Jonathan Peters, Professor of Finance at the College of Staten Island/CUNY (CSI) has recently co-released a study entitled “A Model of the Total Cost of Highway Toll Collection.” In it, Peters contends that the current models of the cost of toll collection does not include the significant environmental cost to society. Peters’ study extends the current models to account for these costs by demonstrating that when pollution costs are ignored, the total cost of toll collection is significantly understated.
Case Study (2000): Garden State Parkway (GSP)
173 miles long, eleven major toll barriers on the main highway plus 20 ramp plazas. Peters and Kramer conclude that for the year 2000, 16,000 tons of pollutants were unnecessarily generated along the GSP, mostly on the northern corridor,
Peters recommends that “economists should not ignore pollution costs when estimating the total cost of toll collection. By examining the pollution costs on the GSP, we show that even without measuring the environmental impact of queuing, pollution costs constitute 20.93% of the Total Societal Cost (TSC) of toll collection, or 8.32% of revenue collected.”
The Peters/Kramer study has used the most conservative numbers possible, such as not including the pollution generated from queuing, and relying on emissions statistics from newer model cars… additionally, the cost and consumption of fuel is not accounted for in the current Peters/Kramer study, and is currently being investigated.
Adding the Administrative costs (capital and labor) Compliance Costs (value of time wasted by consumers under current collection model) and Pollution Costs (decelerating from 60mph to zero and resuming speed) equals 100% of the Total Societal Cost. Net Revenue is not included in the TSC.
Peters’ continues “Whereas with most taxes, Administrative and Compliance costs equal 5-7% of revenue collected, the GSP Administrative and Compliance costs account for 31.43% of the revenue total, or 79.07% of the TSC. These tolls are not only a very expensive tax to collect, they also have a substantial cost to individuals and the environment.”
A U.S. Supreme Court case (Docket #01-1421) seeks review of an original New York Federal District Court action against tolling authorities in Delaware, New York, New Jersey and Maryland. This Supreme Court suit, filed by Kevin McKeown, is aimed at ending the thousands of tons of toxic tailpipe emissions at toll barriers in these states.
Since the Peters/Kramer study is the first in the nation to quantify these emissions on the Garden State Parkway, a request has been made to file a brief in support of the case.
“A Model of the Total Cost of Highway Toll Collection” by Jonathan Peters, Professor of Finance, College of Staten Island/CUNY, and Jonathan Kramer, Professor of Finance, Kutztown University of Pennsylvania.
Jonathan Peters is available for expert commentary.
If you would like to schedule an interview, please contact
Ken Bach, Director of Public Relations for CSI/CUNY at (718) 982-2328.