Audit Finds Nearly Half Owed by Out-of-State Drivers, Led by NJ and CT
The state’s Thruway Authority has to do a better job of identifying, billing, and collecting tolls and related fees, including $276.3 million it has a collection agency seeking as of March 2023, according to a new audit from State Comptroller Thomas P. DiNapoli.
“This audit has identified ways in which the Thruway can improve its collection of tolls and fees,” DiNapoli said. “Based on the Authority’s response, I’m hopeful action will be taken to implement our recommendations to maximize revenue for the Thruway.”
Tolls and related fees make up more than 90% of the Thruway’s revenue. Ninety percent of toll revenues are from users of E-ZPass with the rest through Tolls by Mail. In 2021, the Thruway collected $804 million from tolls and related fees. Nearly half (43%) of the unpaid tolls and related fees, $119.3 million, is owed by out-of-state drivers. A substantial portion of that money is from vehicles registered in New Jersey ($34.2 million) and Connecticut ($16.7 million).
Vehicle owners get a warning if their E-ZPass account has a negative balance for over 30 days. If no payment is made in the next 30 days, the account is canceled and a $25 fee is charged. If the E-ZPass device isn’t returned another $16 fee is added. Tolls by Mail that aren’t paid in 30 days trigger a warning notice and a $5 fine. If it’s still not paid 30 days later, it is in violation and a $50 fee is added to the invoice. Thirty days after the violation notice, the Thruway can send it to a collection agency.
Lapse in Collections
During the audit period, the Thruway used two collection agencies. When the first vendor’s contract expired Sept. 15, 2020, it returned the uncollected accounts totaling $430 million to the Thruway. This included $14 million in negative balances and $416 million in tolls and related fees.
The second collection agency’s contract took effect January 2021, but the Thruway did not send it any accounts to collect until July, more than nine months after the last contract had expired. Thruway officials said the new vendor needed time to reprogram its system to incorporate revisions in toll violations and that, while there was no collection agency during this time, it continued to collect overdue payment through its in-house customer service employees.
Registration Suspension Program
The Thruway can ask the Department of Motor Vehicles (DMV) to suspend the registration of any in-state passenger vehicles that do not pay tolls, fees, or other charges, if they have three or more violations in five years, and for commercial vehicles, if they owe $200 or more over five years. The Authority has a reciprocity agreement with Massachusetts — it’s only such agreement — to request registration suspensions there.
The Thruway halted the suspension program in January 2018 as cashless tolling was being introduced following negative press and public concerns related to system problems including erroneous billings and excessive fees It resumed the program four-and-a-half years later in July 2022, but has made very limited use of it. Separate from the accounts with the Thruway’s collection agency, auditors found 257,917 past due accounts, owing $288.4 million, that were eligible for suspension.
Of these, 49,740 customers were persistent violators that had outstanding balances every year going back to 2017. Since restarting the program, however, the Thruway has referred 60 or fewer plates per week for suspension and had just two employees assigned to the program.
Rejected License Plate Images
Auditors also found fault with the Thruway’s identification of license plates from the images it takes. The audit sampled 161 images that were rejected and found 11% were identifiable and billable. Auditors also estimated the Thruway missed out on billing an additional $7.2 million in tolls last year based on the number of license plate images that were rejected for reasons, such as being too dark or too bright, that were within the Thruway’s ability to fix.
DiNapoli made several recommendations to the Thruway for improving its identifying, billing and collecting tolls and related revenue to the Thruway, including that it:
- Ensure that there is a smooth transition in any change of collection vendors to avoid gaps in service.
- Establish procedures for dismissing violation fees, including the selection criteria that explain why they are being dismissed and the basis for the amounts.
- Review accounts that are eligible to have their vehicle registration suspended to determine where collection efforts will have the best results, and assess the feasibility of entering into registration suspension agreements with more states in addition to Massachusetts.
- Revise the methodology for selecting accounts to refer to DMV for suspension to target persistent violators and accounts nearing the 6-year statute of limitations.
- Ensure that all images rejected by the automated process that are identifiable manually are billed.
- Monitor trends in the incidences of rejected images and take appropriate corrective actions.
The Comptroller’s Office has another audit of the Thruway Authority’s cashless tolling program that is currently in progress, related to billing accuracy and the Authority’s Office of the Toll Payer Advocate’s handling of consumer complaints.
The Authority agreed with three of the audit’s 11 recommendations. It did not state whether it agreed or disagreed with the others, but indicated an understanding in principle. Its full response is available in the audit.
Audit
New York State Thruway Authority: Selected Aspects of Toll Collections
