MASSACHUSETTS TURNPIKE AUTHORITY - TOLL EQUITY WORKING GROUP

EQUITY ISSUES, OPTIONS AND JUNE 2008 REPORT EXPECTATIONS

AGENDA Commuters paying fair share | Proportion of tolls | Tolls being diverted | 'Double tax' for commuters

Equity Issue	Options for Addressing Equity Issue	Initiative Type	Required Analysis	June Report
(1) Interchanges 1-6: 51-Mile Toll-Free Zone for Passenger Cars	(a) Reinstate Int. 1-6 tolls for all passenger cars - reverting back to 1996 toll rates and structure.	MTA Board (Toll Policy)	Traffic Engineer: Estimated revenue and traffic impact from reinstated toll at 1996 rates.	Overview & Prelim. Financial Analysis
	(b) Reinstate Int. 1-6 tolls for passenger cars, except for those who pay via FAST LANE - i.e., only those who pay with cash (requiring collector) or E-ZPass will pay the toll.	MTA Board (Toll Policy)	Traffic Engineer: Estimated revenue and traffic impact from Int. 1-6 cash/E-ZPass toll, as well as potential increase in FAST LANE usage.	Overview & Prelim. Financial Analysis
	(c) Maintain Int. 1-6 toll-free zone for cars, but establish toll at Int. 1. All toll transactions starting or ending at Int. 1 would pay the toll.	MTA Board (Toll Policy)	Traffic Engineer: Estimated revenue and traffic impact from Int. 1 toll at various toll rates (including potential traffic diversions).	Overview & Prelim. Financial Analysis
(2) WT Toll Rates: No Increase Since 1990	(a) WT toll increase for all vehicle classes - possibly to reflect cost inflation since last toll increase in 1990, or to be more in line with other toll roads.	MTA Board (Toll Policy)	Financial Advisor: Cost inflation since March 1990. Traffic Engineer: Compare WT per mile cost to other toll roads; revenue and traffic impacts of toll increase.	Overview & Prelim. Financial Analysis
	(b) WT toll increase for commercial vehicles only - possibly to reflect cost inflation since last toll increase in 1990, or adjusting toll structure (e.g., "N-1") for WT ticket system.	MTA Board (Toll Policy)	Financial Advisor: Cost inflation since March 1990. Traffic Engineer: Compare WT per mile truck cost to other toll roads; revenue and traffic impacts of commercial increase/other tolling options.	Overview & Prelim. Financial Analysis
(3) Interchange 16 (W. Newton): Toll-Free Zone within MHS	(a) Reinstate Int. 16 toll using traditional toll plaza (with both manual toll collection and FAST LANE payment).	MTA Board (Toll Policy)	Traffic Engineer: Traffic and revenue impacts (at Int. 15, 16, 17). MassPike: Cost of constructing and operating toll booths; review 2003 legislation and report regarding Int. 16 toll.	Overview & Prelim. Financial Analysis
	(b) Reinstate Int. 16 toll as a cashless toll plaza under an "open road tolling" pilot program - e.g., license plate billing if no transponder.	MTA Board (Toll Policy)	Traffic Engineer: Traffic and revenue impacts (at Int. 15, 16, 17), as well as "cashless" policy options, pros/cons. MassPike: One-time and annual operating costs; review 2003 legislation/report.	Overview & Prelim. Financial Analysis
(4) I-90 Extension: Toll-Free Between I-93 and South Boston	(a) Seek legislative change to expand "contract assistance" to include I-90 Extension O&M costs - in total, or proportional to the percentage of traffic that uses it toll-free (and to reimburse full expense of I-93 portion of MHS).	Legislative Change Required	Traffic Engineer: Determine percentage of I-90 Ext. traffic that does not pay a toll (as well as TWT EB/WB splits for free EB travel). MassPike: Estimate annual O&M cost for I-90 Extension.	Overview & Prelim. Financial Analysis
	(b) Explore tolling options for Haul Road and other roadways/ramps that access I-90 Extension.	MTA Board (Toll Policy)	Traffic Engineer: Initiate traffic counts, offer tolling options, traffic and revenue impacts at various toll rates (including diversions). MassPike: One-time and annual operating costs for toll plazas.	Overview & Prelim. Financial Analysis
(5) Boston Resident Discount: 40-Cent Tunnel Toll for Residents	(a) Seek legislative change to modify level of discount for Boston residents and incorporate an adjustment for any future toll increases (e.g., a percentage discount, as opposed to flat rate toll).	Legislative Change Required	Traffic Engineer: Compare to other toll agency "resident discount" programs. Traffic and revenue impacts at various discount rates, based on elasticity assumptions.	Overview & Prelim. Financial Analysis
	(b) Seek State funding for any legislatively mandated toll discount programs, including Boston Resident Discount and FAST LANE Discount Program (e.g., "Tollpayer Equity Fund").	Legislative Change Required	Traffic Engineer: Estimate the annual (2008) cost of the Resident Discount and FAST LANE Discount Programs. MassPike/EOT: Discuss "Tollpayer Equity Fund" and identify potential sources.	Overview & Prelim. Financial Analysis
	(c) Strengthen enforcement measures for discount program to minimize abuse and fraud - e.g., annual registration, field audits, increased penalty for misuse (some recently implemented).	MTA Internal Controls	MassPike: Document actions taken/ further steps and options for strengthening enforcement; note audit findings, any resulting reduction in number of Boston Resident accounts/tags.	Discussion of Ongoing MTA Initiatives
(6) Carpool Program: Steep Discounts & Enforcement Issues	(a) Revisit MassPike policies relative to carpool program; including zones, rates and enforcement.	MTA Board (Toll Policy) & Internal Controls	MassPike/Traffic Engineer: Review current polices, estimate program cost, discuss enforcement issues and offer possible alternatives.	Overview & Prelim. Financial Analysis
(7) Commercial Vehicle Rates: May Not be Proportional to Roadway Impacts	(a) Increase MHS commercial rates on Boston Extension and/or Tunnels (e.g., higher per-axle fee than for cars).	MTA Board (Toll Policy)	Traffic Engineer: Compare Tunnel tolls to other toll bridges and tunnels; review traffic and revenue impacts at various rates for both Extension and Tunnels.	Discussion of Issues, Other Agency Toll Rates
	(b) Modify commercial rate structure on MHS (e.g., "N-1" structure, congestion pricing, review toll policy for 2-axle commercial vehicles).	MTA Board (Toll Policy)	Traffic Engineer: Propose tolling options and estimate revenue impacts under different scenarios. MassPike: Comment on toll audit issues/concerns under different structure.	Overview & Prelim. Financial Analysis
(8) Non-Revenue Privileges for Various Users	(a) Revisit non-revenue policy for employees, retirees and others who receive privilege either through legislation, collective bargaining agreement or MassPike policy.	MTA Board (Toll Policy)	MassPike: Document all non-revenue privileges for various user groups, estimate dollar value, and explain reasons and any restrictions for changing policy.	Discussion of Issues, Initiatives and Challenges
(9) Turnpike/Tunnel Users are Only Commuters in State Required to Pay Tolls	(a) Discuss revenue sources for State transportation programs and equity issues concerning "user fee" model for toll roads (for both tollpayers and non-tollpayers).	State Policy Issue	MassPike: Discuss how transportation dollars are generated and allocated within Massachusetts, for both tolled and toll-free highways, as well as impact on those who do pay tolls.	Discussion of Issues, Pros & Cons

Equity Issue	Options for Addressing Equity Issue	Initiative Type	Required Analysis	June Report
(1) WT Commuters Pay Nothing for CA/T; Rte. 128 an Arbitrary Boundary	(a) Review issues associated with extending or contracting MHS boundary, spreading out the MHS toll increases among additional commuters, or creating an additional cost center.	Legislative and Bond Covenant	MassPike: List legislative and bond covenant issues/restrictions associated with shifting MHS boundary; discuss financial impact on WT if implemented.	Discussion of Issues, Pros & Cons
	(b) Increase WT toll revenues (e.g., Int. 1-6, WT toll increase) and use annual surplus to help provide toll relief to WT/MHS commuters (e.g., funding Int. 15 FAST LANE discount).	Legislative and Bond Covenant	Traffic Engineer: Estimate potential WT revenue increases from various WT toll initiatives, listed above. MassPike: Discuss issues associated with using WT surplus for MHS toll relief (e.g., Int. 15 discount).	Discussion of Issues, Pros & Cons
(2) MHS Commuters' Tolls Not Proportional to CA/T-Related Benefits/Costs/Value	(a) Develop tolling strategy where MHS toll rates are more proportional to CA/T traffic benefits; e.g., highest at Tunnels, less at Allston/Brighton and even less at Int. 15 (Weston).	MTA Board (Toll Policy)	MassPike/Traffic Engineer: Discuss CA/T traffic/other benefits for various MHS commuters (e.g., time savings, access to Logan); "allocate" benefits among MHS tollpayers.	Initial Discussion; Analysis Pending MHS Rev. Needs
	(b) Develop tolling strategy where MHS tolls pay for the debt service, O&M and capital costs of the roadway segments they fund - e.g., Route 128 to Int. 17, Int. 17 to I-93, Tunnels (including I-90 Ext.).	MTA Board (Toll Policy)	MassPike: Allocate debt service, O&M and capital costs among MHS roadway segments, as well as non-toll revenues. Traffic Engineer: Calculate toll rates required to fund the difference.	Initial Discussion; Analysis Pending MHS Rev. Needs
	(c) Develop tolling strategy where MHS tolls for the various roadway segments (e.g., Route 128 to Int. 17, Int. 17 to I-93, Tunnels) are more proportional to roadway/asset values.	MTA Board (Toll Policy)	MassPike: Based on insurance coverage, calculate value of the various MHS roadway segments and allocate toll revenue proportionately. Traffic Engineer: Calculate resulting toll rates.	Initial Discussion; Analysis Pending MHS Rev. Needs
(3) I-93 Commuters Who Directly Benefit from CA/T Pay Nothing	(a) Explain I-93 construction funding - from Federal/State funds (not MHS tolls); discuss issues associated with tolling I-93 and/or creating "HOT Lane" (e.g., FHWA opportunities, restrictions).	State Policy and FHWA Issues	MassPike: Discuss funding sources for I-93. MassPike/EOT: Discuss issues/restrictions with tolling Interstates, including what toll revenues need to be used for under FHWA agreement.	Discussion of Issues, Options & Challenges
	(b) Identify potential funding sources from users of non-tolled I-93/CANA, and Tobin, to help fund O&M costs above $25M reimbursement cap - so MHS tollpayer subsidy not needed in future.	State Policy Issue	MassPike: Calculate contract assistance deficit (costs over $25M). Discuss potential revenue sources for a State "Tollpayer Equity Fund," with focus on users of non-tolled I-93 and CANA.	Discussion of Issues & Potential Funding Options
(4) It Costs More to Commute into Boston via Boston Ext. than through Tunnels	(a) Review MHS tolling options so that daily commuting cost is more equitable from all directions, whether using Boston Extension, Tobin or Tunnels. (Compare tolls and mass transit costs as well.)	MTA Board (Toll Policy)	Traffic Engineer: Review various MHS tolling options where commuting cost is equal from west (Extension) and east (Tunnels). Compare mass transit costs from various communities.	Initial Discussion; Analysis Pending MHS Rev. Needs

Equity Issue	Options for Addressing Equity Issue	Initiative Type	Required Analysis	June Report
(1) MHS Tollpayers Are Paying for Major Share of Entire CA/T Project	(a) Explain CA/T funding - e.g., that I-93 construction funded 100% from Federal/State funds (no tolls), that MassPike only paid 12% of total CA/T cost and about 27% of I-90 Extension/TWT cost.	Discussion Item Only	MassPike: Discuss CA/T financing plan for I-93 and I-90 facilities, showing funding sources for each segment; identify MassPike funding sources for its share (e.g., bonds, real estate, tolls, reserves).	Discussion of Funding Plan and MTA Impact
(2) MHS Tollpayers Paying O&M for Non-Tolled I-93/ CANA (over $25M)	(a) Eliminate legislated $25M cap on State contract assistance; or increase cap to reflect current costs and adjust annually for inflation.	Legislative Change Required	MassPike: Estimate annual O&M costs for I-93/CANA (2008-2039), showing annual amount (over $25M) which will need to be funded by tollpayers. Discuss possible alternative funding sources.	Overview & Prelim. Financial Analysis
	(b) Create a "Tollpayer Equity Fund" from which the State can pay all O&M costs for non-tolled CA/T roadways (e.g., I-93, CANA, portion of I-90 Extension for which no toll is paid).	Legislative Change Required	MassPike/EOT: Discuss concept of "Tollpayer Equity Fund" and identify potential funding sources.	Overview & Prelim. Financial Analysis
(3) MHS Tollpayers Will be Funding Future CA/TCapital Needs	(a) Develop a plan where State is responsible for funding capital needs for all non-tolled facilities (e.g., I-93, CANA), leveraging Federal funds and State bonding capacity - i.e., no tolls.	Legislative Change Required	MassPike: Estimate annual capital costs for I-93/CANA (2008-2039), showing amount that tollpayers may need to fund in future. Discuss alternative funding sources.	Overview & Prelim. Financial Analysis
(4) MHS Tollpayers Funding Greenway Costs	(a) Identify alternative funding source for Conservancy staffing (2008) and Greenway park maintenance (through 2012).	Legislative Change Required	MassPike: Estimate annual costs relative to Greenway (2008-2012) and identify alternative funding sources.	Overview & Prelim. Financial Analysis
(5) MHS Tollpayers Funding Tourism Grants and Legislated Discount Programs	(a) Amend legislation to eliminate MassPike funding of tourism grant programs.	Legislative Change Required	MassPike: Show annual WT and MHS savings if tourism grant programs eliminated.	Overview & Prelim. Financial Analysis
	(b) Create a "Tollpayer Equity Fund" from which the State can pay for any legislated programs, including tourism grants and toll discounts.	Legislative Change Required	Traffic Engineer: Estimate 2008 cost of legislated Boston Resident and FAST LANE discount programs. MassPike: Identify potential funding sources for "Tollpayer Equity Fund."	Overview & Prelim. Financial Analysis
(6) MHS Tollpayers Subsidizing Parking Discounts	(a) Revisit discounted Parcel 7 Garage parking rates to increase MHS non-toll revenues.	MTA Board (Policy Issue)	MassPike: Estimate annual cost of discounted Parcel 7 garage parking; present alternatives with potential revenue increases.	Discussion of Issues and MTA Options
(7) Other Uses of Toll Funds Not Directly Benefitting Commuters	(a) Discuss other uses of toll revenues in recent years that did not directly benefit commuters (e.g., donations, grants).	MTA Board (Policy Issue)	MassPike: Calculate the amount of revenues that have been spent on programs in recent years that did not directly benefit the Turnpike operation or commuters (e.g., donations, tourism grants, Greenway).	Overview & Prelim. Financial Analysis

Equity Issue	Options for Addressing Equity Issue	Initiative Type	Required Analysis	June Report
(1)Tollpayers "Double-Taxed" for Use of Turnpike - Paying Both Tolls and Gas Tax	(a) Amend legislation and administrative requirements to provide more equitable gas tax refund for Turnpike commuters - e.g., by eliminating 5% use tax and "3-day rule," particularly for FAST LANE users.	Legislative Change Required	MassPike: Show annual amount of rebate that Turnpike commuters from various communities would be eligible for. Estimate potential cost to Commonwealth.	Overview & Prelim. Financial Analysis
	(b) Streamline application process to reduce administrative burden on tollpayers - e.g., using FAST LANE statements, no submission of gas receipts, simplified form.	State Policy Issue	MassPike: Make recommendations for streamlined process, using FAST LANE statements.	Discussion of Issues & MTA-DOR Options
	(c) Expand the "commuter tax deduction" for State income tax purposes to provide greater benefit for tollpayers (which is currently limited to about $32 per person).	Legislative Change Required	MassPike: Make recommendations for expanded "commuter tax deduction" to provide greater relief for tollpayers. Estimate potential cost to State.	Discussion of Issues & Potential Tollpayer Benefits

POLICY DEVELOPMENT MATERIAL - This document has been prepared for discussion purposes only, without the endorsement of the Toll Equity Working Group or the Massachusetts Turnpike Authority to any particular position, idea, or suggestion. The Turnpike Authority remains committed to instituting reforms and cost-cutting before considering any form of new revenue. The Turnpike staff believe any steps towards reform that address the equity issue should take precedence over any revenue-related reforms.