Red light cameras are nowhere near as popular as they once were with Golden State municipalities. Loma Linda and Whittier became the most recent examples of California cities unplugging their automated ticketing machines after noting that the devices both failed to reduce accidents and generate the promised amounts of revenue.
It seems that yesterday’s optimism about a possible end to the ethanol “Blender’s Credit” may have been somewhat premature, as Senate Budget Committee chair Max Baucus has now proposed extending the 45 cents per gallon tax credit at the lower rate of 36 cents per gallon. The ethanol industry has expressed disappointment, but says it will accept the proposal. Which, given the fact that the Blender’s Credit is opposed by groups as diverse as Friends Of The Earth and FreedomWorks, seems like the reasonable step. And because the 36 cent per gallon extension is only good for a year, even if it is approved, this battle will rage on.
The Las Cruces, New Mexico city council on Monday agreed once again to continue using a photo enforcement program that has proved to cause a significant increase in accidents. The jurisdiction in May reluctantly complied with a New Mexico Department of Transportation (NMDOT) order shutting down automated ticketing on state roads. Officials ignored the evidence at the time that accidents had increased, not decreased as promised, at photo enforced locations.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
Morale at Redflex Traffic Systems, the Australian photo enforcement company with more contracts in the United States than any other firm, has never been lower. Yesterday, the company faced the real possibility that the state government in Victoria, Australia would sue for the recovery of $15 million in citations issued by a faulty Redflex freeway speed camera system. Although the government currently refuses to issue refunds, it issued equally stern denials before giving in to public pressure by refunding $26 million worth of tickets over a high-profile accuracy failure in 2003.
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