How New York's Toll System Got Completely Busted
On Sunday, tolls at the bridges and tunnels managed by the Port Authority of New York and New Jersey went up again — the third of five scheduled hikes in as many years. The peak E-ZPass fee is now up to $11. A commuter who drives through one of these tolls every work day will fork over nearly $3,000 a year.
Driving in and around New York City is expensive, and it should be. The city has enormous amounts of traffic and a great public transit system. High tolls can help keep a transportation network balanced, efficient, and equitable.
The problem, says finance scholar Jonathan Peters of the College of Staten Island, is that right now New York City tolls accomplish none of these goals. They aren't coordinated to reduce traffic or encourage transit, and they aren't priced to help low-income residents or local businesses. Instead, he says, the tolls pad the pockets of agencies losing money in other areas.
"You want the network to function as best it can," says Peters. "Tolling is not helping us manage congestion. It's not helping us to be a more livable city. That's the worst part of it."
Peters's calculations show just how outrageous tolling in New York City has become. He combed through public reports of Port Authority and the Metropolitan Transportation Authority and found that, in 2011, the agencies generated $1 billion and $1.5 billion in toll revenue respectively. (In addition to road tolls, Port Authority manages the PATH transit system and the World Trade Center site, and the MTA manages the city's subway system and the Metro North and Long Island Railroad commuter trains.)
Peters compared this $2.5 billion with the latest Federal Highway Administration figures, which put national toll revenue for 2011 at nearly $11.8 billion. That means roughly a fifth of all tolls across the country for that year — 21 percent — were paid in metropolitan New York. When Peters expanded his boundaries to include a 40-mile radius of Manhattan, capturing the New Jersey Turnpike and other tolls, New York became responsible for about a quarter of all U.S. tolls.
"Nobody thinks about it," he says. "It's very problematic, because certain parts of the city are being driven uncompetitive. It's making it harder for people to live."
Striking as those numbers are, the problem really begins with the finer details. For one thing, the toll rates are set far above operating costs. According to Peters's calculations, the MTA made a 76 percent profit on bridges and tunnels in 2011 (with $359 million in costs), while Port Authority turned a 47 percent profit (with $554 million in costs). That smacks of "rent-seeking" on the part of those agencies, says Peters, which lose money on their other ventures and often find themselves in financial trouble.
Peters is also irked by the fact that Staten Island is hit worse than other parts of the city. The Goethals Bridge and Outerbridge Crossing, which connect Staten Island to New Jersey, each made a 65 percent profit for Port Authority in 2011. Meanwhile, the Verrazano Narrows Bridge, which links Staten Island to Brooklyn, made a 76 percent profit for the MTA. Altogether, Staten Island bridge tolls generated $600 million in 2011 — 5 percent of the U.S. total for a single county.
That situation is "patently unfair," says Peters, because the tolling authorities that benefit from this revenue don't provide Staten Island with any transit alternatives in these corridors. There are no free bridges or commuter trains connecting the borough to other parts of the city. In a sense, says Peters, Staten Island drivers are forced to subsidize the costs of transporting people on other parts of the MTA and Port Authority systems.
"Is it a user fee or is it a tax? That's the big question that floats around," he says. "My argument is, in New York City, these are clearly taxes. I don't have any alternative routes, and price is way above the cost of providing the service."
That burden falls heaviest on low-income residents and small businesses. On the Verrazano Bridge, for instance, about 14 percent of tolls are paid by bridge users making less than $30,000 a year. By contrast, in the Midtown Queens Tunnel, only 7 percent of toll-payers fall into that income bracket. Peters believes that's because drivers have free or cheaper options in midtown, whereas the Verrazano is a "monopoly" toll corridor.
In a larger sense, the toll problems affect all New Yorkers by failing to distribute traffic across the transportation network. Peters offers a simple example from his own travels: cars routinely jam up the free Brooklyn Bridge instead of using the tolled Brooklyn-Battery Tunnel. The very existence of free bridges onto Manhattan along strong transit corridors encourages people onto the roads.
Others have recognized the need for improvement. Local transport guru "Gridlock" Sam Schwartz has pushed for an equitable tolling plan: charge tolls on all city bridges and adjust rates across the system based on traffic flow. Peters says he'd begin by bringing tolls closer to costs and pushing transit agencies to find more sustainable funding mechanisms over the long term. At the very least, he says, there should be a broader tolling plan in place.
"You want to think and coordinate this, and right now it's not," says Peters. "It's run by these agencies without a clear regional objective. That's the real tragedy."
Top image: spirit of america /Shutterstock.com