07.01.08

Going “Cashless” Will Cost Us All

Posted in Around The State, Bad Government Republicans, Central Texas, Commentary, Road Issues, Williamson County at 10:51 am by wcnews

Last week the Central Texas Regional Mobility Authority (CTRMA) announced it’s victory over cash. Here’s the press release, 183A Toll Road to Go Cashless [.pdf].

Today the Central Texas Regional Mobility Authority Board of Directors voted to approve the elimination of cash toll collection on its 183A toll road by the end of 2008. The decision is expected to save the agency more than $1 million annually in operating costs.

[...]

Toll agencies across the nation are anxious to adopt all-electronic cashless toll collection because it has a wide range of benefits beyond cost savings.

Woo hoo, this decision is going to save the taxpayers/toll payers $1 million. No so fast. As KEYE’s report points out.

The Central Texas Regional Mobility Authority (CTRMA) says it expects to save at least one million dollars a year after the change.

[...]

The cashless road conversion will also allow the CTRMA greater flexibility in raising fees at lower increments instead of the usual twenty-five cents jump in tolls.

According to Pustelnyk, there are no immediate toll increases planned to coincide with the 2009 switchover.

What? They’re saving a $1 million, why would there be a toll increase? I’m not buying their insane logic and supposed good news. The key part in the above excerpt is that the “cashless” tolls will make it much easier to nickel-and-dime us instead of the board having to justify a quarter raise in the tolls each time.

But as an MIT report points out there’s much more sinister reason for cashless tolling, Toll Transponders Hide Cost of Tolling. The supposed “cost savings” never seem to make the tolls go down.

Electronic transponders offer toll road operators an effective means of disguising toll hikes, according to Massachusetts Institute of Technology economist Amy Finkelstein. Her study, published last December, showed how the E-ZPass system creates what she described as an “EZ-Tax.”

“I find robust evidence that toll rates increase following the adoption of electronic toll collection,” Professor Finkelstein wrote.

Economic theorists from John Stuart Mill to James Buchanan have argued that disguising the true price of government activity fuels government growth far beyond a level that would be acceptable to an informed citizenry. Finkelstein used electronic toll collection to test this public choice theory against real economic data.

[...]

“The primary finding is that electronic toll collection drivers are much less aware of tolls than cash drivers,” Finkelstein wrote. “This suggests that they are likely to be less (rather than more) responsive in their driving behavior to toll changes.”

The finding is at odds with one of the main arguments in favor of congestion pricing. Namely, that drivers will adapt their driving behavior as the toll price changes to match levels of congestion.

The study looked next at toll collection records from 123 roads located throughout the US, with each road provided an average of fifty years’ worth of data. Finkelstein noticed that adoption of electronic tolling methods increased, so did rates. Specifically, when transponder usage hit the 60 percent mark, toll rates skyrocketed between 20 and 40 percent over what they would have been in a fully manual toll collection system, despite the lower operational costs involved.

Finkelstein’s data also show that cash toll hikes were 75 percent lower during state election years. She suggested that this is the case because drivers paying in cash know when they are being hit and operators are reluctant to impose an extra financial burden during a period when lawmakers are most responsive to the public. Operators have no such worry with transponders, as the data show no slowdown in electronic toll hikes during election season.

Finkelstein concluded by suggesting topics for further inquiry.

“Evidence on what is done with the extra revenue from the higher tolls — in particular, whether it is used for purposes that may be valued by users of the facility such infrastructure investment or reductions in other highways fees, or whether it primarily serves to increase rents for the governing authority through increased employment or salaries of bureaucrats — could shed some light on the normative implications of the higher tolls under electronic toll collection,” Finkelstein wrote. “Unfortunately, the available data are not sufficient for analysis of this issue.”

That’s right folks. The “free-market” conservatives have setup a system of hidden tax increases that is “disguising the true price of government activity [and] fuels government growth far beyond a level that would be acceptable to an informed citizenry”. A citizenry who beyond a few blogs is not informed about how much more expensive tolls are than raising the gas tax. Click here to get the full report.

What the unaccountable CTRMA will be doing from now on is raising tolls on their roads in board meetings. They’ll do it in small increments, nickels and dimes, and hope that no one will notice until it is much too late. Happy motoring!

I’ll leave you with a quote from John Stuart Mill:

I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it.

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