Facing mounting criticism, the Thruway Authority has put the brakes on a proposed 45 percent toll hike for commercial trucks, and will instead pursue a round of cuts.
Thruway Authority Executive Director Thomas Madison on Monday, Dec. 17, announced during a news conference with Gov. Andrew Cuomo that any toll increases have been removed from the proposed 2013 budget. Madison announced the move and cost saving measures hours before the authority met to adopt its budget and approve a $3.14 billion bid to rebuild the Tappan Zee Bridge. The proposed 45 percent toll hike on trucks was expected to raise around $90 million in revenue.
Cuomo, who earlier this month urged the authority to avoid any toll hike, applauded the switch and said it was “very exciting” to avert an increase. He said a toll increase was counterproductive for economic development statewide, especially for Upstate New York’s struggling economy.
“I thought it would send the wrong signal, especially at this time when we are working so hard to send a different signal,” Cuomo said. “These were very aggressive cost saving measures, because there was a lot of money that we were trying to make up.”
The news was met with elation from consumer advocacy groups that had panned the toll hike. Brian Sampson, executive director of the group Unshackle Upstate, said the toll hike would have resulted in “tremendous damage” to the Upstate economy.
“The announcement today is a clear indication that public advocacy is alive and well in New York,” Sampson said in statement.
Mark Eagan, president and CEO of the Albany-Colonie Regional Chamber of Commerce, echoed those thoughts.
“This toll hike would have been like putting up detour signs around New York,” Eagan said in a statement. “It goes against the progress we have achieved in recent years in building a new New York, one that is open for business.”
The Thruway Authority’s adopted 2013 budget, Madison said, holds “substantial financial savings” and its operating expenses are 21 percent lower than in this year.
“Our 2013 budget will put the authority on solid financial footing and it will avert the need for a toll increase,” Madison said. “As we realize budget savings and manage the authority better and differently, we’re also setting the stage to build big things again.”
An independent audit of the authority’s books and management revealed decades-old financial practices that were “risky, reckless and lacked transparency,” Madison said. Without changes, he said its “high A” credit rating likely would have been downgraded.
Madison said initial discussions with credit agencies on its plan were received positively. He expects to meet again with rating agencies in January to fully describe the financial plan.
“We reopened our books … we found additional savings and reforms and opportunities to improve the ways we conduct business at the authority,” Madison said.
Some of the cost-saving measures involve cutting $25 million in operating costs this year, with more than $130 million in savings and fiscal reforms over the next three years. Also, $900 million in “risky, short term” debt would be eliminated. From 2011 to 2013, the authority will eliminate 361 positions, reducing its workforce by around 6 percent.
The authority is eliminating reimbursement for State Police expenses, which began in 1954. The $60 million cost to maintain Troop T, which patrols the Thruway, will be picked up by the state.
The authority also plans to pursue other cuts, such as reducing its vehicle fleet and shifting employee benefits.
Madison said public pressure to eliminate the toll increase did affect the authority’s decision to look for additional cost savings to avoid it.
“Of course it had an impact on our deliberations,” Madison said.
Lawmakers had lambasted the authority’s proposed toll hike on trucks for weeks, even months, with Assemblyman James Tedisco, R-Glenville, recently saying it was an example of “secret government.”
Upstate Republicans have consistently railed against any toll increase, but Assemblyman Steve McLaughlin, R-Melrose, questioned why the hike was on the table for so long.
“The fact that the Thruway’s first inclination was to raise tolls rather than examine its own finances to find savings is further proof that the agency is completely mismanaged and in need of new leadership,” McLaughlin said. “Today’s news is a victory for New Yorkers, but we must continue to hold the Thruway’s feet to the fire and ensure that the sorely-needed reforms being considered are implemented, including the continued need for a forensic audit.”
Madison would not guarantee an absence of toll increases in coming years, but Cuomo asserted the authority’s financial plan doesn’t include any toll increases for the “next several years.” Cuomo said unexpected or unknown circumstances could alter projections.
“We need to do everything we can and explore every option before we even consider a toll increase,” Madison said.
