Our family spent the final days of summer on a road trip from our Michigan home through Canada, New York, Massachusetts, and Rhode Island. Twenty-four total hours in a minivan with one husband, two kids, and a large dog can drive a woman to… think, a lot, about efficiency and fairness. No, not about which of the adults should do most of the driving (though that did cross my mind). I thought about highway tolls with the E-ZPass system.
Michigan doesn’t participate. But before we left on our trip, we picked up a transponder in Ohio. This allowed us to use the electronic toll collection system in 16 states and the bridge crossings to Canada at Niagara Falls. We sailed through E-ZPass lanes on I-90 in New York and Massachusetts. “Beautiful,” remarked my husband. No lines at toll plazas. No fishing for singles and quarters to hand to toll collectors. And we saved money: Tolls are higher for those who pay cash.
But starting October 28, Massachusetts will require some E-ZPass holders to pay more than others to drive the same stretch of road. Should a state charge a different tax rate to different consumers? It sounds unfair.
Here’s what will happen: A new all-electronic tolling system on the Massachusetts Turnpike will give discounts to drivers who use only that state’s E-ZPass. If they drive the entire Mass Pike, they’ll pay $1.90 less than those who have EZ-Passes issued by other states.
As The Boston Globe reports, Massachusetts has been offering discounts to its E-ZPass drivers since 2002. But when the Globe and others questioned the constitutionality of charging out-of-state residents a higher rate, Massachusetts decided to allow any driver—no matter her state of residence—to use a free Massachusetts E-ZPass and pay a lower rate.
It’s a similar story in New Hampshire. Several years ago, a driver could save up to 50 percent on tolls on the New Hampshire Turnpike if she purchased toll tokens locally—something mostly New Hampshire residents would do. When New Hampshire moved to the E-ZPass system, drivers with its pass got a discount, too. You don’t have to live in New Hampshire to receive the discount, but you have to use a New Hampshire E-ZPass.
Rhode Island allows residents of any state to buy its E-ZPass, too. But the state offers specially discounted E-ZPasses to drivers with Rhode Island driver’s licenses or vehicle registration. My mother-in-law pays 83 cents to cross the Newport Bridge with her Rhode Island-issued E-ZPass. With our Ohio E-ZPass, we paid $4.00. As non-residents, we could have purchased a Rhode Island E-ZPass transponder for $25 and enrolled in a thirty-day non-resident program allowing six trips across the bridge for 91 cents per crossing. That was neither efficient nor cost-effective for our single planned day-trip.
Well, you might argue, Massachusetts, New Hampshire, and Rhode Island aren’t being unfair since anybody can enroll in their programs and enjoy a discount of some kind. That’s true. If toll discounts matter that much, a driver could maximize her savings by getting E-ZPasses from multiple states. Of course, that would require switching out transponders each time she approaches a state border: Not the best idea. Comical, maybe… and for many New England commuters, who cross state lines at least twice a day? Ridiculous.
This is not to say that a state doesn’t have the right to encourage drivers to buy its pass, rather than that of a neighboring state. And it might have good political reasons to shift as much of its toll revenues as possible on to non-residents—who vote elsewhere. But I wonder whether it would be not only more fair, but more efficient, if states charged the same toll for anyone with an E-ZPass of any origin.
That’s what they do in Pennsylvania, for example. “We just thought that everybody who had E-ZPass deserved the discount” compared to drivers using cash, a Pennsylvania Turnpike spokeswoman told The Boston Globe.
I think so, too. After all, the E-ZPass Interagency Group’s stated goal is to “implement a regionally compatible, non-interfering electronic toll collection system that would not only satisfy the divergent toll collection and traffic management needs of… participating agencies, but would also provide regional mobility and convenience to their customers.”
EZ-Pass is a “beautiful” program, as my husband noted. Over 18.4 million drivers hold accounts in the program, and 2015 saw over 2.8 billion transactions. So many cars, paying so many tolls, so effortlessly.
Yet, if states ended discounts for drivers with in-state passes, they’d collect more in toll revenue and, and ultimately, have more money for roads. And that’s the real trade-off. My Rhode Island in-laws appreciate their resident discount and object to toll increases—much like everyone else. But you know what drives them really crazy? The poor quality of their roads.
It’s enough to drive a family to… think.
The Tax Hound, publishing the first Wednesday of every month, helps make sense of tax policy for those outside the tax world and connects tax issues to everyday concerns.
This story originally appeared on TaxVox.