The $50 Million Question: Origin Of Governor Henry's Highway Traffic Camera Revenue Estimate

Governor Henry's budget hinges, in part, on the generation of $50 million in new revenue from fines levied against uninsured motorists nabbed by a new statewide system of highway traffic cameras, but there seems little agreement today the system will generate that sum and the origin of the estimate itself is in question.

It seems no one knows for certain where that revenue estimate came from. One of those who has followed development of the system says the $50 million figure "is probably worthless now."

The Department of Public Safety, which handled the requests for information (RFI) and the requests for proposals (RFP) from bidders, flatly says it doesn't have a clue about the estimate. "Unknown" is how DPS responded to two questions from potential vendors who asked upon what basis the estimate was made.

Paul Sund, Henry's director of communications, told The McCarville Report Online, "I think OSF budget division and Scott's (Meacham) staff put that together after looking at what some other states were doing."

A Tuesday inquiry to the treasurer's office has not yet been answered.

Former Rep. Wayne Pettigrew, a national officer of InsureNet, one firm interested in the state contract, followed closely the development of information about the new system. He tells TMRO, "As far as I know, it is 6 months anticipated revenue from a vehicle insurance verification system that has a national database. I believe it assumes a 24% uninsured rate on 70% of the vehicles (from Oklahoma) and a 70% collection rate on the fines levied. I do not know what the anticipated uninsured rate is for the out-of-state vehicles. I think the RFP from DCS (Department of Central Services) went to a single state type system for the database (not the InsureNet one) and so this number is probably worthless now."

It is estimated that more than 750 motorists without insurance would have to be fined per day to produce $50 million for the state given that the vendor would be paid 25 to 30 percent of the fines collected for administering the system. DPS reports there are 3.9 million vehicles in the state with 3.5 million of them being properly insured. That means there are 400,000 uninsured vehicles; at 750 per day, 273,750 fines would be levied in the first year. That appears to indicate that even if the system produced $50 million in the first year, revenue would drop dramatically in year two and following years unless huge numbers of additional vehicles go uninsured. Those in the industry say that's unlikely and, using this analysis, they view the future revenue stream from the system as tenuous unless huge numbers of out-of-state vehicles are included.

The initial plan, apparently, was for a system that would scan out-of-state license plates as well to catch those uninsured motorists and Governor Henry cited that as a large part of the revenue stream and the Department of Central Services Request For Proposals (RFP) sent on behalf of DPS does mention the multi-state function, as does a question-and-answer document on the DCS website.

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