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Tax Law

State Net Capitol Journal – September 17, 2012

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Budget & Taxes

TOLL ROAD REBELLION IN MD: Many Maryland motorists appear to have little respect for the state's toll roads. Thousands are repeatedly blowing through the state's E-ZPass lanes without an E-ZPass transponder.

One car rental company owes the state over $200,000 in unpaid tolls and penalties, while 15,000 individual vehicle owners owe more than $500 each. All told, almost 650,000 vehicle owners owe the state about $6.7 million in unpaid tolls dating back to 2007.

Maryland isn't the only state facing the problem. Toll violators comprise 1.7 percent of annual toll transactions in Virginia. The rate is 3.4 percent in Delaware and 1.4 percent in New Jersey.

In Maryland's case the problem is due at least in part to the fact that the state has been doing little to get toll scofflaws to pay up beyond mailing them letters. Although those letters threaten to suspend the vehicle owners' registration, the state's Motor Vehicle Administration hasn't suspended a vehicle registration for nonpayment of tolls in over two years.

E-Z Pass Toll Road

Other states have gotten tougher. New Jersey has actually arrested some of its most flagrant toll violators and recently posted a "Wall of Shame" on the Internet. And three other states - Massachusetts, Maine and New Hampshire - recently entered into reciprocity agreements to go after vehicle registrations of out-of-state toll dodgers.

"The registration holds work," said Vic Buono, chief of toll operations in Delaware. "People freak out when they get that." (WASHINGTON POST)

CA PARKS DEPARTMENT'S SURPRISE SURPLUS NOT NEW: The revelation this summer that the California Department of Parks and Recreation had $54 million stashed away in two hidden accounts even as 70 state parks were threatened with budget-forced closures - and the subsequent scandal that resulted from that news - have thrown a spotlight on a mystery that has plagued the department for years. Since at least 2009, annual budget reviews of the department have showed multi-million surpluses, but budget officials at the department have been unable to explain why.

One year a budget manager was demoted because the department's deputy director of administration refused to believe her estimate of a $125 million surplus, which was later determined to be correct. And the surprise surpluses continued.

"When I saw the numbers, I said holy crap," Assistant Deputy Director David Saxby said of a budget estimate for the 2009-10 fiscal year in an April 25 interview with a deputy attorney general. "There was another big balance, not as big as the year before, but another big balance."

The mystery has yet to be solved, but separate investigations by the attorney general's office and the state auditor are ongoing. (SACRAMENTO BEE)

BUDGETS IN BRIEF: Amazon began collecting sales tax from CALIFORNIA customers last week. The move will scale back the price advantage the Internet retailer enjoys over brick-and-mortar stores, but it will also allow the company to blanket the state with distribution centers to speed up the delivery of orders (SACRAMENTO BEE). • For the first time since 1994, NEW YORK and its municipalities have achieved lower 10-year borrowing rates than their counterparts in NEW JERSEY. Since Jan. 1, 2011, yields on 10-year debt sold in NEW YORK have averaged 0.014 percentage point below New Jersey bonds of similar maturity (BLOOMBERG BUSINESSWEEK). • PENNSYLVANIA has collected $197.6 million from drillers in the first round of Marcellus Shale impact fees (PITTSBURGH POST-GAZETTE).

- Compiled by KOREY CLARK

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