Millions of dollars paid by motorists in red light camera and speed camera fines end up in the pockets of a handful of individuals. In the United States, American Traffic Solutions (ATS) is responsible for about 41 percent of the nation’s photo enforcement business, but as a private company its dealings are well concealed from public scrutiny. Based on a review of documents marked “confidential — attorneys’ eyes only,” the ATS leadership team has reaped significant personal profit in a short amount of time.

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Automated cameras will begin issuing tickets to the owners of vehicles that momentarily stray into bus lanes in New York City, New York beginning Monday. The cash-strapped metropolis imported the idea from London where a similar system generated 293,000 citations and more than £35 million (US $56 million) in 2008. New York’s bus lane tickets will run between $115 and $150 each.

The project marks one of the first uses of automated enforcement in the United States that drops the pretense of being a safety measure. The stated purpose of the new cameras is to give buses a travel priority over automobile traffic.

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With the federal deficit balooning out of control, President Obama’s National Commission on Fiscal Responsibility and Reform has publicized its preliminary proposals, and goodness are there a lot of them. But only one of the commission’s proposals gets to the heart of this nation’s automotive future: a proposal to increase America’s gas tax. Federal fuel taxes currently stand at 18.4 cents a gallon for gasoline and 24.4 cents for diesel fuel, but the commission has proposed a 15 cent per gallon increase, to take effect starting in 2013.

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A federal class action lawsuit seeks to take advantage of last month’s California Supreme Court’s red light camera decision. The high court let stand a lower court ruling that invalidated citations on the ground that the city of Santa Ana’s failed to provide the legally required warning periods before activating the automated ticketing machines (view ruling). Motorist Robert Plumleigh was forced to pay $480 on March 17, 2008 after a camera accused him of turning right at a red light at one of the sixteen intersections where the city failed to provide the required thirty-day warning period. He wants Santa Ana to refund all illegally issued tickets. US District Court Judge Cormac J. Carney on Wednesday gave Plumleigh’s lawyers an extra thirty days to file for class certification.

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Perhaps one of the least-covered elements of the auto industry restructuring has been the numerous tax advantages GM has earned as a government-owned automaker. Unlike most bankruptcies, GM was allowed to hold onto some $16b of net operating loss credits (tax-loss carry-forwards), which can be used to offset future tax bills. Typically, companies that restructure in bankruptcy lose existing carry-forwards as the price of wiping out debt, but because the government is invested in GM, it decided to allow old tax losses to flow into the new company even as debt was left behind. In the latest update on this story, The Wall Street Journal notes that some $18.9b of GM’s carry-forwards were from the old company, and that the firm has a whopping $45.4b in future tax savings. And because carry-forwards can be banked up to 20 years before they are spent, GM will have to make massive profits before it starts actually paying taxes to the federal government. The government’s position:

the profit-shielding tax credit makes the bailed-out companies more attractive to investors, and that the value of the benefit is greater than the lost tax payments, especially since the tax payments would not exist if the companies fail

Which is all well and good, but the reality is also that this practically doubles the taxpayers’ cost of bailing out GM. As a policy this makes sense for the reasons given (assuming the bailout was a foregone conclusion), but it would be nice if this “hidden charge” were at least noted on the bill.

The city of Houston, Texas sought to keep secret all detailed information about the performance of its red light camera program on the eve of an election that will decide their fate. Yesterday, Paul Kubosh, co-founder of Citizens Against Red Light Cameras, filed suit in Harris County District Court seeking a court order compelling the release of accident data at intersections equipped with automated ticketing machines. Voters head to the polls today to decide whether or not the city will be allowed to continue using the devices.

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Ever since it became clear that the government would rescue General Motors and Chrysler, the Treasury Department has made it clear that it would stay out of “day to day” decision making at the rescued automakers. Allowing the rescued firms to operate independently was a political calculation based on the desire to keep politics from affecting sales at the two rescued automakers, but according to a Reuters special report, Treasury has not been able to keep its hands completely out of important decisions concerning the future of the two firms. Particularly in terms of setting up GM’s Initial Public Offering, Reuters found that the Treasury made important decisions affecting

its speed and size, the fees paid to the bankers and the potential involvement of offshore investors

Though this has kept the IPO out of election season and all of its potential for political problems, there is some downside to the Treasury’s involvement, particularly because it will not be exiting its equity position in GM until about 18 months after the IPO. As a result, analysts predict problems securing investors in a firm that may still be subject to ongoing government control. Morningstar’s David Whiston tells Reuters

I’m sure that there will be some institutional investors, and even some individual investors, that it scares away

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Facing massive budget shortfalls, many of the nation’s governors are turning to toll roads as a solution to their short-term spending needs. The National Governors Association last month dispatched a letter to US Senate committee leaders in the hopes of dissuading them from limiting the abilities of states to impose tolls on existing interstate freeways.

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Photo enforcement cameras are temporarily disabled in Albuquerque, New Mexico after a study by the University of New Mexico failed to offer a complete justification for the program. Mayor Richard J. Berry announced that he would eliminate six of the twenty red light camera intersections where accidents increased the most. He also will stop issuing speed camera citations at intersections — although he plans to keep three vans to set up mobile photo radar traps. While the contract with Redflex Traffic Systems is expired, Berry is seeking a better deal from other photo ticketing vendors.

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The Federal Highway Administration recently held out $10.5 million to bribe states into turning freeways into toll roads through fiscal 2011. As part of the so-called Value Pricing Program, which Congress introduced in 1991, the agency will take taxes paid by drivers at the pump and underwrite projects designed to charge motorists more for driving on existing roads or increase other fees imposed on drivers.

“These projects show that states are developing new ways of thinking about how to manage congestion,” Transportation Secretary Ray LaHood said in a statement on projects selected in August.

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Motorists traveling through New Jersey see $43 million of money paid through tolls wasted on the bureaucracy, according to an audit released Tuesday by the state comptroller. The New Jersey Turnpike Authority is responsible for running the Garden State Parkway and New Jersey Turnpike. Its employees took funds from the continuously increasing tolls and used it to enrich themselves in a number of ways.

“While tolls are going up, the Turnpike Authority is overpaying its employees, overpaying its management, overpaying for its health plan and overpaying for legal services,” State Comptroller A. Matthew Boxer said in a statement.

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The Federal tax credit for purchasing an electric vehicle is good for up to $7,500 off your next tax bill, under current provisions. But it won’t last forever: each manufacturer can sell 200,000 EVs and plug-ins with the federal rebate, but after that, consumers must pay full price (less any state incentives). And though GM will produce only 10k Volts in 2011, and only 45k units in 2012, its Vice Chairman Tom Stephens is already agitating for the 200k unit limit to be lifted. Optimistic much?
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The US Court of Appeals for the Third Circuit on September 30 used a loophole to uphold the legality of Massachusetts Turnpike toll road rates that discriminate against most out-of-state drivers. Those participating in the “Fast Lane” program, almost always residents of Massachusetts, receive a 25 cent discount on Allston-Brighton tolls and a 50 cent discount at the Sumner and Ted Williams tunnels. Regular commuters would save between $250 and $500 a year.

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In July, a three-judge panel of the appellate division of the Superior Court of California in Orange County ruled that red light camera tickets issued at certain intersections in Santa Ana were invalid because the city failed to provide legally required notice. The case was certified for publication, and last month the cities of Santa Ana and West Hollywood petitioned the state supreme court to undo this certification, which is extremely rare for photo ticketing programs. Unpublished cases cannot be cited as precedent in California, and motorists interested in challenging citations will have to repeat from scratch all arguments about the program’s illegality.

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The Louisiana Legislative Auditor’s investigation of the Jefferson Parish payroll wrapped up Wednesday, revealing that the parish’s red light camera program was at the center of a scandal that drew the interest of federal investigators. Auditors concluded that former parish President Aaron Broussard and former parish attorney Tom Wilkinson likely violated payroll fraud statutes.

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