N.H. official defends discount on E-ZPass

CONCORD, N.H. -- Some lawmakers worry that lost money from discounted E-ZPass transponders will hurt the turnpike system, but Transportation Commissioner Carol Murray said yesterday the system's cash-flow problems predated the startup of E-ZPass.

New Hampshire has sold more than 100,000 of the electronic devices since mid-June, far exceeding expectations, Murray told the Legislature's joint Fiscal Committee.

This means the state is subsidizing the cost of the transponders for more people. Drivers have been paying $5 for each device when the cost to the state is more than $27. The price drivers pay for the transponders is due to go up on Aug. 3. Governor John Lynch and the Executive Council set the $5 price, but the Legislature overruled them. The price will increase as a result.

In addition, the numbers suggest drivers who rarely use the state's toll roads may be buying transponders, she said. That would mean less toll revenue to offset the cost of maintaining the electronic accounts.

The computerized accounts report what has been subtracted for each toll and bill users' credit cards when the balance drops below a given level. Maintaining each E-ZPass account costs about $5 to $6 per month, Murray said.

''You present numbers that are staggering," Salem Senator Chuck Morse said, predicting a financial hole on the order of $4 million just to maintain the accounts.

Murray later said the turnpike system's cash problems predate implementation of E-ZPass.

She said she suspended the system's capital program before E-ZPass was implemented this month because tolls were not producing enough money to pay for the projects. The transponder discount is ''minor money" compared with the system's overall fiscal picture, she said.

Once E-ZPass is fully implemented and a deeper discount on toll tokens ends, the system's fiscal health will brighten, she said. She said the turnaround probably will take two years.

Murray told lawmakers her department deferred work on the Spaulding Turnpike in Rochester until there's a clearer sense of the financial impact of E-ZPass. Her department also has substituted federal money for state funds to continue work on the highway interchange at the Granite Street Bridge in Manchester.

The danger is that insufficient funding for the state turnpike system, which was paid for with bonds, could provoke a reaction from the investors.