NJ E-Z Pass Fees Going Up

New Jersey will hire a single contractor to run its E-ZPass system and it will charge drivers who use E-ZPass a $1-a-month service charge to help pay down the system's $400 million debt load, state officials said Thursday.

Other states with E-ZPass have a similar monthly service charge, officials said. The new fee – assessed to more than 1 million E-ZPass customers – is expected to cut the debt in six years.

Gov. James E. McGreevey said he also wants to cut E-ZPass toll discounts on the Garden State Parkway.

The state is negotiating with ACS Inc., the company that runs E-ZPass operations in several other states, to take over in New Jersey.

"The E-ZPass system must be financially sound and must be managed competently and this administration is committed toward both ends," McGreevey said.

The new fee will help the state pay for high-speed E-ZPass. Testing will begin shortly on the system that won't require drivers to slow down at toll plazas.

McGreevey promised to have more lanes on state highways dedicated to E-ZPass and to expand the system to Newark Airport and the Meadowlands.

Persistent glitches and technical problems were cited in last week's firing of WorldCom, the previous lead contractor. Thousands of notices were sent to drivers who paid tolls telling them they were being fined for cheating the system.

"There will be no bogus violation notices," Transportation Commissioner James P. Fox promised.

In a report released Wednesday, a legislative committee claimed the administration of former Gov. Christie Whitman administration mismanaged the electronic toll system project at every turn, from ignoring warnings about inadequate financing to not overseeing the contract properly.

Democratic lawmakers on the Assembly Transportation Committee charged that Republicans knew fines collected from toll cheats could not fully fund the system's operation, but told taxpayers otherwise.

Between 1999 and 2001, it cost the state $19.2 million to collect $13.3 million in fines.

Whitman said Wednesday that her administration proceeded in good faith with a system that relied too much on toll violators.

Terms of the new deal with ACS are being negotiated and will be complete within 30 days, McGreevey said. The state pays based on certain performance standards.

The state will also maintain the right to cancel the contract if ACS fails to do the job, a clause in an earlier contract that Whitman officials failed to execute despite four bankruptcies and dozens of breakdowns, McGreevey said.

As part of its negotiations with WorldCom, the state is seeking portions of $200 million in performance bonds. But the state's chances of claiming that money were compromised by Whitman's relying on a faulty financing scheme, McGreevey said.

"It does impact our contract status," he said.

The state expects to find $200 million more to help cut the E-ZPass debt by consolidating the three autonomous authorities that operate the state toll roads, McGreevey said. Work on restructuring those agencies will begin in six months, he said.

The new service fee will likely be in place within four months and the discount on the Garden State Parkway could end in September.

"The discounts on the Turnpike will be kept because they have proven to be effective in keeping trucks off local roads," Fox said.

ACS was chosen without a bidding process thanks to WorldCom's financial problems, Fox said.

ACS was an original bidder for the New Jersey project.

"They lost out to a firm that had no experience. They were a fiber optic company from Nebraska," Fox said.

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Author: 6 ABC-AP