The New E-Z Tax

By Rocky Lopes.

The Maryland Transportation Authority (MdTA) governing board voted on January 29, 2009, to impose cost-recovery fees for the Maryland E-ZPass system and increased tolls for certain classes of vehicles. As a casual user of E-ZPass, this caused me and many other Marylanders to become upset. The main issue that bothered many of us is that Maryland has now imposed the highest fees of any state that participates in the E-ZPass compact: $1.50 “account maintenance charge” assessed each month ($18/year), whether or not you use it, starting on July 1. (A state-by-state comparison is here).

The themes that many who are angry about this decision seem to agree on include:

1) The MdTA is an independent agency, governed by nine people appointed by the Governor; the Maryland General Assembly has no authority over any decisions made.

2) The MdTA had a comment period open about the new fee structure, but it was not widely publicized and seemed already to be a “done-deal” since I received a pre-written email defending their decision before the governing body met to formally consider it.

3) The word “fee” is just the same as another three-letter word, “tax.” Charge a fee or charge a tax; regardless, it comes out of the pockets of the taxpayers. But because it is a “fee,” the MdTA can impose it without legislative review. To many, this is a sneaky way to impose a tax.

Comments on articles written in several newspapers in the Baltimore and Washington Metro areas, as well as Red Maryland, indicate many Marylanders feel the same way.

E-ZPass offers a convenient way to bypass lines to pay tolls by cash in 13 states. Quoting from the Maryland’s EZ-Pass page, “with E-ZPass, you don’t need to worry about finding correct change for tolls or waiting in traffic! This convenient technology lets drivers pay their fees in advance and bypass toll station bottlenecks.”

Not only does E-ZPass offer a convenient method to get through toll plazas quickly, I have heard many elected officials in our state extol the virtues that using electronic toll collection methods reduces air pollution because cars aren’t idling in long lines wasting fuel.

The MdTA states on its website that the Chairman and eight Members of the Authority approved a cost-recovery initiative expected to generate approximately $60 million annually. It does not seem to be that the MdTA’s Governing Board really had a clue about how many of us will return our E-ZPass transponders to the state and close our accounts to avoid paying a nuisance tax, when we can get the same service from another participating state for free or for a far lower cost. I firmly believe this decision will backfire on them and our state, and not produce the projected revenues that they envisioned. I know that I am not alone in planning to return my Maryland E-ZPasses before the fees kick in on July 1.

The following is from an email that I received from someone at the MdTA writing for Ron Freeland, the MdTA’s Executive Secretary:

You should know that monthly costs must still be paid by the Authority to the contractor who administers our E-ZPass system for each account, whether or not the account holder makes any trips. Even if the $1.50 charge per account is approved, we still will pay our contractor about $.25 more per account monthly that will not be passed along to our customers. Please be assured that we are not making money on this proposal, but rather attempting to recover the costs of operating the E-ZPass system.

It seems to me that the MdTA got itself into a rotten contract that is bilking them for a lot of money to operate the Maryland portion of the E-ZPass System, and that is why they are imposing the $1.50 monthly account maintenance charge.

My counter-proposal: since the Maryland General Assembly has not yet passed this year’s state budget, ask them to cut the budget for the Maryland Department of Transportation by a like amount - $60 Million. I suggest that they direct the funds be placed into a reserve to fund costs that the entire State of Maryland will incur from the Obama Administration's Environmental Protection Agency, which will get on our state's case about air pollution. We're already not doing so well in that regard – and many anticipate that the new Administration will be much more regulatory than the last one. Thus, I anticipate that our state will incur greater costs to combat pollution from vehicles - which E-ZPass decreases simply because vehicles don’t have to wait in long lines.

Mr. Freeland stated in an additional email message to me, “E-ZPass will still continue to offer convenient pre-paid tolling, significant time savings … and vehicle emissions reductions.” The irony here is incredible.

I offer my counter-proposal because I seriously think that the MdTA’s Governing Board, chaired by Transportation Secretary John Pocari, is being penny-wise and pound foolish – setting our state up for yet another disaster compounded by poor decision-making with anticipated revenues that will not nearly be met. When that happens, I’m certain we will see more “fees” imposed or increased, thus spiraling the problem into worse conditions.

Rocky Lopes is President of the Layhill Alliance and is a long-term civic activist in Montgomery County.