Thruway Toll Plan to Help Fund $1.9B for Multi-Year Capital Work
By JOHN JORDAN – December 15, 2022
ALBANY—The New York State Thruway Authority Board of Directors approved the start of a process to increase tolls to help finance its ambitious and necessary $1.9-billion 2023-2027 capital plan.
Thruway Authority officials stated that the toll hike, is its first systemwide toll increase since 2010. It is necessitated by an additional nearly $500 million in needed infrastructure work, which is not currently supported by the funding stream of the existing 2022-2026 capital plan.
The vote to move forward starts a “transparent public process” that will take close to a year to facilitate
public discussion on the proposal. In the interim, tolls systemwide will remain frozen throughout 2023.
Matt Hammond, CFO of the New York State Thruway Authority, said that another contributing factor for the need for toll adjustments was the $125 million in decreased revenue collected by the Thruway Authority during the height of COVID in 2020. Directors stated that those funds would have gone directly into the capital program. The revenue decline related to COVID accounted for 17% of revenues collected by the Thruway Authority and was “seven-times greater than anything the Thruway experienced in the last 40 years,” said Mr. Hammond. He later added, “In fact, we are still recovering from that lost ground. The current projection is that revenues will be $240 million lower than what we had forecasted prior to COVID in 2020 through the 2025 period.”
It should be noted that the Thruway Authority was not eligible for any COVID-related funding assistance. The Thruway is a user-fee supported roadway and receives no federal, state, or local tax dollars.
In 2021, Thruway Authority staff conducted a five-year “Needs Assessment” that identified an additional $470 million in capital project needs that are currently not supported by the resources available for the existing 2022-2026 Capital Program. The shortfall is based on the fact that 85% of the Thruway’s roadway base dates back to its original construction, highlighting the need for heavy maintenance, reconstruction, and rehabilitation activities to keep the riding surface in a state of good repair.
The average age of the Thruway’s 815 bridges is 55 years old with 75% of those bridges more than 60 years old. In fact, more than 85 of those bridges have been identified for replacement within the next decade. Thruway officials noted that the need to replace bridges grows exponentially after the 10-year timeline when hundreds of bridges will need to be replaced in the following decade.
They added that the projected replacement cost for the most immediate 85 bridges needing replacement is roughly $800 million in today’s dollars. Factoring the hundreds of bridges that will require replacement not long thereafter, the costs escalate into the $6 billion to $7 billion range which the existing toll rate structure will not support.
Currently, all 27 Thruway service areas are currently being redeveloped as part of a $450-million private investment plan in partnership with Empire State Thruway Partners. Three service areas have reopened: Indian Castle, Chittenango and Junius Ponds, and construction is underway at nine other locations. When the project is completed, 23 of the 27 service area buildings will be rebuilt, with significant renovations and upgrades to the remaining four. Amenities include Taste NY markets, modern restaurant concepts, outdoor seating, food trucks, playgrounds, and pet walking areas, among other things. It should be noted that no Thruway toll dollars or state tax dollars are being used in this initiative.
“The Thruway Authority and its incredible team of employees work hard every day to hold the line on spending and present a balanced budget that ensures the continued viability of the system,” said Thruway Authority Executive Director Matthew J. Driscoll. “As a tolling authority, we receive no federal, state or local tax dollars to support our operations. We have not seen a system-wide toll increase since 2010, and now is the time to move ahead with this financial plan so that we can meet our growing capital investment needs while continuing to provide our customers with the safe and reliable highway they’ve come to expect.”
At the Board session on Dec. 5, Mr. Driscoll announced he was stepping down from his post as of Dec. 21, 2022. He has served as executive director of the New York State Thruway Authority since 2017. See story on page 9 in this edition of CONSTRUCTION NEWS.
During the session, the Thruway Board approved the authority’s proposed $1.2-billion 2023 budget that includes $397 million for operating expenses, $356 million for debt service, $368 million for systemwide capital projects, and nearly $45 million for the
Mario M. Cuomo Bridge and $69 million for reimbursement for New York State Police Troop T costs patrolling the system. Thruway traffic in 2023 is expected to reach 366 million transactions, down 3.0 million transactions or 0.9% from revised 2022 levels. Te Thruway is expected to collect $807 million in toll revenues, down 1.2% or about $10 million from 2022.
The 2023-2007 capital program calls for a total of $1.9 billion in spending, including $1.7 billion in capital projects systemwide. A total of $234 million in projects will be funded for work at the Mario M. Cuomo Bridge.
In 2023, Mr. Hammond stated the authority has shifted approximately $65 million in capital project spending from 2022 to 2023, thus increasing the 2023 capital spending level to approximately $412 million.
Mr. Hammond said that beginning in 2024, toll revenue under the current structure will not meet the Thruway’s funding needs, starting with a more than $2-million deficit, which would balloon up to $117 million by 2026 and $250 million by 2031.
In discussing the toll hike proposal, Mr. Hammond noted to the Board of Directors that the last system-wide toll adjustment, outside of changes to the Mario M. Cuomo Bridge tolls, was in 2010. “Given that the authority receives no federal or state support for our operations, tolls account for 90% of the resources needed to maintain and operate our system,” he said.
Toll Hike Proposals
Cashless tolling has been in effect throughout the Thruway system for more than two years and other toll barriers on the system have been using it since 2016 (for the Gov. Mario M. Cuomo Bridge). Under the pending Thruway Authority proposal, beginning on Jan. 1, 2024, the base NY E-ZPass rate will increase by 5% outside of the Gov. Mario M. Cuomo Bridge, representing the first toll adjustment for these customers since 2010. A second 5% increase would take effect in January 2027. Standard toll rates for Non-NY E-ZPass (currently 5.1 cents per mile for passenger cars) and Tolls by Mail rates (currently 5.8 cents per mile for passenger cars) will increase to 8.6 cents per mile for both groups by 2027. These rates will remain below the current standard rates of many other systems across the nation, Thruway Authority officials noted
Similar adjustments would be made to all rates system-wide (Gov. Mario M. Cuomo Bridge and other fixed rate tolling points) and for the Non-NY E-ZPass and Tolls by Mail commercial rates as well. This change results in toll rates that are comparable with what other cashless tolling facilities charge nationwide. For example, the Massachusetts Turnpike has an 87% differential and the Pennsylvania Turnpike’s differential is 98% for Tolls by Mail passenger toll rates. More importantly, it will increase the incentive for NY E-ZPass usage. Under this plan, the differential will not be applied to NY E-ZPass customers, making it the most affordable payment option available to all of our motorists who sign up for a tag (thruway.ny.gov/getezpass ).
Proposed Increases for the Gov. Mario M. Cuomo Bridge
Beginning on Jan. 1, 2024, the fixed toll rate at the Gov. Mario M. Cuomo Bridge for NY E-ZPass customers will increase by $0.50 each year through 2027. In 2027, the base NY E-ZPass rate for passenger vehicles will be $7.75. Commercial toll rate increases would be proportionate to the passenger rate increases.
In addition, the plan preserves the 40% commuter discount plan and provides a separate 20% resident discount (increased from the current 17% discount) for qualified Rockland and Westchester residents on the span. In 2021, more than 30% of all tolls collected on the GMMCB were discounted through commuter and resident plans.
The Thruway Authority toll proposal will keep its toll rates among the lowest in the country compared to similar toll roads. The Thruway base passenger vehicle toll rate is less than $0.05 per mile, compared to the Ohio Turnpike ($0.06 per mile), the New Jersey Turnpike ($0.11 per mile) and the Pennsylvania Turnpike ($0.14 per mile