorities to collect tolls and penalties for nonpayment.

The bill requires that tolling authorities bill drivers within 30 days, and if the authority fails to do so, the driver is not liable for tolls. Some tolling authorities, however, take longer than 30 days to bill drivers. For instance, the Thruway Authority’s own website states that it sends bills within 30-40 days.

More than 90 percent of MTA and Thruway Authority tolls are paid by EZ-Pass and have accounts that are automatically replenished by credit card. This bill appears to be an attempt to reduce the time it takes tolling authorities to bill by mail the roughly 10% of motorists on the state’s “cashless tolling” systems that do not have EZ-Pass. However, tolling authorities know they make more money by billing quicker because of the time value of money, a rule of basic finance that says a dollar in hand is worth more than a dollar in the future. We believe this bill will deprive public transit, roads and bridges of tolls without providing a commensurate public benefit. Broadly, it is not clear to us why receiving a toll bill by mail in say 29 days instead of 39 days would be meaningful to many potential toll payers.

The bill would codify the current $5 late fee for nonpayments after 30 days and reduce the penalty for nonpayments after 60 days, which is currently $50. We strongly agree with the Citizens Budget Commission and veto memos for previous versions of this bill that lowering the late fee to such a nominal amount would impede a tolling authority’s enforcement ability.

Section 4 of this bill, which creates an “amnesty program” for any driver who owes tolls, fees, fines, or penalties to the Triborough Bridge and Tunnel Authority, is particularly programmatic. In particular, there is no fiscal impact analysis accompanying this bill and thus no way to know what the fiscal impact would be to MTA Bridges and Tunnels. Further, granting amnesty for drivers who fail to pay their tolls would set a bad and unfair precedent; if drivers believe their liabilities may eventually be cleared, what’s the point in paying a toll? Those who do not pay subway fares may be subject to $100 fines under the MTA Code of Conduct, with no amnesty program.

Toll revenues are a smart and effective way to fund and finance the highways, bridges, tunnels, and transit operations that are so important to our state’s economy. For instance, MTA Bridges and Tunnels relies on strong toll receipts to support operations and the capital plan for bridges, tunnels, and transit. In 2023, it is projected that toll revenue will be a whopping 13% of the MTA’s operating budget, or $2.4 billion dollars. For transit specifically, the bridges and tunnels operating surplus transfer is $1 billion.

Broadly, it is troubling that this bill does not include a fiscal impact statement that estimates reductions in tolls and penalty revenues. The MTA is facing a “fiscal cliff,” with large projected deficits once federal COVID-19 emergency aid runs out, and there is no estimate showing how much worse the deficit would be if the Toll Payer Protection Act is signed into law. To pass a bill without knowing how much revenue would be lost at this crucial time is nonsensical. To sign it would be even worse.

We urge Governor Hochul to veto this bill.