LOUISVILLE, Ky. (WDRB) – When drivers who don’t have a RiverLink account cross the Ohio River toll bridges, they’re sent a bill in the mail.
At times, collecting that money has proved a challenge for the companies hired by Kentucky and Indiana officials to run a system that uses cameras to read license plates and scanners to ping in-car transponders.
One obstacle is that RiverLink operators have yet to crack down on unpaid tolls from out-of-state drivers who aren’t paying. Another is that some states haven’t shared basic information about those vehicles’ owners – like, for example, who they are.
For nearly five years into the Louisville area’s no-toll-booth network, there was scant data on just how much revenue has gone uncollected. But a new study provides the best look to date on the amount of money that isn’t being recouped.
An August consultant’s report shows that 29 percent of those possible revenues weren’t received in 2018-2019, either because drivers didn’t pay or couldn’t be located, their license plates were not accurately read, or they didn’t make enough crossings to trigger a bill.
Known as “leakage” in industry parlance, it is a conservative estimate of the overall amount, since it only applies to tolls charged to drivers without an account and doesn’t factor in glitches with transponders.
In all, RiverLink missed out on $17.3 million out of a total of $59.5 million possible pay-by-plate revenue during the period between July 1, 2018 and June 30, 2019, according to estimates compiled by the Steer Group.
Steer estimated that the bulk of the missed revenue wasn’t even invoiced, suggesting that RiverLink operators didn’t have correct billing or license plate information, or the minimum threshold for mailing a bill wasn’t reached. An invoice is sent after two one-way crossings.
The pay-by-plate leakage rate is nearly three times as high as previous estimates. In a 2016 report Steer predicted there would be a 2 percent leakage rate for transponder-assessed tolls and a 10 percent rate for vehicles without RiverLink accounts during that 12-month period.
The earliest projections, done for Steer by Atkins North America Inc. in 2013, forecasted that RiverLink would have a 4.6 percent rate of uncollected tolls in 2019, or $4.7 million.
“Anytime you have an all-electronic tolling system, there is going to be leakage,” said Mindy Peterson, a RiverLink spokeswoman. “It is a known risk when you have all-electronic tolling, and it's a trade off.”
The “trade off,” she said, is the convenience of drivers not stopping at toll booths and slowing down traffic, she said.
Peterson said the pay-by-plate leakage is “a piece of the piece” of overall revenue. She noted that over the past three fiscal years RiverLink operators have collected payments for more than 82 percent of all crossings on the three tolled spans – the I-65 Lincoln and Kennedy bridges that connect Louisville and Jeffersonville, Ind., and the Lewis and Clark Bridge between Utica, Ind., and Prospect, Ky.
But in terms of raw numbers, RiverLink still is losing out on more than twice as much as the average toll operator, according to a 2019 survey of 65 public and private toll collection systems around the world by KMPG, a consultant that previously monitored RiverLink revenue for Kentucky and Indiana. The average amount? $8 million.
The Alliance for Toll-Free Interstates doesn’t oppose tolls, but it is against adding them to existing toll-free interstates and other roads for reasons that include concerns over toll revenue supporting administrative costs, rather than road improvements.
But toll leakage also is “a real thing,” said Jay Smith, an Alliance spokesman. “It’s one of the main reasons tolls are an inefficient way to fund road construction and maintenance. Add that to the cost of building and operating toll facilities and the amount of money diverted away from actually improving roads quickly adds up.”
For RiverLink, the amount of lost revenue during 2019 came as the toll system was exceeding expectations in its early years of tolling, which began in late 2016. It pulled in $111.8 million during the period measured in the recent study; it had been expected to bring in $96.6 million.
That’s changed during the COVID-19 pandemic and its drastic impact on commuting patterns and daily routines. In both of the last two fiscal years, RiverLink collections have failed to meet their goals. During the most recent period, $103.7 million of tolls were collected – or about 90 percent of the $115.2 million target.
Kentucky and Indiana split toll revenue and use it to cover myriad costs associated with building and operating the bridges. Kentucky, for example, applies its share to debt on construction bonds and accounts for future maintenance and repairs.
Despite the leakage and lower collections overall, Kentucky still is on pace to meet its debt obligations. But Steer predicts leakage rates will remain constant in the years to come, raising questions about how much money will the states miss out on in the future.
Peterson said the states are taking steps to try to reduce those losses. They include a new toll collection firm, Texas-based Electronic Transaction Consultants, that was hired this year and will be in place by 2023.
Among other things, she said, the states also are developing changes to the main rules that govern toll collection; upgrades to both states’ motor vehicle systems that will allow for improved registration lookups; and efforts to get more drivers to use transponders.
About 64 percent of all RiverLink transactions were from accounts with transponders during the most recent year, down from nearly 67 percent in 2020, according to the Steer study. Those rates have lagged behind projections.
Collecting from out-of-state drivers has been a challenge for RiverLink officials. At the start of tolling, the states pledged to pursue interstate compacts with other states – a move aimed at collecting from toll scofflaws and getting more consistent information about drivers.
But they are now focused on “testing and progress” on a national approach introduced in 2012, according to responses to questions submitted by WDRB News. That plan would let toll agencies recognize different transponders and could create enforcement pacts across state lines.
For now, RiverLink can penalize drivers who live in Kentucky and Indiana who don’t pay tolls by freezing their vehicle registrations. But it must rely on residents of other states paying what they owe without consequence.
Toll industry experts working on a national “interoperability” plan have proposed creating regional hubs of toll networks that can share information about drivers in each state, said Mark Muriello, policy and government affairs director for the International Bridge, Tunnel & Turnpike Association.
They’re also looking at ways to tackle enforcement across state lines, which Muriello acknowledged is a “major” issue for toll operators. There are just two examples of multistate compacts that let a state enforce toll violations in other states: Massachusetts, Maine and New Hampshire; and Massachusetts and New York.
“There have been efforts to try to kind of duplicate that type of arrangement elsewhere in the country,” he said. “But it's been challenging because it requires lots of manipulation and changes to state legislation.”
Copyright 2021 WDRB Media. All rights reserved.