Privatizing Tolls Saves Atlantic City $7.5M

By outsourcing toll collections to a private operator, the South Jersey Transportation Authority anticipates a 43 percent savings over the next three years. This effort and others from around the country in a new privatization update.

What Happened?

By the end of 2014, Atlantic City is expected to yield $7.5 million in savings after implementing a privatized toll collection system on its major expressway in 2012. The South Jersey Transportation Authority extended its contract with Faneuil Inc. to keep the savings coming.

The Goal

By agreeing to the $3.7 million extension, the South Jersey Transportation Authority can turn the Atlantic City Expressway into a savings generator. The authority estimates saving 43 percent over three years with the outsourced toll collections, which originally started in January 2012 to cut down on the cost of salaries, benefits and pensions for state workers.

After realizing the financial benefits of privatizing toll collections, transportation authority officials are now examining other ways to increase savings further by eliminating all manpower and implementing an electronic tolling system down the expressway. The authority had a plan in place to roll out the all-electronic system last September, with $18 million in initial funding allocated to the project. However, the money was redirected and the project has since slowed to a halt. Until major steps are taking toward the electronic toll collection system, the privatization strategy is generating savings.

What Else Can Be Privatized?

Many cities and states have investigated privatization efforts to cut down on costs without eliminating valuable public services. Most of these projects involve prominent infrastructure in the community such as roads, building construction and airports.

In Chicago, however, local officials are considering a privatization of its free mammogram program in light of cuts from the state health department funding. The Illinois Public Health Department cited flaws in Chicago’s free mammogram program and pulled funding over disagreements on management models. With unionized workers at threat of losing their jobs and local residents unable to receive needed services if the program dissolves, the city is looking to the private sector to provide the funding through a partnership. While the project may not involve new infrastructure, it will ensure public services are delivered to the community.

Similarly, Philadelphia is looking to hire a private law firm to help the city’s public defenders handle the mounting case load. By hiring private sector attorneys to take on some of the cases for poorer defendants in the community, each case will receive more attention and the quality of legal services will be improved.

Just as Chicago is looking to maintain access to healthcare services for local residents, Philadelphia hopes to improve legal services appointed to poorer defendants. The idea to bring in private sector lawyers when public defenders cannot handle case loads is not new. When there is a conflict with a public defender and a case, the court appoints a private sector lawyer. This typically accounts for around 25,000 cases each year. These lawyers are sourced from a preapproved list. The city argues if there was a contract in place to have specific private lawyers working on excess cases, costs could be reduced by at least $1 million.

Work Together

Gov1 has monitored the privatization efforts across the country that range from trash collection to parks maintenance .

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