12/24/2014Ratings Firm Worried That Northeastern Cities Drop Ticket Cameras
Twenty-six jurisdictions in New York and New Jersey drop photo enforcement, triggering revenue warning.
The state of New Jersey, Nassau County, New York and Suffolk County, New York decided to pull the plug on photo enforcement last week. New Jersey's red light camera program expired, Nassau County's school zone speed cameras were unpopular and Suffolk decided to drop plans before any cameras were ever installed. These developments have Moody's Investors Service, a credit rating agency, worried about the impact on the bottom line for jurisdictions that have come to depend on automated ticketing revenue.
"These developments are credit negative because they further constrain governments' ability to implement new revenue streams at a time when these governments are facing property tax limits, uneven sales tax growth and anti-tax sentiment," Moody's analysts wrote. "In August 2014, the [New Jersey] state judiciary tossed 17,000 tickets because one of the companies, [American] Traffic Solutions, failed to deliver them within a set time frame. That same month, the former CEO of the other company, Redflex, was indicted on federal corruption charges. The two events, general public discontent and questions about the effectiveness of the cameras contributed to the state legislature's decision to let the law lapse."
The more than two dozen municipalities in the Garden State that allowed private, for-profit companies to issue traffic tickets in return for a share of the revenue collected earned between one and two percent of their total annual operating revenue from this arrangement. Newark, for example, lost $4 million in annual revenue while Brick Township's $1.5 million in profit reflected 1.6 percent of its income.
In Long Island, New York, American Traffic Solutions kicked off the Nassau County "school zone" program by mailing out $80 tickets in the summer to the owners of vehicles photographed late at night, when no children were around. The practice drew widespread public discontent.
"Residents were instead caught off guard and woke up to expensive tickets before school was even back in session," Nassau legislator Dave Denenberg said.
Both Democratic and Republican politicians quickly jettisoned the unpopular scheme, and the controversy spilled over into Suffolk where lawmakers abandoned proposals to use speed cameras before any were ever installed. The top county lawmakers announced last week the filing of legislation that would prohibit the county from using speed cameras.
"It's very clear to all of us that the implementation of school speed zone cameras did not work in our neighboring county, and I feel that moving forward with a project that we have already seen fail would be extremely punitive to our residents," said county legislator William Lindsay III.
The Long Island jurisdictions continue to use red light cameras.