Bill in Congress to give US Secretary of Transportation control over toll rates of bridges and tunnels

December 16, 2011

Misbehavior at Port Authority of New York and New Jersey (PANYNJ) has provoked moves in the US Congress to give toll setting powers over bridges and tunnels to the US secretary of transportation. Veteran New Jersey Democrat senator Frank Lautenberg has introduced a "Commuter Protection Act" s2006 which would command that tolls over any bridge or tunnel on a Federal-aid highway (virtually all toll bridges and tunnels) be:

- (1) "just and reasonable"

- (2) "subject to review and regulation" by the US Secretary of Transportation at their own initiative or on complaint.

The bill would have the US Secretary write formal regulations:

- (A) defining the term "just and reasonable"  (J&R) tolls

- (B) establishing a process to determine whether tolls are just and reasonable (J&R)

- (C) to "prescribe, when appropriate," the J&R toll

s2006 also provides for the US Secretary to establish a process for filing complaints about toll rates and to challenge or appeal against the the Secretary's toll rulings.

The Secretary or a designated administrative law judge would consider complaints about toll rates, investigate them, hold hearings, make J&R toll determinations, and allow for appeals against those determinations in US District Court.

Republican Representative Michael Grimm (NY) is sponsoring the same bill in the US House of Representatives.

The bill would place in surface transportation law (ISTEA, SAFTEALU, MAP21, whatever) a requirement for the US Comptroller General to conduct a study for the US Congress of:

(1) evaluating the use of tolls by interstate authorities to maintain and improve surface transportation facilities

(2) recommendations on increasing transparency and accountability of their funding decisions

The last is a response to a controversy over the PANYNJ's double-talk about the reasons for the latest toll increases. First up they were to support all kinds of PANYNJ business including the World Trade Center and other real estate development. In response to criticism of toll money going beyond tunnels, bridges and transit, PANYNJ changed its tune and said the toll monies wouldn't go beyond support of transport facilities.

Firestorm of criticism of take-home pay at PANYNJ

There is a firestorm of criticism in the New Jersey and New York media over huge take-home pay at the PANYNJ with individual pay records being released by the state auditor's office. More recently the authority published its own list.

These lists show many jobs with modest skill requirements like toll collection producing annual pay (wages plus overtime, unused sick and vacation pay) well into the six figures. Many cases are also cited of six figure annual payments to people no longer working at the PANYNJ.

Some employees are cited getting more in overtime pay alone than their salary.

"The working stiff lives large at the PA," says a New York Post report.

Many of the examples cited are outside the Bridges, Tunnels and Terminals division of the PANYNJ, and seem to be worst among PA police.

To assuage the public uproar over the abuses Chris Ward the chief executive of PANYNJ was recently forced out by the governors of New York Andrew Cuomo and New Jersey Chris Christie.  Ward has been replaced for the moment by Patrick Foye, a Cuomo aide.

link to bill details:

some New York Post articles on PANYNJ abuses:

EDITORIAL COMMENT:  because of their slight or diffused accountability multimodal multistate agencies like the PANYNJ tend inexorably to degenerate into cesspools of self-indulgence and corruption at the expense of the public. Senator Lautenberg's proposal in s2006 for a US Comptroller General's investigation and report, and for more transparency is a good one, but the only lasting solutions will come from competitive outsourcing of operations and selling off the viable bits and pieces as investor owned businesses responsible to shareholders, and closing down the non-viable operations.

The main thrust of s2006 - federal toll rate controls - is wrong, and would make things worse, likely much worse.

Superimposing federal price controls on top of state and local control will only obfuscate responsibility and complicate the politics of tolls and add political risk to anyone working or investing there.

Price controls are almost always wrong and counterproductive - taking pricing out of the hands of managers and directors responsible for the overall business and giving it to politicians courting favor with the public and special interests. It's a formula for worsened corruption, irrationality, shortages, and general performance.

It spells more accountability of management to politicians and less accountability to customers.

Politicians at the different levels of government would blame one another for problems, while exploiting the confusion to look after their friends.

With federal officials liable to intervene as well as state and locals it will become more difficult than ever to attract talented people to take senior positions and more expensive and difficult to raise capital.

High bond ratings and low capital costs depend on the insulation of management from political interference.  Bridge and tunnel authorities' debt would be reduced to junk status by the heightened risk of federal intervention on pricing.

"Just and reasonable" prices are nice sounding words but they are arbitrary and subjective in practice. A just and reasonable price is whatever the speaker thinks the price should be.

 If they really made sense we'd have "just and reasonable" prices prescribed by US officials for all goods and services, not just bridge and tunnel tolls.

Markets don't work for efficiency if those managing a business and accountable for the results can be over-ruled on prices by some outside politician or bureaucrat whose position depends on courting favors with this group or that.

Commuters need protection alright, protection from politicians. s2006 would make them more at the mercy of political machinations, more liable to be exploited.

Federal control over bridge and tunnel tolls would introduce new mischief into the business. It's an appalling proposal. The smelly seagull of the PANYNJ logo (top left) has made a godawful mess! - editor.

NOTE: if we get comment from IBTTA we'll be reporting it here.

text of s2006:

TOLLROADSnews 2011-12-16

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