Bi-State Tolling Authorities Have Broad Authority to Set and Use Tolls, and Tolling Decisions Are Primarily Influenced by Debt Rather Than Federal Toll Provisions

Interstate compacts provide the bi-state tolling authorities with broad  authority to set toll rates and use revenues for a range of purposes,  including capital improvements for their transportation infrastructure and,  in certain cases, economic development projects. To obtain financing  for capital projects, bi-state authorities pledge through bond agreements  to maintain specific revenue required to repay their debt. Bi-State Authorities Are Generally Not Subject to Federal or State Requirements for Public Involvement and Provided the Public Limited Opportunities to Participate in Recent Toll-Setting Decisions

In general, bi-state authorities are not required to follow federal or  generally applicable state requirements for involving and informing the  public, such as open meeting and open records laws. Instead, they set  their own policies, which may be less stringent than those that apply to  federal agencies, states, and other organizations. We found four  areas in their most recent toll increases in which the bi-state authorities  provided the public limited opportunities to learn about and provide  comment on toll proposals, in contrast to federal and state requirements  for involving the public, as well as practices used by other tolling  authorities. The bi-state authorities  did not in all cases (1) have documented public involvement processes  for toll-setting; (2) provide the public with key information on their toll  proposals in advance of public hearings; (3) offer the public sufficient  opportunities to comment on toll proposals; and (4) provide a public  summary of comments received before toll increases were approved. In commenting on a draft of this report, the PANYNJ stated that its policy  is to provide the public with the amount, purpose, and estimated revenues  of the proposed toll increase 10 days before convening toll hearings, and  that this policy constitutes a documented public involvement process. External Oversight of Bi-State Tolling Authorities Has Been Limited, but Bi-State Authorities Have Established Some Internal Oversight

		States Have Conducted Few Audits of Bi-State Tolling Authorities, and States’ Audit Authorities Are Unclear

The external oversight of the bi-state authorities has been limited as only  one of the four bi-state authorities has been regularly audited by a state  audit entity. However,  differences in states’ laws and disagreements between the bi-state  authorities and the state audit agencies have prompted questions about  the authority of several states to provide oversight. As a result, the DRPA office of  inspector general lacks an assurance of independence. Concluding Observations

Congress has given wide latitude to four states to address infrastructure  needs in the Northeast by consenting to the creation of bi-state tolling  authorities that operate some of the most highly traveled interstate  crossings in the United States. Because these authorities are neither federal nor state entities,  and because GAO does not make recommendations to non-federal  entities, we are not making any recommendations in this report. The DOT and the DRPA had no  comments on the draft. GAO staff that made significant contributions  to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our three objectives were to assess: (1) the authority of bi-state tolling  authorities to set and use tolls and the factors that influence toll setting,  (2) the extent to which bi-state tolling authorities involve and inform the  public in their toll-setting decisions, and (3) the extent to which bi-state  tolling authorities are subject to external and internal oversight. Appendix III: Public Involvement in Toll Increases by Bi-State Tolling Authorities

Appendix IV: Summary of States’ Reported Audit Authority over the Four Bi-state Tolling Authorities

	Delaware River and Bay Authority (DRBA), New Jersey and Delaware

Officials from the New Jersey Office of the State Comptroller stated that,  the office, established in 2007, has standing oversight authority over  DRBA—and the three other bi-state authorities—under the New Jersey  state law that enables it to audit and investigate New Jersey “public  agencies” and “independent state authorities.” However, it has not been  firmly established in state law or state judicial cases that these bi-state  authorities are considered “public agencies” or “independent state  authorities” for the purposes of this law.
Why GAO Did This Study

The Northeast is home to some of the most highly traveled interstate crossings in the United States, funded by toll revenues collected from the traveling public. Since 1921, Congress has provided its consent to New York, New Jersey, Pennsylvania, and Delaware to enter into legal agreements known as interstate compacts, establishing four bi-state tolling authorities to build and maintain toll bridges and tunnels. In recent years, bi-state tolling authorities have come under scrutiny for toll increases and other concerns, and GAO was asked to review their toll-setting decisions and oversight framework. GAO examined: (1) the authority of bistate tolling authorities to set and use tolls and the factors that influence toll setting; (2) the extent to which the authorities involve and inform the public in toll-setting decisions; and (3) the extent to which the authorities are subject to external and internal oversight. GAO reviewed federal and state laws, bi-state tolling authority documents, and interviewed officials from the authorities and state audit offices. GAO does not make recommendations to non-federal entities; nonetheless the authorities could benefit from greater transparency in public involvement and clearer lines of external oversight. DOT had no comments on a draft of this report and three authorities provided technical comments, which GAO incorporated as appropriate. In addition, the Port Authority of New York and New Jersey disagreed, stating its policies constituted a documented public involvement process. GAO maintains that these policies were not publicly available, or a defined and structured process.

What GAO Found

Bi-state tolling authorities have broad authority to set toll rates and use revenues for a range of purposes, including maintaining, repairing, and improving their infrastructure. In setting tolls, bi-state tolling authorities are primarily influenced by debt obligations and maintain specific operating revenues to repay their debt. A federal statute requiring bridge tolls to be "just and reasonable" has less influence on tolling decisions, in part, because no federal agency has authority to enforce the standard.
Bi-state tolling authorities are not required to follow federal or general state requirements for involving and informing the public; they set their own policies that can be less stringent than practices of transportation agencies that follow federal or state requirements. In their most recent toll increases, the bi-state authorities generally provided the public limited opportunities to learn about and comment on proposed toll rates before they were approved. For example, one bistate authority did not hold any public toll hearings, while another provided one day for hearings. In contrast to federal and general state requirements and leading practices, the bi-state authorities did not in all cases (1) have documented public involvement procedures for toll setting; (2) provide the public with key information on the toll proposals in advance of public hearings; (3) offer the public sufficient opportunities to comment on toll proposals; and (4) provide a public summary of comments received before toll increases were approved.
External oversight of the bi-state authorities is limited as only one of the four authorities has been regularly audited by a state audit entity. While these audits have uncovered areas of concern, the authority of most state audit entities to oversee the bi-state authorities is unclear. Differences in states' laws and disagreements between the bi-state authorities and state audit agencies have raised questions about the authority of several states to provide oversight. Each of the four bi-state authorities provides some internal oversight, but one has not established access authority for its inspector general, which, as a result, lacks an assurance of independence. Because internal auditors are generally not required under internal audit standards to report to outside audiences, the public may lack knowledge of their efforts to ensure accountability for the use of toll revenues.