21

Jun
2014

Toll Rates and Questionable Studies Supporting Tolling

The Big Business Propaganda Campaign for Tolls

The elites in NKY along with the corporate special interest through the Build Our New Bridge Now Coalition is starting an education campaign to persuade the residents of NKY that (a) a new Brent Spence Bridge is necessary, and (b) tolls are the only way to fund the project (The Big Business Agenda for Tolling, 2014). They seem to feel the residents of NKY are a bunch of backward philistines that aren’t progressive enough to recognize the need for a new bridge, or are willing to concede that tolling is the only financing mechanism available to us. If we are foolish enough to believe them, 63%-65% of NKY commuters who cross the Brent Spence Bridge to work in Cincinnati will end up paying for it.

Their “education” campaign is supposedly designed to clear up any misinformation out there about the project. I just want to reassure my readers that you won’t read any misinformation from this author because I conduct something adults call research, and I cite my sources. Unfortunately for us, I have found through my research that the Enquirer is spoon fed by our locally elected officials, elites, and big businesses in order to forward various agendas.  Tom Wurtz amusingly refers to them as the political country club, but I don't see the humor.  They represent a dark underside to NKY and they set the agenda for us.

One question that keeps popping up is how much the toll rates will be once the use of tolls is established as a funding mechanism for the new bridge. The best estimates for the toll rate will probably come from the proposed rates for the Ohio River Bridges Project in Louisville.

The Ohio River Bridges Project Estimated Toll Rates

The Ohio River Bridges Project involves building a new bridge between Prospect, Ky., and Utica, Ind., the Interstate 65 Kennedy Bridge and a new downtown span next to it. According to a Kentucky highway report, frequent commuters will pay as little as $1 to cross one of the new Ohio River bridges around Louisville, while some truck drivers will pay as much as $12. Don’t get too excited about the prospect of a $1 toll since a prior study conducted by the Ohio and Kentucky Departments of Transportation last year recommended a toll rate between $2-$5 for the new Brent Spence. The highlights of the report can be seen below:

  • Drivers can open prepaid accounts to get the best fare. The account is charged either by reading the transponder from overhead sensors or by snapping a picture of the license plate.
  • Drivers without prepaid accounts pay the highest tolls. Their license plates are photographed and bills are sent to their address.
  • $1 for passenger cars, light trucks and SUVs that make frequent trips across the river and pay with a transponder.
  • $2 for passenger cars with a transponder that cross fewer than 20 times in a month. Other passenger cars would pay $3 if they have an account, but no transponder. Those with no account would pay $4 for each crossing.
  • $5 for box trucks and other medium-sized trucks with a transponder; $6 if those vehicles have a license-plate account; and $7 for those without a prepaid account.
  • $10 for heavy trucks such as tractor-trailers with a transponder; $11 if those vehicles have a license plate account; and $12 if they have no prepaid account.
  • Toll rates would increase 2.5 percent each year (In Louisville, tolls proposed for bridges, 2013).

These are just the proposed rates and could change in the future. The initial rates for the tolled crossings are to be formally set by the Indiana-Kentucky tolling body, a six-member panel that will use the report as a guide.

An important point to make is that an unelected tolling authority is going to be setting the toll rates and will therefore be unaccountable to the commuters who pay those rates. Our locally elected officials will simply pass the blame onto the tolling authority when questioned about the toll rates by their constituents, which is a similar problem we have with our special districts in NKY (Do We Really Need Another Special Taxing District?, 2012). Kentucky State Auditor Adam Edelen should consider adding them to the list of special districts on the Citizen Auditor website.

It’s worthy to mention that businesses over in Southern Indian share the very same concerns regarding tolling as our businesses in Covington. Some Southern Indiana small businesses long have opposed efforts to toll the I-65 bridges, and according to Jeffersonville businessman Wes Johnson the proposed toll rates will “be devastating.”

“Tolling existing infrastructure at that rate is going to devastate businesses in Southern Indiana, I don’t think there’s any question about it,” said Johnson, co-owner of Buckhead Mountain Grill (In Louisville, tolls proposed for bridges, 2013). Covington may want to pay particular attention to how tolling the bridges affect Southern Indiana businesses.

Experts say 2½% - 3% of Bridge Tolls won't be Paid

Using tolls to fund a new Brent Spence will also lead to problems collecting the tolls. Bridge tolls will generate hundreds of millions of dollars for Kentucky and Indiana to pay off debt on the $2.6 billion Ohio River Bridges Project, but hitting those numbers will require high collection rates, according to projections released. Even before the states have hammered out specifics of how the toll system will work, planners assume that within the first 10 years, less than 3 percent of all assessed tolls won’t be paid and, after that, non-payment will drop to less than 2.5 percent (Experts say 2½% - 3% of bridge tolls won't be paid, 2013).

During the toll bridges’ first full year in 2017, about 7 percent of total toll revenue assessed will go uncollected, consultants predict. Those missed tolls include license plates that can’t be recognized, license plates from states that don’t have agreements with Kentucky and Indiana to release the owner’s address and drivers who receive invoices but don’t pay them.

Estimates show that the collection rate will improve over time, and eventually about 2.4 percent of all tolls won’t be paid each year. Russ Romine, executive adviser to Kentucky Transportation Secretary Mike Hancock, said he expects those increases to occur as tolling becomes more prevalent elsewhere and states enter into agreements that aid collection.

Romine declined to say what level of unpaid tolls the state could tolerate and still be able to pay the debt and interest on the downtown part of the bridges project. But he said raising rates won’t be the first option if projections fall short (Experts say 2½% - 3% of bridge tolls won't be paid, 2013).

If raising the toll rates won’t be the first option for meeting the shortfalls in paying the debt obligation due to scofflaws, then what other options are there? It’s been my experience that often governments and special districts take the path of least resistance in meeting their budgets. Do we really believe that raising the rates won’t be their first and easiest option?

Questionable Studies Conducted in Support of Tolling

Recently the NKY Chamber of Commerce presented a study conducted by the University of Kentucky Center for Business and Economic Research regarding the impact of tolls on a new Brent Spence Bridge. The results of the study supposedly demonstrate that the impact of tolls may not be as big a deal as many people fear. The Enquirer goes on to say in fact, most commuters and trucking companies would continue to use Brent Spence as their main route over the Ohio River (Study: Brent Spence tolls may not deter commuters, truckers, 2014). The highlights of the study can be seen below:

  • If tolls are imposed on the bridge, the net impact on commuter traffic would be anywhere from a 2 percent drop to a 1 percent increase. Commuter traffic may actually grow due to the expanded capacity of a new bridge and reconfigured I-75 corridor, and the time that would save drivers.
  • When it comes to trucking, overall traffic would drop by less than 3 percent, though the impact varies by the length of the trip. Short trips may involve avoiding the tolls.
  • A toll would not decimate the region’s retail industry: any decline by Ohioians who opt not to travel to Northern Kentucky to eat, shop or play would be offset by Northern Kentuckians choosing to stay south of the Ohio River to avoid a toll (Study: Brent Spence tolls may not deter commuters, truckers, 2014).

According to the Enquirer, the study relies upon a wide range of publicly-available data and more than four dozen academic sources, including studies of similar projects elsewhere.

Really? If those results are accurate then why did the Value for Money Study conducted by the Ohio Department of Transportation (ODOT) and the Kentucky Transportation Cabinet (KYTC) state that, at $2, the most likely toll, daily volume on the Brent Spence Bridge will drop by more than a third while its capacity doubles? The report specifies that traffic count will drop from 194,000 trips per day to 117,000 while traffic is projected to more than double on every other span (A Bribe for Covington to Support Tolling, 2013).

How is there only going to be a 2% drop in commuter traffic and a 3% drop in truck traffic if the Value for Money Study is predicting a drop of one third in the daily volume? Why were the results of both studies so disparate in their findings? Was the Value for Money Study conducted by ODOT and KYTC flawed or are they lying? One can only speculate that Ohio consumers avoiding a toll would be replaced by KY consumers avoiding a toll, but it would depend on where the business’s patronage is coming from and who has the money to spend. Since the purview of the study falls under the area of expertise of ODOT and KYTC, maybe we should give their results more weight? Maybe one of our smart legislators should ask some of these questions.

What can you do?

In my opinion the results of the study conducted by the University of Kentucky sound too good to be true. Don’t let the business community foist tolling on the commuters of NKY based on studies with specious results. Tolling will have a debilitating effect on NKY’s economy, and once tolling is in place, it will never go away. The 1954 agreement that called for tolls to be eliminated on the Ohio Turnpike by 1984 is still being collected (The Debilitating Effect of Tolls on NKY’s Economy, 2013).

The residents of NKY should reach out to the NKY Chamber of Commerce and let them know what they think about tolling. Their contact information is below:

Name

Phone Number

Email

Trey Grayson, President & CEO

859-578-8800

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Jill Shuller, Executive Director

859-578-8800

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Adam Caswell, Vice President

859-578-6386

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Kevin Donnelly, Manager

859-578-6391

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