INTERSTATE 

COMPACTS

Transparency and 

Oversight of Bi-State 

Tolling Authorities

Could Be Enhanced

Report to the Chairman, Committee on 

Commerce, Science and 

Transportation, U.S. Senate

August 2013

GAO-13-687

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-687, a report to the 

Chairman, Committee on Commerce, Science 

and Transportation, U.S. Senate

August 2013

INTERSTATE COMPACTS

Transparency and Oversight of Bi-State Tolling 

Authorities Could Be Enhanced

Why GAO Did This Study

The Northeast is home to some of the 

most highly traveled interstate 

crossings in the United States, funded 

by toll revenues collected from the 

traveling public. Since 1921, Congress 

has provided its consent to New York, 

New Jersey, Pennsylvania, and 

Delaware to enter into legal 

agreements known as interstate 

compacts, establishing four bi-state 

tolling authorities to build and maintain 

toll bridges and tunnels. In recent 

years, bi-state tolling authorities have 

come under scrutiny for toll increases 

and other concerns, and GAO was 

asked to review their toll-setting 

decisions and oversight framework.

GAO examined: (1) the authority of bistate tolling authorities to set and use 

tolls and the factors that influence toll 

setting; (2) the extent to which the

authorities involve and inform the 

public in toll-setting decisions; and (3) 

the extent to which the authorities are 

subject to external and internal

oversight. GAO reviewed federal and 

state laws, bi-state tolling authority 

documents, and interviewed officials 

from the authorities and state audit 

offices. GAO does not make 

recommendations to non-federal 

entities; nonetheless the authorities 

could benefit from greater 

transparency in public involvement and 

clearer lines of external oversight. DOT 

had no comments on a draft of this 

report and three authorities provided 

technical comments, which GAO

incorporated as appropriate. In 

addition, the Port Authority of New 

York and New Jersey disagreed, 

stating its policies constituted a 

documented public involvement 

process. GAO maintains that these 

policies were not publicly available, or 

a defined and structured process.

What GAO Found

Bi-state tolling authorities have broad authority to set toll rates and use revenues 

for a range of purposes, including maintaining, repairing, and improving their 

infrastructure. In setting tolls, bi-state tolling authorities are primarily influenced 

by debt obligations and maintain specific operating revenues to repay their debt. 

A federal statute requiring bridge tolls to be “just and reasonable” has less 

influence on tolling decisions, in part, because no federal agency has authority to 

enforce the standard.

Bi-state tolling authorities are not required to follow federal or general state 

requirements for involving and informing the public; they set their own policies 

that can be less stringent than practices of transportation agencies that follow 

federal or state requirements. In their most recent toll increases, the bi-state 

authorities generally provided the public limited opportunities to learn about and 

comment on proposed toll rates before they were approved. For example, one bistate authority did not hold any public toll hearings, while another provided one 

day for hearings. In contrast to federal and general state requirements and 

leading practices, the bi-state authorities did not in all cases (1) have 

documented public involvement procedures for toll setting; (2) provide the public 

with key information on the toll proposals in advance of public hearings; (3) offer 

the public sufficient opportunities to comment on toll proposals; and (4) provide a 

public summary of comments received before toll increases were approved.

External oversight of the bi-state authorities is limited as only one of the four 

authorities has been regularly audited by a state audit entity. While these audits 

have uncovered areas of concern, the authority of most state audit entities to 

oversee the bi-state authorities is unclear. Differences in states’ laws and 

disagreements between the bi-state authorities and state audit agencies have 

raised questions about the authority of several states to provide oversight. Each 

of the four bi-state authorities provides some internal oversight, but one has not 

established access authority for its inspector general, which, as a result, lacks an 

assurance of independence. Because internal auditors are generally not required 

under internal audit standards to report to outside audiences, the public may lack 

knowledge of their efforts to ensure accountability for the use of toll revenues.

Interstate Bridges and Tunnels Owned by Bi-State Tolling Authorities

Bi-State authority Tolled interstate bridges and tunnels

Delaware River and 

Bay Authority 

1 toll bridge

Delaware River Joint 

Toll Bridge Commission

: Delaware Memorial Bridge

7 toll bridges

Delaware River Port 

Authority

, including the I-78, Milford-Montague, Delaware 

Water Gap, and Portland-Columbia Bridges

4 toll bridges

Port Authority of New 

York and New Jersey

, including the Ben Franklin, Betsy Ross, Walt 

Whitman, and Commodore Barry Bridges

4 toll bridges, 2 toll tunnels

Source: GAO analysis of bi-state tolling authority documents.

, including the George Washington, 

View GAO-13-687. For more information, Bayonne, and Goethals Bridges; Holland, and Lincoln Tunnels

contact Susan Fleming at (202) 512-2834 or 

flemings@gao.gov.
Page i GAO-13-687 Interstate Compacts

Letter 1

Background 5

Bi-State Tolling Authorities Have Broad Authority to Set and Use 

Tolls, and Tolling Decisions Are Primarily Influenced by Debt 

Rather Than Federal Toll Provisions 10

Bi-State Authorities Are Generally Not Subject to Federal or State 

Requirements for Public Involvement and Provided the Public

Limited Opportunities to Participate in Recent Toll-Setting 

Decisions 15

External Oversight of Bi-State Tolling Authorities Has Been 

Limited, But Bi-State Authorities Have Established Some 

Internal Oversight 23

Concluding Observations 30

Agency Comments and Our Evaluation 31

Appendix I Objectives, Scope, and Methodology 33

Appendix II Discussion of the Federal “Just and Reasonable” Standard and 

Significant Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges 36

Appendix III Public Involvement in Toll Increases by Bi-State Tolling 

Authorities 46

Appendix IV Summary of States’ Reported Audit Authority over the Four 

Bi-state Tolling Authorities 47

Appendix V GAO Contact and Staff Acknowledgements 51

Tables

Table 1: Facilities Managed by the Four Bi-State Tolling Authorities 

with Interstate Compacts 7

Contents
Page ii GAO-13-687 Interstate Compacts

Table 2: Bi-State Tolling Authorities’ Current Passenger-Vehicle 

Cash Toll Rates and 2011 Operating Revenues 9

Table 3: Bi-State Tolling Authorities’ Bond Debt Principal and Total 

Debt Service Cost, as of December 2011 13

Figure

Figure 1: Timeline of Public Involvement in Most Recent Toll 

Increases by Bi-state Tolling Authorities 46

Abbreviations

DRBA Delaware River and Bay Authority 

DRJTBC Delaware River Joint Toll Bridge Commission

DRPA Delaware River Port Authority

DOT Department of Transportation 

FHWA Federal Highway Administration 

FTA Federal Transit Administration 

MPO metropolitan planning organization

NJDOT New Jersey Department of Transportation 

PANYNJ Port Authority of New York and New Jersey 

PATCO Port Authority Transit Corporation

PATH Port Authority Trans-Hudson

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Page 1 GAO-13-687 Interstate Compacts

441 G St. N.W.

Washington, DC 20548

August 15, 2013

The Honorable John D. Rockefeller IV

Chairman

Committee on Commerce, Science and Transportation

United States Senate

Dear Mr. Chairman:

The Northeast is home to some of the most highly-traveled interstate 

crossings in the United States, including the George Washington and 

Delaware Memorial Bridges, which are funded by toll revenues collected 

from the traveling public. These toll bridges, along with more than a 

dozen others as well as several tunnels, are owned and maintained by 

several entities, which we refer to as bi-state tolling authorities. These 

authorities are created through legal agreements, known as interstate 

compacts, between two or more states to act cooperatively to address 

matters of interest to both states, such as operating ports and interstate 

toll crossings. Congress must give its consent to states to enter into 

interstate compacts that affect the balance of power between the federal 

government and the states or affect a power constitutionally assigned to 

the federal government, such as the power to regulate interstate 

commerce. With Congress’ consent, Delaware, New Jersey, New York, 

and Pennsylvania have entered into interstate compacts and created four 

bi-state tolling authorities to build, maintain, and operate certain interstate 

crossings.

Since 1921, Congress has granted its consent to a total of seven 

interstate compacts to manage toll bridges or tunnels crossing state 

boundaries; four of those compacts are currently administered by bi-state 

state tolling authorities: the Delaware River and Bay Authority (DRBA), 

the Delaware River Joint Toll Bridge Commission (DRJTBC), the 

Delaware River Port Authority (DRPA), and the Port Authority of New 
Page 2 GAO-13-687 Interstate Compacts

York and New Jersey (PANYNJ).1 These bi-state tolling authorities are 

primarily funded through toll collections or from revenues generated by 

other activities—such as fees and rents from airports, maritime ports, or 

other assets they may own and manage—and generally do not receive 

state funds. For example, the DRBA owns and manages the Delaware 

Memorial Bridge connecting New Jersey and Delaware, five regional 

airports, two ferry lines operating on the Delaware Bay and River, and 

other facilities. As we have reported, these authorities operate with 

congressional consent but are neither federal in nature nor state in scope; 

they occupy what some have referred to as a “third tier” of government.2

The federal role in reviewing bridge toll rates set by bi-state tolling 

authorities is limited in scope and has diminished over time. Since 1906, 

federal law has required that toll rates for bridges over navigable waters 

be “just and reasonable.”

3 The Department of Transportation’s (DOT) 

Federal Highway Administration (FHWA) previously enforced the 

requirement by conducting administrative reviews of toll rates if 

complaints were made by third parties or under the FHWA Administrator’s 

discretion. In 1987, Congress repealed DOT’s review authority; however, 

the just and reasonable standard remains in law.4 In 2011, legislation was 

introduced but not enacted to reinstate DOT’s authority to review toll 

 1

In addition to DRBA, DRJTBC, DRPA, and PANYNJ, the three other congressionally 

consented interstate compacts are the (1) New Jersey-Pennsylvania Turnpike Bridge 

Compact, (2) Missouri River Toll Bridge Compact, and the (3) Portsmouth-Kittery Bridge 

Compact. These three were not included in our review because their facilities are either 

not currently in operation (as is the case in the Missouri River Toll Bridge Compact) or the 

facilities are not managed by bi-state tolling authorities, but rather by the departments of 

transportation for the respective states entering into the compacts. 

2

See GAO, Interstate Compacts: An Overview of the Structure and Governance of 

Environment and Natural Resource Compacts, GAO-07-519 (Washington, D.C.: Apr. 3, 

2007).

3

The current requirement that tolls on bridges be just and reasonable is found at 33 

U.S.C. § 508. Appendix II discusses the evolution of the “just and reasonable” standard 

and how it has been applied.

4

Surface Transportation Uniform Relocation and Assistance Act of 1987; Pub. L. No. 100-

17, § 135, 101 Stat. 132, 173 (1987).
Page 3 GAO-13-687 Interstate Compacts

rates, either upon complaint or under the initiative of the Secretary of 

Transportation.5 To date, such legislation has not been reintroduced.

Federal oversight of the bi-state tolling authorities is generally limited to 

those programs receiving federal funding and does not include the 

management of the interstate toll crossings. The Federal Transit 

Administration (FTA) or Federal Aviation Administration may provide 

funding to transit systems or airports that are operated by bi-state tolling 

authorities, and oversee those funds to ensure they are spent according 

to federal requirements. To help redevelop the lower Manhattan area 

after 9/11, for instance, the FTA allocated $2.9 billion to the PANYNJ to 

construct a transportation hub at the World Trade Center. In October 

2012, the construction site for the World Trade Center transportation hub 

and portions of the Port Authority Trans-Hudson (PATH) commuter rail 

line were flooded and certain PANYNJ facilities were severely damaged 

by Hurricane Sandy. In response, FTA has allocated $1.36 billion to the 

PANYNJ for emergency repairs, restoration, and to increase the 

resiliency of the PATH system to guard against future disasters.6

In recent years, certain bi-state tolling authorities have come under public 

scrutiny regarding toll increases and concerns that revenues have been 

used for purposes beyond maintaining critical transportation 

infrastructure. In addition, recent management audits by outside 

consultants and state audit agencies have raised concerns about the 

extent to which these authorities are accountable and transparent to the 

public. You asked us to review the toll-setting and oversight framework of 

the bi-state tolling authorities. We examined: (1) the authority of bi-state 

tolling authorities to set and use tolls and the factors that influence toll 

 5

Commuter Protection Act, S. 2006 and H.R. 3684 112th Cong. (2011). This legislation 

would have reinstated DOT’s authority to review toll rates for any bridge or tunnel 

constructed under the authority of several federal bridge acts—the Bridge Act of 1906 (33 

U.S.C. § 491 et seq.), the General Bridge Act of 1946 (33 U.S.C. § 525 et seq.) or the 

International Bridge Act of 1972 (33 U.S.C. § 535 et seq.)—and over or through any 

bridge or tunnel constructed on a federal-aid highway (as defined in 23 U.S.C. § 101(a)).

6

The Disaster Relief Appropriations Act, 2013 (Pub. L. No. 113-2, div. A, 127 Stat. 4, 35 

(2013)) provided $10.9 billion to FTA’s Emergency Relief Program for recovery, relief, and 

resiliency efforts in areas affected by Hurricane Sandy. However, as a result of the Budget 

Control Act of 2011 (Pub. L. No. 112-25), 5 percent of the $10.9 billion made available 

under the Appropriations Act ($545,000,000) is subject to the significant spending cuts 

known as sequestration and is unavailable for Hurricane Sandy Disaster Relief. See 78 

Fed. Reg. 19357 (Mar. 29, 2013). As of May 29, 2013, FTA had allocated about $5.7 

billion for transit relief in New York and New Jersey.
Page 4 GAO-13-687 Interstate Compacts

setting; (2) the extent to which bi-state tolling authorities involve and 

inform the public in their toll-setting decisions; and (3) the extent to which 

the bi-state tolling authorities are subject to external and internal 

oversight.

To examine these issues, we gathered information from the four bi-state 

tolling authorities currently operating tolled interstate crossings under an 

interstate compact: the DRBA, DRJTBC, DRPA, and PANYNJ. To identify 

the factors considered in setting toll rates, we interviewed officials from 

each of these authorities and reviewed financial statements and related 

documents describing the factors contributing to their toll rates. To assess 

the purposes for which toll revenues can be used, we reviewed the 

interstate compacts, bylaws, and other documentation. While we 

reviewed the allowable uses for toll revenues, due to ongoing litigation 

between the PANYNJ and the American Automobile Association 

regarding recent toll increases by the PANYNJ, we did not assess the 

specific purposes and projects for which the PANYNJ uses its toll 

revenues. For consistency, we did not assess the specific purposes and 

projects for which the other bi-state tolling authorities use their toll 

revenue. To assess the extent to which the bi-state tolling authorities 

involve and inform the public in their toll-setting decisions, we reviewed 

documentation on their most recent toll increases as provided by each of 

the bi-state tolling authorities and collected from their public web sites. 

We compared their public involvement practices to those of federal, state, 

and local transportation authorities, including tolling authorities in 

Michigan and California that were not created by interstate compacts. To 

assess the external and internal oversight of the bi-state authorities, we 

reviewed available audit reports and interviewed and collected 

information from the state audit agencies of each of the four states in our 

review (Delaware, New Jersey, New York, and Pennsylvania) and from 

the internal audit organizations within the bi-state authorities. We 

compared the external oversight structure with GAO’s Government 

Auditing Standards and other relevant auditing standards and other GAO 

work on oversight of non-federal entities.7 We compared the activities of 

 7

GAO, Government Auditing Standards: 2011 Revision, GAO-12-331G (Washington, 

D.C.: December 2011); International Organization of Supreme Audit Institutions, General 

Standards in Government Auditing and Standards with Ethical Significance, ISSAI 200 

(Vienna, Austria: 2001); GAO, Inspectors General: Proposals to Strengthen Independence 

and Accountability, GAO-07-1021T (Washington, D.C.: June 20, 2007); and GAO, United 

Nations: Status of Internal Oversight Services, GAO/NSIAD-98-9 (Washington, D.C.: Nov. 

19, 1997).
Page 5 GAO-13-687 Interstate Compacts

the internal audit entities with the International Standards for the 

Professional Practice of Internal Auditing published by the Institute of 

Internal Auditors and related GAO work on internal auditing.8

We conducted this performance audit from July 2012 through August 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. Our objectives, scope, 

and methodology are discussed in more detail in appendix I.

Interstate compacts are legal agreements between states designed to 

address issues that transcend state lines. Compacts enable states to act 

jointly on matters that are beyond the authority of an individual state but 

are not within the specific purview of the federal government. States have 

entered into interstate compacts to act jointly to address a variety of 

concerns including resolving border disputes, allocating interstate waters, 

enhancing law enforcement, disposing of radioactive waste, and 

developing regional transportation systems, among other issues.9

According to the Council of State Governments, more than 200 interstate 

compacts exist today, and most of those are for purposes other than 

managing interstate crossings. To form an interstate compact, two or 

more states typically negotiate an agreement, and each state legislature 

enacts a law that is identical to the agreement reached. Once all states 

specified in the compact have enacted such laws, the compact is 

formed.10

In cases where the compact affects the balance of power between the 

federal government and the states, the states must obtain the consent of 

Congress for the compact to be valid. Congress can give its consent by 

passing legislation that specifically recognizes the compact as enacted by 

 8

The Institute of Internal Auditors, Professional Practices Framework, International 

Standards for the Professional Practice of Internal Auditing, (Altamonte Springs, FL: Oct. 

2012); GAO/NSIAD-98-9; GAO-07-1021T.

9

GAO-07-519.

10GAO-07-519.

Background
Page 6 GAO-13-687 Interstate Compacts

the states, at which time the compact becomes federal law.11 Congress 

may impose conditions as part of granting its consent, and it typically 

reserves the right to alter, amend, or repeal its consent in the compact 

itself. Congress included such a provision in each of the public laws 

consenting to the four interstate compacts in this review.

In establishing an interstate compact, states usually delegate authority to 

an independent entity, such as a bi-state tolling authority, that is created 

to administer and implement the compact’s provisions. Decision-making 

for each bi-state tolling authority is the responsibility of a board of 

commissioners composed of representatives of the member states, who 

are appointed by a state’s governor, such as local government officials, or 

serve by virtue of their elected position, such as a state treasurer. In 

addition to appointing commissioners, state governors may have authority 

to veto decisions made by commissioners from their state if such 

authority is specified in the compact or provided through reciprocal 

legislation passed by the states. The interstate compact includes the 

terms to which both states have agreed, and to which Congress has 

provided its consent. Some compacts include language that enables 

states to modify a compact through reciprocal legislation.12 Unless the bistate authorities engage in programs that receive federal funds, such as 

operating transit systems or airports, they are generally not subject to 

federal oversight.13

 11Congress may also recognize an interstate compact in advance by passing legislation 

encouraging states to enter into a specified compact or compacts for specified purposes, 

or by implication after the fact, when actions by the states and the federal government 

indicate that Congress has granted its consent even in the absence of a specific 

legislative act. GAO-07-519.

12The DRPA, PANYNJ, and DRBA compacts include this type of language, while the 

DRJTBC compact does not. See Int’l Union of Operating Eng’rs, Local 542 v. Del. River 

Joint Toll Bridge Comm., 311 F3d 273 (3d Cir. 2002) for a discussion of how various 

courts have interpreted this type of language. 

13The DRJTBC’s 1992 agreement with the U.S. Department of Transportation, the New 

Jersey Department of Transportation, and the Pennsylvania Department of Transportation 

under 23 U.S.C. § 129 permits the use of federal-aid highway funding to pay for the 

construction and upkeep of the I-78 Toll Bridge and requires that all toll revenues are used 

for debt service, reasonable return on private investment, and operation and maintenance. 

The Moving Ahead for Progress in the 21st Century Act (MAP-21) imposes a new 

requirement for annual audits to ensure compliance with these limitations, the results of 

which must be transmitted to the Department of Transportation. Pub. L. No. 112-141, § 

1512, 126 Stat. 405, 567 (2012).
Page 7 GAO-13-687 Interstate Compacts

The four bi-state tolling authorities manage a wide range of facilities, but 

the PANYNJ is significantly larger than the other three in terms of assets 

owned. At the end of fiscal year 2011, the PANYNJ reported that the total 

value of its assets was approximately $33.9 billion, which includes its five 

airports, six tolled crossings between New York and New Jersey, the 

World Trade Center properties, and other assets. By comparison, the 

DRPA’s $1.8 billion in total assets in 2011 was the next-largest asset 

value. New Jersey has a unique stake in these bi-state tolling authorities 

as it is the only state that is a party to each of the four interstate compacts 

in our review. See table 1 for a summary of the assets maintained by the 

four bi-state tolling authorities in our review.

Table 1: Facilities Managed by the Four Bi-State Tolling Authorities with Interstate Compacts

Bi-state tolling authority 

and location

Compact states and 

year of congressional 

consent Transportation facilities and other properties

Total asset 

value, fiscal 

year 2011 

(dollars in 

billions)

Port Authority of New York 

and New Jersey (PANYNJ)

New York City Metropolitan 

Area

New Jersey and New 

York

1921

• 4 toll bridges and 2 toll tunnels:

•

George Washington, 

Bayonne, and Goethals Bridges and the Outerbridge 

Crossing; Holland and Lincoln Tunnels

188 non-toll highway bridges:

•

109 bridges in New 

York and 79 bridges in New Jersey

5 airports:

•

John F. Kennedy International, LaGuardia, 

Newark Liberty International, Stewart International, 

and Teterboro Airports

7 port terminals:

•

Brooklyn-Port Authority, ElizabethPort Authority, Greenville Yard-Port Authority, 

Howland Hook, and Port Jersey-Port Authority Marine 

Terminals; Port Newark and Red Hook Container 

Terminal

Transit and ferry assets:

•

Port Authority Trans-Hudson 

(PATH) Rail Transit System, Journal Square

Transportation Center, Port Authority Bus Terminal, 

George Washington Bridge Bus Station, World Trade 

Center Transportation Hub, New York Harbor 

Commuter Ferry system

Other properties:

$33.9

World Trade Center, Waterfront 

Development in Queens and Hoboken, and several 

industrial parks and real estate developments in the 

New York metropolitan area

Delaware River Port 

Authority (DRPA)

Philadelphia, PA & 

Camden, NJ

New Jersey and 

Pennsylvania

1931

• 4 toll bridges: 

•

Ben Franklin, Betsy Ross, Walt 

Whitman, and Commodore Barry Bridges

Transit system and ferry assets:

•

Port Authority 

Transit Corporation (PATCO), RiverLink Ferry

Other properties:

$1.836

Various real estate investments in 

the Delaware River Port District
Page 8 GAO-13-687 Interstate Compacts

Bi-state tolling authority 

and location

Compact states and 

year of congressional 

consent Transportation facilities and other properties

Total asset 

value, fiscal 

year 2011 

(dollars in 

billions)

Delaware River Joint Toll 

Bridge Commission 

(DRJTBC)

Border of Philadelphia and 

Bucks Counties, PA to 

NJ/NY state line

New Jersey and 

Pennsylvania

1935

• 7 toll bridges:

•

I-78, Milford-Montague, Delaware 

Water Gap, Portland-Columbia, Easton-Phillipsburg,

New Hope-Lambertville, Morrisville-Trenton Toll 

Bridges

13 non-toll bridges

$0.815

supported by revenues from 7 toll 

bridges

Delaware River and Bay 

Authority (DRBA)

Delaware and the counties 

of Gloucester, Salem, 

Cumberland, and Cape 

May, New Jersey

New Jersey and 

Delaware

1962

• 1 toll bridge:

•

Delaware Memorial Bridge

5 airports:

•

New Castle Airport, Cape May Airport, 

Millville Airport, Civil Air Terminal at Dover AFB, 

Delaware Airpark

2 ferries:

•

Cape May-Lewes Ferry, Three Forts Ferry 

Crossing

Other properties:

$0.632

Salem County Business Park, 

located in Carney’s Point Township, New Jersey; 

Riverfront Marketplace, Wilmington, Delaware

Source: GAO analysis of bi-state tolling authority documents.

NOTE: Total asset value represents the value of transportation facilities and properties as well as 

other assets.

The bi-state tolling authorities primarily fund the operation and 

maintenance of these facilities through tolls and other user fees collected 

from assets they manage. Many of these bridges and tunnels require 

significant renovations due to their age, and the costs of maintaining 

these facilities are substantial. For example, the PANYNJ began 

construction on the George Washington Bridge in 1927 and the bridge 

opened to traffic in 1931. Approximately 270,000 vehicles cross it every 

day, and the PANYNJ plans to spend $544 million to replace the 

suspender ropes on the bridge from 2011 through 2020. Each of the bistate tolling authorities has instituted a toll increase in the past 5 years to 

help fund such renovations, and the toll rates may vary based on the type 

of vehicle crossing the facility (e.g., passenger vehicles or commercial 

trucks), whether cash or electronic payment (EZPass) is used, and the 

time of day. For example, the PANYNJ, which collects tolls from 

eastbound drivers entering New York City on its facilities, raised the toll 

rates for automobiles paying cash from $8 to $12 in September 2011, 

with an additional increase of $1 for cash tolls in December 2012 and 

additional $1 increases effective in December 2014 and December 2015. 

Passenger vehicles using EZPass pay less—$8.25 during off-peak hours 

and $10.25 during peak hours. See table 2 for an overview of the 

passenger vehicle toll rate ranges and bi-state tolling authorities’

operating revenues and expenses in fiscal year 2011.
Page 9 GAO-13-687 Interstate Compacts

Table 2: Bi-State Tolling Authorities’ Current Passenger-Vehicle Cash Toll Rates and 2011 Operating Revenues 

Bi-state 

tolling 

authority

Passenger vehicle toll 

rate range as of July 

2013

Toll bridge and tunnel 

operating revenues, 2011 a (Dollars in millions)

Other operating revenues, 

2011

(Dollars in millions)

Total operating revenues, 

2011

(Dollars in millions)

PANYNJ $8.25 to $13.00 $1,079 b $2,721 c $3,800

DRPA $5.00 $268 $32 $300

DRBA $4.00 $86 d $29 $115

DRJTBC $.60 to $1.00 $103 e $1 $104

Source: GAO analysis of bi-state tolling authority data and annual reports, 2011.

a

Each of the four bi-state tolling authorities collects tolls one-way.

b

The PANYNJ charges an EZPass rate of $10.25 during peak hours (weekdays between 6 and 10 

AM and between 4 and 8 PM; weekends between 11 AM and 9 PM) and $8.25 for all other (off-peak) 

hours on all 6 crossings. The PANYNJ also offers discounted rate plans for its six crossings for 

eligible carpools ($4.25) and certain low-emission vehicles ($4.75); and reduced rates for certain 

vehicles crossing the Goethals Bridge, Outerbridge Crossing or Bayonne Bridge from Staten Island 

($5.25).

c

PANYNJ operating revenues also include the Port Authority Bus Terminal and the George 

Washington Bridge Bus Station.

d

The DRBA offers a commuter plan for $25 that allows 25 trips across the Delaware Memorial Bridge 

valid for 30 days.

e

The DRJTBC offers an EZPass discounted price of $.60 per trip if the vehicle makes 20 or more trips 

in 35 days.

To secure financing for capital improvements to their facilities, bi-state 

tolling authorities issue bonds to creditors and pledge tolls and other 

revenues for the repayment of the bond principal and interest. The four bistate tolling authorities are required through either their bond agreements 

with creditors or bylaws to have an annual audit of their consolidated 

financial statements by an independent audit firm, which provides 

assurance that financial information reported to the public is accurate and 

fairly presented. These audits are generally not designed to evaluate the 

effectiveness of an entity’s internal controls or management’s overall 

performance in achieving its objectives, but are meant to provide 

assurance that the financial information provided to creditors and the 

public—including assets, liabilities, revenues, and expenditures—are free 

from material misstatement.

In recent years, the operations of two bi-state tolling authorities, the 

DRPA and the PANYNJ, have been the subject of public scrutiny and 

media attention. In response, the governors of New York, New Jersey, 

and Pennsylvania directed the authorities to allow reviews that identified 

concerns about the management and operations of the two authorities. 

Specifically, as a condition of the governors’ approval of the PANYNJ’s 

2011 toll increase, the PANYNJ contracted with two consulting firms to 
Page 10 GAO-13-687 Interstate Compacts

undertake a comprehensive review and audit of the PANYNJ’s finances 

and operations. Generally, this audit (1) found, among other things,

concerns with the PANYNJ capital-planning process, cost controls, and 

oversight of the World Trade Center program, and (2) summarized reform 

initiatives undertaken by PANYNJ to address concerns.14 In July 2010, 

the governors of New Jersey and Pennsylvania directed the DRPA to 

agree to an independent investigation of its operations by the New Jersey 

Office of the State Comptroller. The State Comptroller found issues with 

the transparency of DRPA’s practice of sharing insurance commissions, 

providing unlimited free bridge passes to DRPA employees, and the 

conduct of its economic development program.15 DRPA has passed 

several board resolutions to address concerns. During the course of our 

review, DRPA reported that its economic development program was 

under review by a federal grand jury led by the U.S. Attorney’s Office in 

Philadelphia.

Interstate compacts provide the bi-state tolling authorities with broad 

authority to set toll rates and use revenues for a range of purposes, 

including capital improvements for their transportation infrastructure and, 

in certain cases, economic development projects. In setting tolls, bi-state 

tolling authorities are primarily influenced by bond agreements, as well as 

operations and maintenance costs and other factors. To obtain financing 

for capital projects, bi-state authorities pledge through bond agreements 

to maintain specific revenue required to repay their debt. The bi-state 

authorities set toll rates to meet these revenue requirements, while also 

accounting for the costs of maintaining the infrastructure given economic 

conditions, traffic levels, and other factors. Federal law has less influence 

on tolling decisions because currently no federal agency has the authority 

to enforce the federal requirement that bridge tolls be “just and 

reasonable.” In addition, some federal courts have questioned whether a 

private party has the right to challenge toll increases in court under this 

requirement. However, private parties also have been able to challenge 

 14Navigant, Phase I Interim Report: Presented to the Special Committee of the Board of 

Commissioners, PANYNJ (Jan. 31, 2012). Also see Navigant, Phase II Report: Presented 

to the Special Committee of the Board of Commissioners, PANYNJ (Sept. 2012); also see 

Rothschild, Final Report: Presented to the Special Committee of the Board of 

Commissioners, PANYNJ (Sept. 2012).

15New Jersey Office of the State Comptroller, Investigative Report: Delaware River Port 

Authority (Trenton, NJ: Mar. 29, 2012). 

Bi-State Tolling 

Authorities Have 

Broad Authority to 

Set and Use Tolls, and 

Tolling Decisions Are 

Primarily Influenced 

by Debt Rather Than 

Federal Toll 

Provisions
Page 11 GAO-13-687 Interstate Compacts

toll increases in federal court under the Commerce Clause of the U.S. 

Constitution.16

The interstate compacts generally provide the bi-state tolling authorities 

with broad authority to set rates and use toll revenues to maintain, repair, 

and improve their transportation infrastructure and cover other expenses. 

Although the specific language in the interstate compacts varies, the bistate authorities are permitted to set tolls and use tolls and other 

revenues for bridges, tunnels, and other infrastructure. The bi-state 

authorities are also generally permitted to use tolls and other revenues to 

cover operations and maintenance costs, make capital improvements, 

repay debt obligations, maintain reserve funds to address contingencies, 

or to make other investments. The bi-state tolling authorities prepare 

capital plans that prioritize their large-scale projects to improve and 

maintain their facilities, such as bridge resurfacing, painting and deleading, and replacing and repairing bridge cables and transit cars over a 

period of several years. For example, PANYNJ officials reported that over 

the past 5 years, the PANYNJ has spent approximately $2.5 billion on 

capital projects for its “interstate transportation network,” which includes 

its bridge, tunnel, PATH train system, and bus and ferry facilities. 

Similarly, DRPA’s approved 2013 capital plan identifies more than $746 

million in capital improvement projects for its four bridges, transit line, and 

other facilities over the next 5 years. The DRPA reported that in 2010, its 

board approved two contracts totaling nearly $140 million to replace the 

deck of the Walt Whitman Bridge and monitor construction of the project. 

Bi-state authorities are also permitted to use toll revenues to subsidize 

other operations, such as transit services. For example, the DRPA 

reported that in its 2012 capital plan, it provided about $33 million to its 

PATCO train line for capital projects, such as rehabilitating tracks and 

other improvements, representing about 26 percent of its total capital 

program for that year.

In addition to using tolls and other revenues for transportation purposes, 

the PANYNJ, the DRPA, and the DRBA are permitted by either their 

compact, subsequent compact amendments or bi-state legislation to use 

revenues for projects to promote their local economies, such as airports, 

 16The Commerce Clause provides Congress with the power to “regulate Commerce... 

among the several states...” U.S. Const. art. 1, § 8, cl. 3.

Bi-State Tolling Authorities 

Have Broad Authority to 

Set Toll Rates and Use Toll 

Revenues
Page 12 GAO-13-687 Interstate Compacts

industrial parks, business centers, and waterfront development projects.17

In certain cases the compacts impose conditions on using revenue for 

economic development. For example, the DRPA is permitted to use 

revenues for economic development only after allocating revenues to 

fund operations and maintenance costs for bridge and other capital 

facilities.18 According to DRJTBC officials, its compact does not authorize 

the DRJTBC to use its toll revenues for economic development projects.

The bi-state authorities set tolls and other charges primarily to generate 

revenues to maintain their operations and infrastructure and meet their 

debt obligations. On a year-to-year basis, the bi-state tolling authorities’

annual revenues may not be sufficient to fund the infrastructure projects 

in their long-term capital programs. The authorities enter into bond 

agreements with creditors in which they pledge the collection of tolls, 

among other revenues, to secure financing for capital improvements. 

Such bond agreements provide the authorities with the funding they need 

to maintain their infrastructure in a state of good repair, but this also can 

result in the bi-state tolling authorities incurring substantial debt 

obligations, which must be repaid over time. For example, the four bistate authorities’ total debt service costs, including the principal and cost 

of interest, range from $453 million to $30.2 billion over the life of their 

bonds, which may extend several decades depending on the bond terms. 

See table 3 for a summary of the principal owed by the four authorities on 

their bond debt and the total debt service cost over the life of their bonds.

 17As previously noted, we reviewed the allowable uses for toll revenues, but due to 

ongoing litigation between the PANYNJ and the American Automobile Association 

regarding recent toll increases by the PANYNJ, we did not assess the specific purposes 

and projects for which the PANYNJ uses its toll revenues. For consistency, we did not 

assess the specific purposes and projects for which the other bi-state tolling authorities 

use their toll revenues. 

18DRPA reported that its board passed a resolution in 2011 that limited its economic 

development spending to the completion of seven existing projects. This is discussed 

further later in this report.

Tolling Decisions Are 

Primarily Driven by Debt 

Obligations and Other 

Factors
Page 13 GAO-13-687 Interstate Compacts

Table 3: Bi-State Tolling Authorities’ Bond Debt Principal and Total Debt Service 

Cost, as of December 2011 (Dollars in millions)

DRBA DRJTBC DRPA PANYNJ

Bond debt 

principal $284 $406 $1,333 $15,751

Total debt 

service cost $453 $674 $1,861 $30,219

Source: Bi-state tolling authority annual reports, audit reports and/or financial statements, December 2011.

Note: All dollar amounts in table are rounded to the nearest million. The total debt service cost varies 

based on the life of the bonds.

Bi-state tolling authorities maintain specific operating revenue levels to 

pay the annual principal and interest on their debt. One measure of an 

entity’s ability to repay its debt is the “debt service coverage ratio,” which 

compares an entity’s annual operating revenues after operating expenses 

(net revenues) to its annual debt service costs. For example, the DRJTBC 

is required through a bond agreement to maintain a debt service 

coverage ratio of 1.3—meaning that it must generate net revenues that 

are at least 130 percent of its annual debt service costs or risk a default 

on its debt.19 Officials from each of the four bi-state tolling authorities 

reported that they monitor revenues on an ongoing basis and adjust their 

toll rates, in part, to ensure that future revenues will be adequate to meet 

their debt coverage requirements. Officials from Moody’s Investors 

Service, a credit-rating agency, stated that they use the debt service 

coverage ratio as a metric to assess the credit-worthiness of entities 

seeking financing through capital markets. Credit-rating agency officials 

reported that the ability to set toll rates independently to cover debt 

obligations is the most important factor considered in assigning a credit 

rating.

Bi-state tolling authorities also consider in their toll-setting decisions 

forecasts of traffic and associated toll revenues. These forecasts are 

based upon projections of economic factors that underlie traffic demand, 

such as employment, population, value of goods and services, fuel prices, 

and other factors that can affect traffic volume and associated toll 

revenues. For example, officials from the PANYNJ reported that more 

 19DRJTBC reported that it has adopted a policy in consultation with credit-rating agencies 

to maintain a debt–service coverage ratio of 1.5, or risk a downgrade of its credit ratings 

and less favorable terms on future debt. 
Page 14 GAO-13-687 Interstate Compacts

than 127 million cars, buses, and trucks crossed its bridges and tunnels in 

2007. The PANYNJ reported that as a result of the economic recession, 

elevated gas prices, and its toll increase, traffic declined by about 6 

percent to approximately 119 million vehicle crossings in 2011. 

Additionally, unforeseen weather events that can cause damage to 

infrastructure can affect revenues and expenses; the bi-state tolling 

authorities maintain a reserve fund and insure their assets for such 

events.

Although there is a federal statute requiring that bridge tolls be “just and 

reasonable,”

20 in practice this requirement has less influence on bi-state 

authorities’ toll-setting decisions than other factors, in that no federal 

agency currently has the authority to enforce the standard. Since 1906, 

federal law has required that toll rates for bridges over navigable waters 

be “just and reasonable,” and until 1987 this provision was enforced by 

various federal agencies. Originally, the Department of War performed 

this role, and later the Department of Transportation’s (DOT) Federal 

Highway Administration (FHWA) performed an administrative review of 

toll rates if complaints were made by third parties or at the FHWA 

Administrator’s discretion. From 1970 to 1987, the FHWA Administrator 

adjudicated several significant toll increase challenges, finding on at least 

two occasions that proposed toll rates were unjust and unreasonable, and 

on at least one occasion that proposed toll rates met the “just and 

reasonable” standard. In 1987, Congress repealed DOT’s authority to 

determine if toll rates were just and reasonable,

21 but the standard itself 

remains in statute. While several parties have sought to challenge toll 

increases under this federal “just and reasonable” standard in court, 

certain federal courts have questioned whether private parties have the 

right to raise such court challenges. However, private parties also have 

 2033 U.S.C. § 508.

21Surface Transportation and Uniform Relocation Assistance Act of 1987, Pub. L. No. 

100-17, § 135, 101 Stat. 132, 173 (Jan. 14, 1987). A Senate report accompanying the act 

stated in a section-by-section analysis of the act that, “Federal oversight of the 

reasonableness of tolls has proven to be administratively burdensome [and] legally 

unproductive.” Section-by-Section Analysis of S. 312—Essential Highway Reauthorization 

Amendments of 1987, 133 Cong. Rec. S778 (Jan. 14, 1987).

A Federal Law That Tolls 

Be “Just and Reasonable”

Has Less Influence on TollSetting Decisions Than 

Other Factors
Page 15 GAO-13-687 Interstate Compacts

been able to challenge toll increases in federal court under the 

Commerce Clause.22

Although no federal agency currently enforces the just and reasonable 

standard, prior administrative decisions and federal court opinions have

interpreted how the standard is to be applied. Since 1973, federal 

administrative and court decisions have generally found that just and 

reasonable tolls are those sufficient to pay not only the reasonable cost of 

maintaining, repairing and operating facilities, but also to establish funds 

to amortize bridge indebtedness, provide a reasonable return on invested 

capital, and other purposes. These decisions have also found other uses 

of toll revenues—such as operating public transportation facilities—to be 

appropriate. In 1987, Congress in effect codified these decisions and 

repealed provisions that had expressly limited the use of toll revenues to 

specific purposes, such as maintaining, repairing, and operating a bridge. 

Key federal administrative and court decisions applying the “just and 

reasonable” standard are discussed in greater detail in Appendix II.

In general, bi-state authorities are not required to follow federal or 

generally applicable state requirements for involving and informing the 

public, such as open meeting and open records laws. Instead, they set 

their own policies, which may be less stringent than those that apply to 

federal agencies, states, and other organizations. In addition, none of the 

four interstate compacts we reviewed contains language establishing 

specific public involvement requirements for toll setting. We found four 

areas in their most recent toll increases in which the bi-state authorities 

provided the public limited opportunities to learn about and provide 

comment on toll proposals, in contrast to federal and state requirements 

for involving the public, as well as practices used by other tolling 

authorities. See appendix III for a detailed timeline of public involvement 

in the four bi-state authorities’ most recent toll increases.

 22See, e.g., Wallach v. Brezenoff, 930 F.2d 1070 (3d Cir. 1991); Automobile Club of New 

York, Inc. v. Port Authority of New York and New Jersey, 706 F. Supp. 264 (S.D.N.Y 

1989). 

Bi-State Authorities 

Are Generally Not 

Subject to Federal or 

State Requirements 

for Public 

Involvement and 

Provided the Public 

Limited Opportunities 

to Participate in 

Recent Toll-Setting 

Decisions
Page 16 GAO-13-687 Interstate Compacts

The bi-state authorities told us that they are not subject to federal or 

generally applicable state requirements for informing the public. For 

example, federal regulations for public participation in transportation 

decisions require regional planning bodies, known as metropolitan 

planning organizations (MPOs), to provide adequate notice and time for 

public review and comment, hold public meetings at convenient and 

accessible locations and times, and demonstrate explicit consideration 

and response to public input received in making planning decisions.23 In 

addition, each of the four states has established laws governing open 

meetings and records for public agencies that include requirements such 

as giving notice before holding public meetings, as well as submitting 

information to the state on the rationale for a toll increase, the financial 

position of the agency, and the purposes for which revenues will be used. 

According to bi-state authority officials, none of these generally applicable 

laws applies to the four bi-state authorities. However, New York and New 

Jersey have enacted reciprocal state statutes that require the PANYNJ to 

hold open meetings.24

In the absence of federal or state requirements, the bi-state authority 

officials reported that they have established their own general policies for 

public involvement, including making records publicly available and 

holding open board meetings. These internal policies, however, have 

been criticized for being less open or accessible than federal or state 

requirements. For example, in September 2011, the New York State 

Committee on Open Government found that the PANYNJ’s freedom of 

information policy—which allows the public to request PANYNJ 

documents—and open meeting policy were more restrictive and provided 

less access than freedom of information and open meetings laws that 

apply to state agencies in New York.25

 23GAO, Metropolitan Planning Organizations: Options Exist to Enhance Transportation 

Planning Capacity and Federal Oversight, GAO-09-868 (Washington, D.C.: Sept. 9, 

2009).

24N.Y. Unconsol. Laws 6416-A; N.J. Stat. § 32:1-6.1

25The New York State Committee on Open Government is a unit in the New York 

Department of State that oversees and advises the government, public, and news media 

on Freedom of Information, Open Meetings, and Personal Privacy Protection Laws. On 

September 6, 2011, the Committee issued an advisory opinion stating that the PANYNJ’s 

policies for open records and open meetings fall short of the requirements in New York’s 

Freedom of Information and Open Meetings Laws.

The Bi-State Authorities 

Are Not Subject to Federal 

or Generally Applicable 

State Requirements for 

Public Involvement
Page 17 GAO-13-687 Interstate Compacts

In addition to federal and state laws for public participation, federal 

agencies and the Transportation Research Board, a non-government 

research organization for transportation practice and policy, have 

identified leading practices that transportation agencies could use to 

involve the public in decision-making.26 In reviewing state and federal law 

and leading practices, we identified several practices used by 

transportation agencies that are subject to federal and state requirements 

that provide a useful way to assess whether the bi-state authorities are 

meeting expectations the public may have for accountability and 

transparency from public agencies. These practices include:

• establishing a documented process for public involvement in tollsetting decisions;

• requiring sufficient opportunities for public comment before approving 

toll proposals;

• providing key information to the public to support toll proposals; and

• summarizing public input for decision makers and the public before 

toll proposals are put to a vote for approval.

We found that the bi-state authorities’ efforts to involve the public during 

their most recent toll increases were limited in comparison with 

requirements for state and local transportation agencies and leading 

practices to involve the public in decision-making. The bi-state authorities 

did not in all cases (1) have documented public involvement processes 

for toll-setting; (2) provide the public with key information on their toll 

proposals in advance of public hearings; (3) offer the public sufficient 

opportunities to comment on toll proposals; and (4) provide a public 

summary of comments received before toll increases were approved.

According to the Transportation Research Board, establishing a defined, 

structured, and transparent process for involving the public in key 

decisions, such as those related to setting tolls, allows the public to 

 26Transportation Research Board of the National Academies, Effective Public Involvement 

Using Limited Resources, National Cooperative Highway Research Program Synthesis 

407 (Washington, D.C.: 2010). Also see FHWA, Public Involvement Techniques for 

Transportation Decision-Making, Publication No.FHWA-PD-96-031 (Washington, D.C.: 

Dec. 1996).

The Bi-State Authorities 

Provided the Public 

Limited Opportunities to 

Participate in Recent TollSetting Decisions

Documented Process for 

Involving the Public in Toll 

Setting
Page 18 GAO-13-687 Interstate Compacts

understand the process and be aware of critical decision points where 

they can have influence if a toll increase is announced.27 At the time of 

their most recent toll increases, the four bi-state authorities had general 

policies for holding open board meetings, but these policies did not 

outline specific steps for involving the public in toll increases. We have 

previously reported that having a transparent process for reviewing and 

updating user fees, such as tolls, helps assure payers and other 

stakeholders that user fees are set fairly and accurately and are spent on 

intended purposes. Furthermore, soliciting stakeholder input is particularly 

important in cases where there is a monopoly supplier, where alternatives 

are limited and fees are not fully voluntary.28 Because the public may 

have few alternatives to using the tolled crossings, having a transparent, 

documented process specific to toll setting could improve the public’s 

understanding of how the tolls work and what activities they may fund.

The four bi-state authorities’ general policies do not provide the public 

with information specific to the toll-setting process, including: (1) the 

number of toll hearings the authority will hold, along with locations; (2) the 

amount of time that will be available to the public to comment on the 

proposal before it is voted on; and (3) how the authority will use public 

comments in its decision-making process. In addition, three of the four bistate authorities did not have policies that specified the amount of 

advance notice to the public before holding public toll hearings. Only the 

PANYNJ’s policies specify the length of advance notice (10 days). In 

contrast, bridge authorities in Michigan are required under state law to 

hold three public hearings and provide advance notice with dates, times, 

and locations prior to any proposed toll increase to allow the public an 

opportunity to comment. A documented process for public involvement 

also demonstrates to the public and to credit-rating agencies that tollsetting is taking place within a predictable framework and could create 

institutional memory within the authorities for toll setting in the future. 

Without a documented process for public involvement, the public lacks a 

clear view of the bi-state authorities’ decision-making process, which 

 27Transportation Research Board of the National Academies, Committee on Public 

Involvement, State of the Practice: White Paper on Public Involvement (Washington, D.C.: 

2000). 

28GAO, Federal User Fees: A Design Guide, GAO-08-386SP (Washington, D.C.: May 29, 

2008).
Page 19 GAO-13-687 Interstate Compacts

could undermine the authorities’ ability to win the public’s support and 

secure necessary toll revenues.

In commenting on a draft of this report, the PANYNJ stated that its policy 

is to provide the public with the amount, purpose, and estimated revenues 

of the proposed toll increase 10 days before convening toll hearings, and 

that this policy constitutes a documented public involvement process. 

According to the PANYNJ, this policy was established in 1977 through a 

resolution passed by its board of commissioners. However, PANYNJ 

board resolutions and other PANYNJ rules and regulations are generally 

not available to the public through its web site.29 Consequently, at the 

time of the September 2011 toll increase, the public lacked the 

information needed to understand whether the PANYNJ was following its 

public involvement policies and making its toll-setting decisions in a 

predictable framework. In June 2012, the PANYNJ incorporated its 1977 

public involvement policy into its publicly available bylaws. While this 

policy will be in effect for future toll increases, we do not believe that the 

PANYNJ’s policy can be considered a defined and structured process for 

involving the public in key decisions because the policy still does not 

specify the number of toll hearings, the amount of time to be made 

available for the public to comment, and how the authority will utilize 

public comments.

Federal regulations pertaining to public participation require MPOs to 

provide adequate public notice and time for public review and comment at 

key decision points, and to hold any public meetings at convenient and 

accessible locations and times.30 As we have previously reported, the 

public is a key stakeholder in any tolling decision, and providing for 

stakeholder input may affect support for and acceptance of a fee and 

contribute to improved understanding about how the fees work and what 

activities they fund.31 The four bi-state authorities provided the public 

limited opportunities to comment before toll proposals were put to a vote 

for approval. For example, the DRJTBC did not hold any public hearings 

to receive public comment before approving its 2011 toll increase during 

 29The PANYNJ general counsel stated that members of the public may request a copy of 

PANYNJ resolutions from the Office of the PANYNJ’s Secretary.

3023 C.F.R. § 450.316.

31GAO-08-386SP.

Opportunities for Public 

Comment
Page 20 GAO-13-687 Interstate Compacts

an open board meeting.32 The DRPA and the DRBA each held one 

hearing per state to receive comment before approving their respective 

toll increases in open board meetings. Prior to convening toll hearings, 

the DRBA discussed the need for its toll increase in several board 

meetings that were open to the public. The PANYNJ held ten hearings on 

a toll proposal in various locations, including an online forum; however, 

those hearings were held in a single day. In contrast, officials from the 

Blue Water Bridge Authority and Mackinac Bridge Authority in Michigan 

reported that they typically provide 30 days after public notice is given for 

comment on toll proposals before approving an increase. Further, officials 

from the Golden Gate Bridge, Highway and Transportation District stated 

that they engaged the public through meetings, hearings, open houses, 

and other outreach for about 8 months prior to its last increase. The Bay 

Area Toll Authority in California began the public involvement process for 

its toll increase more than 6 months before the proposal was 

implemented with three public meetings held in locations around the 

region.

According to state and federal requirements and leading practices, 

agencies should provide key information to the public in advance of a toll 

proposal to give the public the opportunity to understand the agency’s 

rationale for a toll increase and provide meaningful input to the decisionmaking process. However, the three bi-state authorities that held public 

toll hearings provided only limited information such as short descriptions 

of the capital projects they intended to implement using revenue from 

their proposed toll increases. The PANYNJ reported that at the time of its 

most recent toll proposal, it had not made a long-term capital plan 

available to the public detailing the full uses of the proposed toll and fare 

increases for the public to review. In prior work, we found that leading 

organizations prepare long-term capital plans that usually cover a 5- to 

10-year period to document specific planned projects, plan for resource 

use, and establish priorities for implementation, and those plans are 

updated on an annual or biennial basis.33

 32The DRJTBC reported that it did not hold toll hearings for its 2011 toll increase in which 

it raised passenger vehicle tolls to $1.00 because that toll rate remains less than a 

previously approved toll increase to $1.25 which was implemented in 2001. The DRJTBC 

reduced it to $.75 in 2003.

33GAO, Executive Guide: Leading Practices in Capital Decision-Making, GAO/AIMD-99-32

(Washington, D.C.: December 2008).

Key Information to Support 

Toll Proposals in Advance of 

Public Hearings
Page 21 GAO-13-687 Interstate Compacts

The PANYNJ reported that the June 2012 policy changes to its bylaws 

give the public information on the purposes for which tolls and fares are 

being adjusted and an estimate of the overall increase in revenues 

resulting from the change at least 10 days prior to holding public toll 

hearings. However, this policy is less stringent than a requirement 

applicable to state tolling authorities in New York, which must provide the 

governor, state comptroller, and legislators a special report supporting the 

proposed toll increase at least 120 days in advance. This report must 

include the authority’s operation, debt service, and capital construction 

costs for the next 5 years, as well as estimates of the impact that 

revenues from the toll increase will have on the authority. Similarly, the 

public notice for the Golden Gate Bridge, Highway and Transportation 

District’s 2010 toll increase proposal included information on its budget 

shortfall and need for new revenue, the proposed toll schedule and dates 

of implementation, revenues anticipated from the increase, and a 

comparison of the District’s toll rates with similar bridge authorities around 

the country. Additionally, the Transportation Research Board has reported 

that those who are proactive in providing information are better able to 

guide public dialogue about the authority and its activities.34

According to the Transportation Research Board, one goal of a good 

public involvement process in transportation decisions is the incorporation 

of citizen input into decision making.35 Providing the public the opportunity 

to voice its opinion on toll increases is important, and the ideas, 

preferences, and recommendations contributed by the public should be 

documented and seriously considered by decision makers. Additionally, 

federal regulations require that MPOs demonstrate explicit consideration 

and response to public input received during the transportation planning 

process.36 Final toll-setting decisions should be communicated to the 

public with a description of how public input was considered and used.37

According to the Transportation Research Board, a decision-making 

 34Transportation Research Board of the National Academies, Public Participation 

Strategies for Transit, Transit Cooperative Research Program Synthesis 89 (Washington, 

D.C.: 2011).

35Transportation Research Board, State of the Practice: White Paper on Public 

Involvement (2000).

3623 C.F.R. § 450.316 (a)(1)(vi).

37Institute for Local Government, Principles of Local Government Public Engagement

(Sacramento, CA: June 10, 2010).

Summary of Public Input for 

Decision Makers and the Public
Page 22 GAO-13-687 Interstate Compacts

process that has public involvement inputs but no clear effect on the 

outputs is not a successful program.38

Only one of the four bi-state authorities created a summary of public input 

received during toll hearings and made it available to decision makers 

and the public. The PANYNJ provided a report to its commissioners 

summarizing the oral comments received at each of its ten public 

hearings, as well as written comments submitted, and made a transcript 

of each hearing publicly available on its website. After receiving public 

comment, the PANYNJ received a letter from the governors of New York 

and New Jersey voicing their disapproval of the initial increase, and 

modified its toll proposal to provide for more gradual toll increases over 

several years. The Mackinac Bridge Authority in Michigan also prepares a 

summary of public comments it receives at each hearing that categorizes

responses according to those in favor of and opposed to the toll increase. 

This analysis distills the viewpoints of the public into a format that is 

readily useful to decision makers. Without evidence that decision-makers 

are considering the public’s input before voting, the public lacks an 

assurance that its participation affects the tolling decision.

The Transportation Research Board has found that ongoing two-way 

communication is essential to a good public involvement program and 

that successful strategies provide continuous opportunities for the public 

to learn about and engage in the process.39 Organizations that maintain 

an ongoing conversation with the public through the media, open houses, 

and outreach efforts may improve the public’s buy-in and understanding 

of toll increases and how revenues will be used. Officials from the Golden 

Gate Bridge, Highway and Transportation District reported that regardless 

of whether a toll increase is being considered, engaging with the media 

regularly to discuss maintenance and capital projects is important so that 

the public is continually aware of the needs of the Golden Gate Bridge 

and how toll revenue is being used. By engaging the public in an ongoing 

conversation on how toll revenues are put to use, bi-state authorities have 

an opportunity to make a more convincing and transparent case for their 

toll proposals to secure necessary revenues.

 38Transportation Research Board, State of the Practice: White Paper on Public 

Involvement (2000).

39Transportation Research Board, State of the Practice, 5.
Page 23 GAO-13-687 Interstate Compacts

The external oversight of the bi-state authorities has been limited as only 

one of the four bi-state authorities has been regularly audited by a state 

audit entity. Specifically, the Office of the New York State Comptroller has 

conducted three audits of the PANYNJ in the past 5 years. The New 

Jersey Office of the State Comptroller conducted an investigation of the 

DRPA at the request of the governors of New Jersey and Pennsylvania in 

2010, and with the approval of the DRPA board. Neither the DRJTBC nor 

the DRBA has been subject to an audit by state audit entities in their 

respective states. New Jersey State Comptroller and New Jersey State 

Auditor officials stated that they have authority to audit the four state bistate authorities, but have not prioritized further audits of the authorities 

due to limited staffing resources and competing demands, such as 

auditing state agencies that receive state funds.

The few audits conducted have identified areas of concern in two bi-state 

tolling authorities. For example, in its July 2011 report on the PANYNJ’s 

use of consulting, construction management, and other contracted 

services, the New York State Comptroller found that the PANYNJ lacked 

supporting documentation for 57 of the 75 contracts it reviewed, with a 

total value of $1.18 billion in contracts lacking justification that the 

services were needed.40 Although the New York State Comptroller made 

several recommendations to improve the transparency of PANYNJ 

contracting, the PANYNJ does not have the same requirements as New 

York state agencies to report its progress in implementing 

recommendations, and it has not done so for this audit. As a result, the 

 40Office of the New York State Comptroller, Port Authority of New York and New Jersey: 

Contracts for Personal and Miscellaneous Services, Report 2009-S-54 (Albany, New York: 

July 19, 2011).

External Oversight of 

Bi-State Tolling 

Authorities Has Been 

Limited, but Bi-State 

Authorities Have 

Established Some 

Internal Oversight

States Have Conducted 

Few Audits of Bi-State 

Tolling Authorities, and 

States’ Audit Authorities 

Are Unclear
Page 24 GAO-13-687 Interstate Compacts

status of any actions taken by the PANYNJ to address the New York 

State Comptroller’s recommendations is not publicly available. New York 

State Comptroller officials stated that in May 2013 it initiated a follow-up 

audit of the PANYNJ’s contracting procedures in which it will report on the 

status of any reforms taken by the PANYNJ.

The New Jersey State Comptroller’s investigation found that the DRPA 

did not follow its own policies for approving and monitoring economic 

development projects and raised questions as to whether selected 

projects were properly vetted.41 The report also found that insurance 

brokers in New Jersey and Pennsylvania shared more than $1.5 million in 

commissions from the purchase of DRPA insurance policies, regardless 

of whether the brokers actually placed the policies “or performed any 

service at all.” Although the sharing of insurance commissions is legal in 

New Jersey, the report noted that the practice was potentially wasteful of 

toll-payer funds. In response, the DRPA has adopted new competitive 

procurement policies to select insurance brokers to reduce the potential 

waste of toll-payer revenues. DRPA officials also reported that the board 

passed a resolution in August 2010 that prohibited the use of DRPA 

revenues for projects that are not directly connected to the assets under 

the board’s direct control; however, another resolution in December 2011 

permitted the allocation of DRPA’s remaining economic development 

funds to complete seven economic development projects.

The authority of state audit agencies to oversee the bi-state authorities is 

in many cases unclear.42 Prior work by GAO and others has found that 

audit authorities should be clearly established to ensure that those 

authorities are widely understood by the agencies responsible for 

oversight and among the communities they oversee.43 However, 

differences in states’ laws and disagreements between the bi-state 

authorities and the state audit agencies have prompted questions about 

 41New Jersey Office of the State Comptroller, Investigative Report: Delaware River Port 

Authority (Trenton, NJ: Mar. 29, 2012).

42Because this is a discussion of state law, we are not providing an independent analysis 

as to whether these laws establish audit authority over the bi-state authorities.

43See GAO, United Nations: Status of Internal Oversight Services, GAO/NSIAD-98-9

(Washington, D.C.: Nov. 19, 1997); also see International Organization of Supreme Audit 

Institutions, General Standards in Government Auditing and Standards with Ethical 

Significance, ISSAI 200 (Vienna, Austria: 2001).
Page 25 GAO-13-687 Interstate Compacts

the authority of several states to provide oversight. Some of the states 

with bi-state tolling authorities have similar, but not identical legislation 

pertaining to their audit authorities, and some could not point to any 

concurring language in their state laws.44 For example, New Jersey State 

Comptroller officials stated that the office has standing authority to 

provide oversight of each of the bi-state tolling authorities under the New 

Jersey state law that enables it to audit New Jersey public agencies and 

independent state authorities.45 The New Jersey State Auditor—a 

separate office from the New Jersey State Comptroller—also reported 

that its office has standing authority to audit the four bi-state authorities 

under a separate New Jersey state law.46 Nonetheless, officials in both 

offices could not point to reciprocal legislation in Delaware and 

Pennsylvania establishing their authorities in those states.

In some cases, state audit agencies and bi-state authorities expressed 

disagreements over the extent of the state’s audit authority, or stated that 

audit authority was not established. Specifically, New Jersey State 

Auditor officials reported that the office attempted to initiate an audit of the 

DRJTBC in July 2013, but the DRJTBC rejected the request stating in a 

letter that the audit was not authorized by the DRJTBC interstate compact 

or by state laws in New Jersey and Pennsylvania. DRJTBC officials also 

stated that the New Jersey State Comptroller does not have standing 

audit authority. In addition, the Delaware Office of Auditor of Accounts 

reported that it does not have the authority to audit the DRBA, and the 

Pennsylvania Auditor General reported that it does not have the authority 

to audit the DRPA and the DRJTBC. The DRBA and the DRPA took no 

position as to whether New Jersey or the other states have standing audit 

authority. Appendix IV provides additional information about oversight 

authorities for the four bi-state authorities in the four states.

In addition to state audit agencies, other state agencies may also have 

limited authority to review the activities of bi-state authorities. In one case 

 44Some compacts include language that enables states to modify the compact through 

reciprocal legislation. The DRPA, PANYNJ, and DRBA compacts include this type of 

language, while the DRJTBC compact does not. See Int’l Union of Operating Eng’rs, Local 

542 v. Del. River Joint Toll Bridge Comm., 311 F3d 273 (3d Cir. 2002) for a discussion of 

how various courts have interpreted this type of language. 

45N.J. Stat. § C52:15C.

46N.J. State § C52:24-4.
Page 26 GAO-13-687 Interstate Compacts

we found that these limits posed risks to the accountability of federal 

transportation programs because the federal government lacked 

assurance that credits claimed by New Jersey to waive federal-aid 

matching fund requirements were in fact eligible and accurate. Under the 

federal-aid highway program, which provides about $40 billion annually to 

states to build and improve highways and bridges, states are typically 

required to provide a 20-percent funding match. However, a state may 

receive “toll credits” to reduce its matching requirement if it can 

demonstrate that toll revenues were spent on facility improvements and 

met other requirements.47 According to FHWA officials, from fiscal year 

2008 through 2011, FHWA approved over $334 million in federal toll 

credits from the four bi-state tolling authorities.48 New Jersey applied 

these toll credits and others earned from other tolling authorities in the 

state to eliminate the state’s entire required match for highway and transit 

projects from fiscal year 2008 through 2011.49 FHWA officials in New 

Jersey stated that they rely on the state to self-certify the accuracy and 

eligibility of its own toll credits. However, New Jersey Department of 

Transportation (NJDOT) officials stated that NJDOT does not request or 

review underlying project documentation, such as contract awards or 

project schedules, from the bi-state authorities to support their eligibility 

certifications. NJDOT officials stated that they would have authority to 

conduct audits and spot checks of the bi-state authorities but they could 

 47As provided by federal law, and contingent upon meeting certain requirements, a state 

may be permitted reduce the amount of funds it is required to contribute to receive federal 

surface transportation funds by claiming credit for toll revenues generated and used to 

build, improve, or maintain highways, bridges, or tunnels that serve the public purpose of 

interstate commerce. 23 U.S.C. §120(j).

48New Jersey was the only state in our review that claimed toll credits for expenditures 

made by the bi-state tolling authorities in the past 5 fiscal years. According to FHWA 

officials, from fiscal year 2008 through 2011, New Jersey requested about $342 million in 

toll credits based on bi-state tolling authority expenditures. FHWA approved almost $1.8 

billion in toll credits from four other tolling authorities in the state which are not bi-state 

entities, including the New Jersey Turnpike Authority, Burlington County Bridge 

Commission, Cape May County Bridge Commission, and the South Jersey Transportation 

Authority. Overall, FHWA has approved more than $7 billion in toll credits to New Jersey 

since the program was put in place in 1992; and New Jersey maintains a balance of 

approximately $3.2 billion in approved but unused toll credits as of August 2012 that can 

be used to eliminate its matching requirements in future years.

49From 2008 through 2011, NJDOT applied an average of almost $150 million in toll 

credits for highway projects, and New Jersey Transit applied an average of almost $90 

million per year in toll credits for transit projects to eliminate the state matching 

requirements for those years.
Page 27 GAO-13-687 Interstate Compacts

not provide any documentation to that effect. The officials also stated that 

NJDOT has never conducted an audit or spot-check of any of the bi-state 

authorities’ expenditures to confirm their eligibility for toll credits. As a 

result of states’ limited oversight of bi-state tolling authorities, FHWA 

lacks assurance that the states are able to fully verify the information 

collected from the bi-state authorities before it is provided to FHWA for 

approval.

Officials from certain bi-state tolling authorities told us that the states 

exercise oversight through the governor’s veto of the voting decisions of 

the commissioners from that state. This veto authority may provide an 

important check and balance on the boards’ decisions with regard to the 

governors’ priorities. However, such a veto power is limited to the voting 

decisions of the board and does not provide the public insight into the 

internal activities of the bi-state authorities that would otherwise be 

provided by an independent auditor. Moreover, this veto power is not 

always available to both governors. Specifically, according to DRJTBC 

and DRPA officials, the governor of Pennsylvania does not have veto 

authority over the DRJTBC or the DRPA because its state legislature has 

not provided that authority in state law.50 According to the New Jersey 

Governor’s office, New Jersey state law provides that the New Jersey 

Governor may veto actions of DRJTBC commissioners representing that 

state;51 however, that authority has not been exercised because 

substantially similar legislation has not been passed in Pennsylvania. 

DRJTBC reported that the New Jersey Governor may not unilaterally 

enforce its veto authority without reciprocal legislation enacted in 

Pennsylvania, as well as an act of Congress to amend the compact.52 In 

contrast, New Jersey and New York governors both have veto authority 

over the PANYNJ, and New Jersey and Delaware governors have veto 

authority over the DRBA.

 50The DRPA reported that its compact provides that the state legislatures of New Jersey 

and Pennsylvania may establish a veto authority for each governor over the decisions of 

the commissioners appointed from his or her state. The New Jersey governor has veto 

authority over its DRPA commissioners and, according to a DRPA official, has recently 

exercised that authority to encourage revisions to DRPA resolutions on open meetings 

and open records. 

51N.J. Stat. § 32:8-15.6-15.8.

52House Bills 619 and 621 have been introduced in the Pennsylvania General Assembly, 

which would provide the Pennsylvania governor the authority to veto certain actions of 

DRJTBC Pennsylvania Commissioners.
Page 28 GAO-13-687 Interstate Compacts

Each of the four interstate bi-state tolling authorities has established 

internal oversight mechanisms with responsibilities that vary based on the 

size and complexity of the organization. The four bi-state tolling 

authorities each have an audit committee comprised of board 

commissioners that is charged with activities such as overseeing the 

auditing and financial reporting processes of the authority, coordinating 

external financial or management audits, and directing the activities of 

internal audit departments, if applicable. For example, every 2 years 

DRPA’s audit committee selects an independent firm to conduct a 

management performance audit of DRPA business activities, which is 

intended to enhance transparency and enable the DRPA to more quickly 

identify issues that require the attention of the board and management. 

DRJTBC officials reported that the audit committee coordinates the 

annual audit of its financial statements and directs the auditors to perform 

stress tests of various functional areas, including management controls.

In addition to the activities of the audit committees, the two largest 

authorities, the PANYNJ and the DRPA, have also established separate 

inspectors general and internal audit departments that conduct their own 

performance and financial audits and respond to public or internal 

allegations of waste, fraud, and abuse. In general, internal audit entities 

are organizations that are accountable to senior management and those 

charged with governance of the audited entity.53 Internal audit entities 

typically follow audit procedures and practices based on the standards 

established by the Institute of Internal Auditors,54 and they are generally 

not subject to the standards that guide federal or state external auditors 

or inspectors general. For example, they do not generally report the 

results of their work to the public, Congress, or to their state’s 

legislature.55 However, like external audit agencies, internal audit entities 

are expected to be free from impairments to their independence and must 

avoid the appearance of any impairment to independence to meet 

professional auditing standards.56

 53GAO-12-331G. 

54Institute of Internal Auditors, International Standards for the Professional Practice of 

Internal Auditing (2012).

55GAO-07-1021T.

56See GAO-12-331G; also see IIA, International Standards for the Professional Practice of 

Internal Auditing (2012); and see GAO-07-1021T.

Bi-State Tolling Authorities 

Have Established Internal 

Oversight Mechanisms, but 

One Internal Audit Entity 

Lacks Assurance of 

Independence
Page 29 GAO-13-687 Interstate Compacts

Although auditor independence is required by professional internal 

auditing standards, the DRPA has yet to establish clear access 

authorities for its inspector general. As a result, the DRPA office of 

inspector general lacks an assurance of independence. DRPA officials 

reported that the DRPA inspector general’s office was established in 2012 

in response to a 2010 bill introduced in the House of Representatives that 

called for Congress to withdraw its consent from DRPA’s interstate 

compact if certain reforms, including creating the position, were not 

made.57 However, the DRPA resolution establishing the inspector general 

did not establish authorities for it to access DRPA records and personnel, 

and according to DRPA officials, such written authorities did not exist at 

the time of our review. The DRPA inspector general reported that he had 

drafted standard operating procedures for his office based on standards 

for state or local inspectors general, which included audit authorities and 

oversight responsibilities, and submitted those procedures to DRPA’s 

audit committee for its review.58 Although the DRPA inspector general 

maintains that he does not need the board’s approval for these standard 

operating procedures, the inspector general reported that members of the 

DRPA board attempted to weaken the authorities, including inserting a 

provision to require that the inspector general report any potential criminal 

activity to DRPA management rather than directly to legal authorities. The 

DRPA inspector general reported that he would not abide by this 

provision if enacted by the DRPA board. We requested from DRPA a 

copy of the standard operating procedures prepared by the inspector 

general; however, DRPA officials stated that these procedures have not 

been approved by the board and did not make them available for our 

review. As a result, we were unable to verify whether the authorities 

pursued by the DRPA inspector general were sufficient to enable the 

office to independently conduct its oversight responsibilities. In addition, 

the DRPA and PANYNJ declined our request to meet independently with 

officials from their respective inspectors general and internal audit 

departments without DRPA and PANYNJ management officials present.

By design, internal audit entities do not generally publically report their 

findings, and thus the public is usually not aware of the accountability 

 57H.R. 6202, 111th Cong. (2010).

58According to the DRPA IG, its draft operating procedures are based on the Principles 

and Standards for Offices of Inspector General prepared by the Association of Inspectors 

General.
Page 30 GAO-13-687 Interstate Compacts

efforts taken by these entities. For example, in 2011 the PANYNJ’s 

internal audit department office completed 271 audits of PANYNJ 

activities and reported $12.9 million in estimated savings as a result of its 

audits. However, the PANYNJ audit department does not publically report 

findings. While the PANYNJ provided us with summaries of several audit 

reports, it declined our request to provide selected full audit reports for 

our review. DRPA’s inspector general reported that it has conducted 

several audits and investigations and has released one report to the 

public. Although the Institute of Internal Auditors standards do not require 

internal audit departments to report audit results to the public, by not 

doing so, the public may be unaware of the efforts taken by bi-state 

authorities to safeguard toll payer revenues and improve management 

performance and operations.

Congress has given wide latitude to four states to address infrastructure 

needs in the Northeast by consenting to the creation of bi-state tolling 

authorities that operate some of the most highly traveled interstate 

crossings in the United States. These public authorities have broad 

authority to manage their operations without the same constraints, 

requirements, and oversight to which state and federal agencies are 

subject. Because these authorities are neither federal nor state entities, 

and because GAO does not make recommendations to non-federal 

entities, we are not making any recommendations in this report. The bistate tolling authorities have recognized that the traveling public pays for 

these facilities, and that they must be accountable to the public. However, 

issues of transparency and accountability could undermine the 

authorities’ ability to win the public’s support and secure necessary toll 

revenues. As such, states have both the incentive and the opportunity to 

enhance the transparency and accountability of the bi-state tolling 

authorities.

Specifically, the bi-state tolling authorities would benefit from clear and 

consistent requirements for public involvement in decision-making to 

ensure a documented process for public involvement and meaningful and 

sufficient opportunities for the public to comment, among other measures. 

In addition, the states have the incentive to work together to clarify the 

lines of external oversight over the bi-state tolling authorities, so that each 

state’s audit entity has sufficient standing authority and access to conduct 

audits and investigations of the operations of the bi-state tolling 

authorities. Furthermore, the internal audit entities of the bi-state tolling 

authorities are uniquely positioned to provide ongoing oversight and 

accountability. The DRPA established its inspector general in response to 

Concluding 

Observations
Page 31 GAO-13-687 Interstate Compacts

congressional concerns, and has the opportunity to more fully address 

those concerns by assuring the independence of its inspector general by 

establishing clear authorities for it to perform its work.

We submitted a draft of this report to the DOT and the four bi-state tolling 

authorities for review and comment. The DOT and the DRPA had no 

comments on the draft. We received technical comments from the DRBA, 

the DRJTBC, and the PANYNJ, and we incorporated those comments as 

appropriate. We also provided sections of the draft report relating to the 

external oversight of the bi-state tolling authorities to state audit agencies 

in Delaware, New Jersey, New York, and Pennsylvania and received 

technical comments, which we incorporated as appropriate.

In addition to providing technical comments, the PANYNJ disagreed with 

our finding that it did not have a documented and structured public 

involvement process for setting tolls. The PANYNJ stated that its policy of 

providing 10-days advance notice before convening toll hearings and 

providing the public with the amount and purpose of proposed toll rates 

constituted a documented public involvement process. According to the 

PANYNJ, this policy was established in 1977 through a resolution passed 

by its board of commissioners. However, PANYNJ board resolutions and 

its other rules and regulations are generally not available to the public. 

Consequently, at the time of the September 2011 toll increase, the public 

lacked the information needed to understand the PANYNJ’s public 

involvement policy, and whether the PANYNJ was following that policy 

and making its toll-setting decisions in a predictable framework. In June 

2012, the PANYNJ incorporated its 1977 policy into its publicly available 

by-laws. While this policy will be in effect for future toll increases, we do 

not believe that it can be considered a defined and structured process for 

involving the public in key decisions because, as stated in our report, the 

policy does not specify the number of toll hearings, the amount of time to 

be made available for the public to comment, and how the authority will 

utilize public comments. The PANYNJ also disagreed with our finding that 

it did not offer the public sufficient opportunities to comment during its 

most recent toll increase, and stated that as a matter of practice, it has 

held multiple toll hearings in both states prior to toll increases. Our draft 

report recognized that the PANYNJ held 10 hearings in various locations 

for its proposed 2011 toll increase, including an online forum. However, 

because those hearings were held in a single day—and only 3 days prior 

to the board of commissioners’ vote to approve toll increases—we believe 

that the accelerated schedule did not provide sufficient, convenient and 

accessible opportunities for the public to comment on the proposal.

Agency Comments 

and Our Evaluation
Page 32 GAO-13-687 Interstate Compacts

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to 

congressional committees with responsibilities for surface transportation 

issues and the Secretary of Transportation. In addition, this report will be 

available at no charge on GAO’s website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-2834 or flemings@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff that made significant contributions 

to this report are listed in appendix V.

Sincerely yours, 

Susan Fleming

Director, Physical Infrastructure Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-13-687 Interstate Compacts

Our three objectives were to assess: (1) the authority of bi-state tolling 

authorities to set and use tolls and the factors that influence toll setting, 

(2) the extent to which bi-state tolling authorities involve and inform the 

public in their toll-setting decisions, and (3) the extent to which bi-state 

tolling authorities are subject to external and internal oversight.

To assess the authority of bi-state tolling authorities to set and use tolls 

and the factors that influence toll setting, we reviewed the interstate 

compacts of the four bi-state tolling authorities: the Port Authority of New 

York and New Jersey (PANYNJ), the Delaware River Port Authority 

(DRPA), the Delaware River and Bay Authority (DRBA), and the 

Delaware River Joint Toll Bridge Commission (DRJTBC). We also 

interviewed bi-state tolling authority officials for their perspectives of the 

key drivers that influence their tolling decisions. We corroborated 

testimonial evidence by (1) reviewing of the bi-state tolling authorities’

most recent financial statements and annual reports, as well as recent 

official statements and related documentation provided by the bi-state 

tolling authorities; and (2) by interviewing credit rating agency officials and 

reviewing information that evaluates the financial standing of the bi-state 

tolling authorities. To assess the purposes for which toll revenues can be 

used, we reviewed the interstate compact agreements, including any 

amendments, and interviewed authority officials on their permitted use of 

toll revenues. We reviewed the allowable uses for toll revenues, but due 

to ongoing litigation between the PANYNJ and the American Automobile 

Association regarding recent toll increases by the PANYNJ, we did not 

assess the specific purposes and projects for which the PANYNJ uses its 

toll revenues. For consistency, we did not assess the specific purposes 

and projects for which the other bi-state authorities use their toll 

revenues. To determine the extent to which bi-state tolling authorities are 

influenced by the federal requirement that tolls be just and reasonable, 

we interviewed bi-state tolling authority officials and reviewed the federal 

“just and reasonable” standard for evaluating toll increases, in section 508 

of title 33, U.S. Code and conducted a legal review of how this standard 

has been interpreted and enforced by federal courts and federal 

agencies. The results of our legal review are provided in appendix II.

To assess the extent to which the bi-state tolling authorities involve and 

inform the public in their toll-setting decisions, we interviewed officials 

from each of the bi-state authorities regarding their efforts to involve the 

public in recent toll increases. We also reviewed documentation on each 

authority’s most recent toll increase—such as public notices, newspaper 

articles, meeting minutes, board resolutions, and official statements—as 

provided by the authorities and collected from their public websites. We 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-13-687 Interstate Compacts

also examined the bi-state authorities’ interstate compacts and bylaws to 

determine whether their policies for public involvement met several 

practices that incorporate federal and state requirements for involving the 

public, as well as practices used by other tolling authorities. These 

practices include: (1) establishing a documented process for public 

involvement, (2) requiring sufficient opportunities for public comment, (3) 

providing key information to the public, and (4) summarizing public 

comments. We selected these practices through analysis of federal 

requirements for public participation by metropolitan planning 

organizations, state laws for public involvement in tolling decisions, 

guidance on involving the public in transportation decisions from the 

Transportation Research Board, and our previous work on designing user 

fees.1 We also interviewed officials from five bridge toll authorities in 

California and Michigan that were not created by interstate compacts 

regarding their efforts to involve and inform the public in recent toll-setting 

decisions. We selected these authorities because they manage and 

operate tolled bridges that are similar in scale to the bi-state authorities, 

have similar governance structures, and recently implemented a toll 

increase.

To assess the extent to which bi-state tolling authorities are subject to 

external and internal oversight, we reviewed available audit reports and 

interviewed and collected information from the state audit agencies of 

each of the four charter states in our review (New Jersey, New York, 

Pennsylvania, and Delaware) and from the audit organizations within the 

bi-state tolling authorities. To assess external oversight, we reviewed the 

results of recent audits and investigations of the bi-state tolling 

authorities, including an investigation of DRPA completed by the New 

Jersey Office of the State Comptroller in 2012, and several audits of the 

PANYNJ conducted by the Office of the New York State Comptroller. We 

also reviewed relevant state laws in New Jersey, New York, and 

 1

See 23 C.F.R. § 450.316. See also Transportation Research Board of the National 

Academies, Effective Public Involvement Using Limited Resources, National Cooperative 

Highway Research Program Synthesis 407 (Washington, D.C.: 2010); Transportation 

Research Board of the National Academies, Committee on Public Involvement in 

Transportation Planning, State of the Practice: White Paper on Public Involvement

(Washington, D.C.: 2000); FHWA, Public Involvement Techniques for Transportation 

Decision-Making, Publication No.FHWA-PD-96-031 (Washington, D.C.: Dec. 1996); 

Institute for Local Government, Principles of Local Government Public Engagement

(Sacramento, CA: June 10, 2010); and GAO, Federal User Fees: A Design Guide, 

GAO-08-386SP (Washington, D.C. May 29, 2008). 
Appendix I: Objectives, Scope, and 

Methodology

Page 35 GAO-13-687 Interstate Compacts

Pennsylvania regarding the oversight of the bi-state tolling authorities in 

those states and we interviewed officials with the New Jersey Office of 

the State Comptroller, the New Jersey State Auditor, the Office of the 

New York State Comptroller, the Pennsylvania Department of the Auditor 

General, and the Delaware Office of Auditor of Accounts in order to 

describe statutory audit authorities pertaining to the bi-state tolling 

authorities. Because this is a discussion of state law, we are not providing 

an independent analysis as to whether these laws establish audit 

authority over the bi-state authorities. To assess the internal oversight of 

the bi-state authorities, we collected information on the internal audit 

mechanisms in place in each of the bi-state tolling authorities and we 

interviewed the officials from the offices of the inspector general within the 

PANYNJ and DRPA. We compared the external oversight structure with 

GAO’s Government Auditing Standards and other relevant GAO work on 

oversight of non-federal entities,2 and we compared the activities of the 

internal audit entities with the International Standards for the Professional 

Practice of Internal Auditing published by the Institute of Internal Auditors 

and related GAO work on internal auditing.3

We conducted this performance audit from July 2012 through August 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

 2

GAO, Government Auditing Standards: 2011 Revision, GAO-12-331G (Washington, 

D.C.: Dec. 2011); International Organization of Supreme Audit Institutions, General 

Standards in Government Auditing and Standards with Ethical Significance, ISSAI 200 

(Vienna, Austria: 2001); GAO, Inspectors General: Proposals to Strengthen Independence 

and Accountability, GAO-07-1021T (Washington, D.C.: Jun. 20, 2007); GAO, United 

Nations: Status of Internal Oversight Services, GAO/NSIAD-98-9 (Washington, D.C.: Nov. 

19, 1997).

3

The Institute of Internal Auditors, International Standards for the Professional Practice of 

Internal Auditing, (Altamonte Springs, FL: Oct. 2012); GAO/NSIAD-98-9; GAO-07-1021T.
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 36 GAO-13-687 Interstate Compacts

In order to describe the current federal oversight environment, we provide 

this summary of the development of the just and reasonable standard for 

setting tolls on bridges, of significant federal administrative and court 

decisions interpreting it, and of whether courts have found there is a 

private right of action to enforce it. In addition, we discuss several cases 

challenging toll increases brought under the Commerce Clause of the 

U.S. Constitution.1 As detailed below, the federal standard for the setting 

of bridge tolls by states—that tolls be “just and reasonable”—was 

established in federal law in 1906.2 While the standard has remained 

unchanged to the present day, the federal government no longer has an 

oversight role in its implementation.3 The Secretary of War initially had 

responsibility for enforcing the standard, and this responsibility was 

transferred to the Secretary of Transportation in 1968, where it remained 

until the Department of Transportation’s (DOT) oversight authority was 

repealed in 1987. Since that time, a handful of lawsuits have been filed in 

the federal courts in effect seeking to enforce the just and reasonable 

standard. Rather than addressing what that standard means, however, 

most of these cases have grappled with who has the right to enforce it, 

that is, whether the statute creates a “private right of action” for private 

individuals or entities to bring suit to enforce the standard. The U.S. Court 

of Appeals for the Third Circuit has ruled that the statute does not provide 

a private right of action.4 The U.S. Court of Appeals for the Second Circuit 

has issued a ruling applying the “just and reasonable” standard, but did 

not address whether a private right of action to enforce the standard 

exists.5 Lower federal courts have not formally decided the issue but have 

discussed it generally.6 A few of these courts also analyzed a challenge to 

 1

The Commerce Clause provides Congress with the power to “regulate Commerce... 

among the several states...” U.S. Const. art. I, § 8, cl. 3.

2

Act of March 23, 1906, Ch. 113, § 4, 34 Stat. 85.

3

The current requirement that tolls on bridges be just and reasonable is found at 33 

U.S.C. § 508.

4

American Trucking Ass’n v. Delaware River Joint Toll Bridge Comm’n, 458 F.3d 291 (3d 

Cir. 2006).

5

Automobile Club of New York, Inc. v. Port Authority of New York and New Jersey, 887 

F.2d 417 (2d Cir. 1989).

6

Molinari v. New York Triborough Bridge and Tunnel Auth., 838 F.Supp. 718 (E.D.N.Y. 

1993); Auto Club of New York, Inc. v. Port Auth. of New York and New Jersey, 842 F. 

Supp.2d 672 (S.D.N.Y. 2012).

Appendix II: Discussion of the Federal “Just and 

Reasonable” Standard and Significant Federal 

Administrative and Court Decisions Addressing 

Toll Increase Challenges
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 37 GAO-13-687 Interstate Compacts

a toll increase using a Constitutional “dormant commerce clause 

analysis,” which focuses on whether state taxation discriminates against 

or unduly burdens interstate commerce and thereby impedes free private 

trade in the national marketplace.7 These cases are discussed in more 

detail below.

The General Bridge Act of 1906 (1906 Act)8 sought “to establish uniform 

regulations with regard to the construction and operation of bridges 

authorized by Congress.”

9 The 1906 Act also authorized the Secretary of 

War to fix the rates of tolls and stated that:

“[i]f tolls shall be charged for the transit over any bridge constructed under the 

provisions of said sections,...such tolls shall be reasonable and just and the 

Secretary of War may, at any time, and from time to time prescribe the 

reasonable rates of tolls for such transit over such bridge...”

It was not until 1926 that informal congressional guidance specified what 

was entailed in the “reasonable and just” standard. As articulated by key 

House and Senate members,10 the standard meant that tolls for bridges 

should be limited to those necessary to provide a fund sufficient to pay for 

the cost of maintaining, repairing and operating the bridge, and to provide 

a sinking fund to amortize the cost of the bridge, including reasonable 

interest and financing costs, as soon as possible under reasonable 

charges. After the sinking fund had been provided, the bridge was to be 

operated toll-free or with tolls adjusted so as not to exceed its operating 

and maintenance costs. It would take another 20 years before these 

 7

Auto Club of New York, Inc. v. Port Auth. of New York and New Jersey, 842 F. Supp. 2d 

672 (S.D.N.Y. 2012). 

8

Act of March 23, 1906, Ch. 113, § 4, 34 Stat. 85.

9

H.R. Rep. No. 59-182, at 1-2 (1906). See A Study of Federal Statutes and Regulations 

Governing Toll Bridges”, U.S. Department of Transportation (July 1974).

10A new bridge policy was agreed to by members of the Senate Committee on Commerce 

and the House Committee on Interstate and Foreign Commerce as conveyed in 

statements made on the House and Senate floors. 67 Cong. Rec. 8531 (House—April 30, 

1926); 67 Cong. Rec. 8572 (Senate—May 1, 1926).

The Three Federal Bridge 

Statutes
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 38 GAO-13-687 Interstate Compacts

principles were put into legislation under the General Bridge Act of 1946 

(1946 Act).11

The Secretary of War issued very few decisions during the period he was 

responsible for overseeing and enforcing the 1906 and 1946 Acts. 

However, one of the more significant cases involved a complainant who 

argued that it was unjust and unreasonable to divert automobile users’

tolls for the purpose of paying the costs of port development and 

improvements. The Secretary ruled against the complainant saying that 

because Congress had approved the bi-state compact establishing the 

Delaware River Port Authority, which authorized the Authority to pool 

revenues from all of its income-producing activities, and authorized the 

expenditure of revenues so pooled for port development and port 

promotion purposes, the Authority’s decision to use toll revenues for 

those purposes was within its sound managerial discretion. Hence, the 

Secretary determined, the higher tolls could not be said to be unjust or 

unreasonable simply because they contributed to financing operations 

that did not directly benefit highway users.12

The duties for administering the 1906 and 1946 Acts were transferred to 

the Secretary of Transportation by the Department of Transportation Act 

of 1966.13 In addition, the Secretary was given jurisdiction over 

international bridges in the International Bridge Act of 1972 (1972 Act).14

The 1972 Act also included a “just and reasonable” clause where tolls 

could be collected for amortization of the construction or acquisition costs 

of the bridge, including interest and financing costs, and for earning a 

reasonable return on invested capital.15

 11Act of August 2, 1946, Ch. 753, Title V, 60 Stat. 847.

12Camden Bridge Toll, Secretary of the Army, May 4, 1954.

13Pub. L. No. 89-670, 80 Stat. 931 (1966).

14Pub. L. No. 92-434, 86 Stat. 731 (1972).

15Pub. L. No. 92-434, §6(1), 86 Stat. 731 (1972).
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 39 GAO-13-687 Interstate Compacts

From 1970 until 1987, the Federal Highway Administration (FHWA) 

Administrator, to whom the Secretary of Transportation delegated his tolloversight authority,16 determined whether bridge toll increases were “just 

and reasonable” under the 1906, 1946, and 1972 Acts. The first 

significant case in which a court reviewed FHWA’s determinations 

occurred in 1973. The U.S. Court of Appeals for the Eighth Circuit, in the 

Burlington v. Turner case,17 reviewed a decision of the Federal Highway 

Administrator that the toll structure set by the City of Burlington, Iowa for 

its toll bridge over the Mississippi River was unjust and unreasonable 

under the 1906 Act.18 The court found that toll rates for the Macarthur 

Bridge between Iowa and Illinois should be limited to an amount sufficient 

to pay the reasonable cost of maintaining, repairing and operating the 

bridge and its approaches under economical management; to provide a 

sinking fund for amortization of the bridge indebtedness; and to provide a 

reasonable return on invested capital. In 1974, the year after the 

Burlington decision, the FHWA administrator, in the Keokuk Bridge Tolls 

case, applied the principles of the Burlington case and found that an 8 

percent rate of return with added operating and maintenance expenses 

was reasonable. However, because half of the toll revenues went to 

municipal programs and projects unrelated to the bridge, the 

Administrator determined that the rates were not reasonable and just.19

Then in 1979, the U.S. Court of Appeals for the Second Circuit, in 

Automobile Club of New York v. FHWA, 592 F. 2d 658 (2d Cir. 1979), 

upheld the decision of the FHWA Administrator and a lower court allowing 

inclusion of complementary capital improvements to highways or transit 

systems in the rate base for setting tolls for bridges for the Port Authority 

of New York and New Jersey (PANYNJ).

The Surface Transportation and Uniform Relocation Act Assistance Act of 

1987 (1987 Act) repealed DOT’s authority to review bridge toll increases, 

but maintained the requirement that tolls on bridges constructed under 

the authority of the 1906, 1946 and 1972 Acts must be “just and 

 1649 C.F.R. § 1.48(i), 35 Fed. Reg. 4960 (March 21, 1970).

17471 F.2d 120 (8th Cir. 1973).

18The FHWA decision was reviewed first by a district court, 336 F. Supp. 594 (S.D. Iowa 

1972), where the action was brought pursuant to the Administrative Procedure Act.

19In the Matter of Keokuk Bridge Tolls, Federal Highway Administration, April 23, 1974.

Significant Federal 

Administrative and Court 

Decisions During DOT 

Oversight of Toll Increases 

from 1970-1987

The 1987 Act and 

Significant Federal Court 

Decisions since Enactment
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 40 GAO-13-687 Interstate Compacts

reasonable.”

20 The 1987 Act also repealed the 1946 Act’s express 

limitation of the use of toll revenues to specific bridge-related purposes 

such as maintaining, repairing, and operating a bridge. Since DOT’s 

authority for reviewing bridge toll increases was repealed in 1987, the 

federal courts have become the sole forum for challenges to tolls both 

under the statutory “just and reasonable” standard of the 1987 Act as well 

as under the Commerce Clause of the U.S. Constitution.21 A handful of 

federal court cases have applied the “just and reasonable” standard and 

addressed whether private parties can bring suit to enforce it. As 

summarized below, courts in different circuits have reached different 

conclusions or expressed different views regarding whether private 

parties have the right to raise such challenges in court under the “just and 

reasonable” standard. This has not been an issue for those cases brought 

under the Commerce Clause.

(1) Automobile Club of New York, Inc. v. Port Authority of New York 

and New Jersey, 887 F. 2d 417 (2d Cir. 1989) – The central issue of this 

case was whether it was “just and reasonable” for the PANYNJ to include 

losses from the Port Authority Trans-Hudson (PATH) Railroad in the Port 

Authority’s rate base for determining the tolls to be charged for passage 

over the bridges owned by the PANYNJ between New York and New 

Jersey. The plaintiffs contended that that the bridge toll increases violated 

both the statutory “just and reasonable” standard in the 1987 Act and the 

Constitution’s Commerce Clause. The federal district court dismissed the 

“unjust and unreasonable” argument,22 finding that the statutory standard 

had sufficient “flexibility” to allow inclusion of functionally-related but nonbridge (PATH) costs in the PANYNJ’s rate base. The court also rejected 

the argument that including non-bridge costs in setting bridge tolls 

imposed an excessive and unconstitutional burden on interstate 

commerce, Applying a three-part test previously established by the 

Supreme Court,23 the lower court found that (1) the challenged state 

action regulated evenhandedly, with only “incidental” effects on interstate 

 20Pub. L. No. 100-17, § 135, 101 Stat. 132, 174 (April 2, 1987). The just and reasonable 

requirement is codified at 33 U.S.C. § 508.

21The Commerce Clause provides Congress with the power to “regulate Commerce... 

among the several states...” U.S. Const. art. I, § 8, cl. 3.

22Automobile Club of New York, Inc. v. Port Auth of New York and New Jersey, 706 F. 

Supp. 264 (S.D.N.Y. 1989).

23See Hughes v. Oklahoma, 441 U.S. 322, 336 (1979).
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 41 GAO-13-687 Interstate Compacts

commerce; (2) the state action served a legitimate local purpose; and (3) 

there were no alternative means to promote this local purpose that would 

not also affect interstate commerce. On appeal, the Second Circuit, in a 

2-1 decision, upheld the lower court’s ruling that PATH was sufficiently 

related to the PANYNJ’s bridges and tunnels to warrant its inclusion in the 

rate base on which “just and reasonable” bridge tolls were based. The 

Commerce Clause challenge was not raised on appeal. Neither the 

district court nor the Court of Appeals, however, explicitly addressed the 

issue of whether the 1987 Act creates a private right of action.

(2) Wallach v. Brezenoff, 930 F. 2d 1070 (3d Cir. 1991) – In this case, 

New Jersey citizens brought suit against the PANYNJ challenging toll 

increases both under the “just and reasonable” standard found in the 

1987 Act and the Commerce Clause. At the district court level, the court 

granted the PANYNJ’s motion for summary judgment and the plaintiffs 

appealed solely based on the Commerce Clause issues. The Third Circuit 

court rejected the appeal by pointing to the reasons given by the district 

court in Automobile Club of New York, Inc. v. Port. Auth. of New York and 

New Jersey, 706 F. Supp. 264 (S.D.N.Y. 1989), i.e., that (1) the 

challenged state action regulated evenhandedly, with only “incidental”

effects on interstate commerce; (2) the state action served a legitimate 

local purpose; and (3) there were no alternative means to promote this 

local purpose that would not also affect interstate commerce.

(3) Molinari v. New York Triborough Bridge and Tunnel Authority, 

838 F.Supp. 718 (E.D.N.Y. 1993) – The plaintiffs in Molinari brought suit 

against the New York Triborough Bridge and Tunnel Authority, 

challenging the 1989 and 1993 toll increases on the Verrazano-Narrows 

Bridge. They maintained that the tolls were “unjust and unreasonable”

within the meaning of the 1987 Act solely because they were used to 

subsidize the mass transportation components of the Metropolitan 

Transportation Authority. The district court granted the Authority’s motion 

for summary judgment, finding that “plaintiffs have failed to create even a 

triable issue of fact on their claim that the challenged toll increases on the 

Verrazano-Narrows Bridge are unjust and unreasonable.”

24 “[I]f a bridge 

toll generates more revenue than necessary to provide a fair profit or rate 

of return,” the court continued, “the toll may not be challenged 

successfully if it is used to support a single integrated transportation 

 24838 F. Supp. 718, 724 (E.D.N.Y. 1993).
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 42 GAO-13-687 Interstate Compacts

system in which the successful operation of the bridge is dependent in 

whole or in part on the operation of the other related facilities.”

25 The court 

also raised serious questions regarding whether a private right of action 

exists under the 1987 Act, finding that not only does the statute not 

explicitly create such a right, it also lacks the kind of “right- or dutycreating language” that has generally been the most accurate indicator of 

the propriety of implication of a cause of action.”

26 Finally, the court noted 

that the “Supreme Court has . . . been ‘especially reluctant to imply 

causes of action under statutes [such as section 508 of the 1987 Act] that 

create duties on the part of persons for the benefit of the public at large”

27

and that there was a compelling case to be made that a private right of 

action should not be implied.28

(4) American Trucking Association v. Delaware River Joint Toll 

Bridge Commission, 458 F.3d 291 (3d Cir. 2006) – In this case, the U.S. 

Court of Appeals for the Third Circuit found that the 1987 Act’s “just and 

reasonable” provision did not create a private right of action for truck 

drivers to challenge the reasonableness of tolls on bi-state bridges 

 25Id. at 725.

26Id. at 724.

27Id. at 724.

28Legislative history accompanying the 1987 Act shows that Congress was divided over 

how the “just and reasonable” standard was to be enforced following repeal of DOT’s 

oversight responsibility. Senate reports accompanying two bills that preceded the 1987 

Act and which contained language similar to that found in the 1987 Act (the Federal Aid 

Highway Act of 1984 and the Interstate Highway Funding Act of 1985) contained language 

indicating that the federal courts would be the proper forum for challenges pursuant to the 

1987 Act’s just and reasonable standard. Both reports stated that “[by] placing this 

requirement in the statute, the Committee has created a basis for which a user may 

commence suit in federal Court if he or she believes actions of a toll authority are not just 

and reasonable.” See S. Rep. No. 98-524 (1984); S. Rep. No. 99-2 (1985). The Chairman 

of the House Committee on Public Works and Transportation stated, in regard to the 

Surface Transportation and Uniform Relocation Assistance Act of 1987, that “[the] only 

thing we have changed is the forum for making the determination. Toll increases will no 

longer be subject to review by the Department of Transportation; instead the decision will 

be left to the courts in the event of a challenge.” Congressional Record, March 31, 1987.

However, a section-by-section analysis of the bill stated that “State and toll authorities 

would be given greater flexibility in operating toll facilities. Federal oversight of the 

reasonableness of tolls has proven to be administratively burdensome, legally 

unproductive, and has interjected the Federal Government in the role of a mediator in 

disputes which could more appropriately be settled at the State and local level.” Sectionby-Section Analysis of S. 312—Essential Highway Reauthorization Amendments of 1987, 

133 Cong. Rec. S778.
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 43 GAO-13-687 Interstate Compacts

operated by the Delaware River Joint Toll Bridge Commission. The court 

ruled that the statute contained no language that might suggest a 

congressional desire to allow a private suit to enforce the “just and 

reasonable” provision. In the absence of explicit language conferring a 

private right of action, the court addressed whether a private right of 

action could be implied under the Supreme Court’s four-factor test in Cort 

v. Ash: (1) does the statute create a federal right in favor of the particular 

plaintiff?; (2) is there any indication of legislative intent either to create 

such a remedy or to deny one?; (3) is it consistent with the underlying 

purposes of the legislative scheme to imply such a remedy for the 

particular plaintiff?; and (4) is the cause of action one traditionally 

relegated to state law so that it would be inappropriate to infer a cause of 

action based solely on federal law?29 Under the Supreme Court’s first 

factor, the Third Circuit found that the 1987 Act was designed to benefit 

the public at large, not truckers specifically. Under the second factor, the 

Third Circuit found legislative history on both sides of the issue and thus 

no clear expression of legislative intent that a private right of action was 

supported. This was sufficient for the court to find that there was no 

private right of action under the 1987 Act. The Court noted, as an aside, 

that the truckers had not raised any constitutional challenge in this case.

(5) Auto Club of New York, Inc. v. Port Authority of New York and 

New Jersey, 842 F. Supp. 2d 672 (S.D.N.Y. 2012) – In this case, the 

Auto Clubs of New York and New Jersey (together AAA) sought to halt 

toll increases proposed by the PANYNJ for its bridges and tunnels, 

arguing that they violated the Constitution’s Commerce Clause and the 

just and reasonable standard of the 1987 Act. In particular, AAA argued 

that 2011 toll increases on PANYNJ bridges and tunnels which were 

earmarked to fund cost overruns in the PANYNJ’s real estate 

development at the World Trade Center violated the statutory “just and 

reasonable” standard because the increases were not functionally related 

to the PANYNJ’s integrated, interdependent transportation network and 

so should not have been included in the rate base. AAA also claimed the 

toll increases were unreasonable under the Constitution’s so-called 

dormant Commerce Clause because the tolls were not “based on a fair 

approximation of...use” of the bridges and tunnels and are “excessive in 

 29Cort v. Ash, 422 U.S. 66 (1975).
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 44 GAO-13-687 Interstate Compacts

relation to the benefits conferred” on the users.30 AAA sought to stop the 

toll increases both temporarily—on an emergency basis—and 

permanently.

The district court rejected AAA’s request for immediate relief to stop the 

toll increases, finding that AAA did not show, as required, that it would 

likely win the case when all the facts are heard (the case is still ongoing).

The court stated that it did not need to reach the question of whether AAA 

had a private right of action under the 1987 Act. It did, however, raise 

questions about the Third Circuit’s reasoning in the American Trucking 

case (discussed above) saying that it “leaves no means of enforcement 

[for the 1987 Act], making the words ‘just and reasonable’ mere 

surplusage and conflicting with the text and structure of the rest of the 

act.”

31 The district court also questioned American Trucking’s suggestion 

that “the state political process could be the venue that Congress had in 

mind for the airing of toll grievances” since one state’s legislature cannot 

unilaterally modify tolls on a bi-state bridge without impinging on the rights 

of the other state’s citizens in violation of the Commerce Clause. Further, 

the district court questioned the American Trucking court’s use of 

legislative history to justify its decision, since it “waived away Committee 

reports from two earlier (but unpassed) versions of the Highway Act 

containing similar ‘just and reasonable’ language, reports which stated 

that ‘the Committee has created a basis for which a user may commence 

a suit in Federal Court’ upon belief ‘that actions of a toll authority are not 

just and reasonable.’”32

The parties agreed that a 3-prong test applied by the Supreme Court in 

199433 was applicable to determine the reasonableness of fees for the 

use of state-provided facilities by those engaged in interstate 

 30The courts have interpreted the Commerce Clause to include a “dormant Commerce 

Clause,” meaning that by negative implication under the Clause, the federal government 

has power to “prohibit[] state taxation or regulation that discriminates against or unduly 

burdens interstate commerce and thereby impedes free private trade in the national 

marketplace.” See, e.g., Selevan v. New York Thruway Authority, 584 F.3d 82 (2d Cir. 

2009). 

31842 F. Supp. 2d 672, 679 (S.D.N.Y. 2012).

32Id. at 679.

33Northwest Airlines, Inc. v. County of Kent, 510 U.S. 355 (1994).
Appendix II: Discussion of the Federal “Just 

and Reasonable” Standard and Significant 

Federal Administrative and Court Decisions 

Addressing Toll Increase Challenges

Page 45 GAO-13-687 Interstate Compacts

commerce.34 Under this test, a fee is reasonable, and thus constitutionally 

permissible, “if it (1) is based on some fair approximation of the use of the 

facilities, (2) is not excessive in relation to the benefits conferred, and (3) 

does not discriminate against interstate commerce.”

35 Applying this test, 

the district court found that AAA failed to show it likely will succeed on 

either on its Commerce Clause claim or its claim under the Highway Act, 

even assuming a private right of action exists under the 1987 Act.

 34The Commerce Clause provides Congress with the power to “regulate Commerce... 

among the several states...” U.S. Const. art. 1, § 8, cl. 3. From this federal grant of 

regulatory power flows the negative or dormant implication that the Commerce Clause 

“prohibits state taxation or regulation that discriminates against or unduly burdens 

interstate commerce and thereby impedes free private trade in the national marketplace.”

35 Northwest Airlines, above, 510 U.S. at 369, quoting Evansville-Vanderburgh Airport 

Authority Dist. v. Delta Airlines, Inc., 405 U.S. 707 at 716-717.
Appendix III: Public Involvement in Toll 

Increases by Bi-State Tolling Authorities

Page 46 GAO-13-687 Interstate Compacts

Figure 1: Timeline of Public Involvement in Most Recent Toll Increases by Bi-state Tolling Authorities

Appendix III: Public Involvement in Toll 

Increases by Bi-State Tolling Authorities
Appendix IV: Summary of States’ Reported 

Audit Authority over the Four Bi-state Tolling 

Authorities

Page 47 GAO-13-687 Interstate Compacts

Officials from the New Jersey Office of the State Comptroller stated that, 

the office, established in 2007, has standing oversight authority over 

DRBA—and the three other bi-state authorities—under the New Jersey 

state law that enables it to audit and investigate New Jersey “public 

agencies” and “independent state authorities.”

2 However, it has not been 

firmly established in state law or state judicial cases that these bi-state 

authorities are considered “public agencies” or “independent state 

authorities” for the purposes of this law. The New Jersey State Auditor—a 

separate agency from the New Jersey Office of the State Comptroller—

also reported that it has authority to audit the four bi-state tolling 

authorities under a New Jersey state law that provides for a performance 

audit of “any independent authority, or any public entity or grantee that 

receives state funds.”

3 However, the New Jersey State Auditor also stated 

that receiving state funds is not necessarily a precondition for its audit 

authority over DRBA or any of the bi-state tolling authorities.4

Nonetheless, officials with the New Jersey Office of the State Comptroller 

and the New Jersey State Auditor were unaware of reciprocal legislation 

in Delaware recognizing their offices’ audit authority over DRBA. The 

Delaware Office of the Auditor of Accounts stated that it does not have 

audit authority over DRBA because it is not a state agency and does not 

receive state funds. Neither New Jersey nor Delaware has audited DRBA. 

DRBA officials took no position as to whether either state had standing 

audit authority, but stated that DRBA would entertain a request for audit if 

contacted by either state auditor. Although the New Jersey Office of the 

State Comptroller has not been refused access by any of these entities 

there remains an open question as to the applicability of these provisions 

to these bi-state authorities.

 1

Because this is a discussion of state law, we are not providing an independent analysis 

as to whether these laws establish audit authority over the bi-state authorities.

2

N.J. Stat. § C52:15C.

3

N.J. State § C52:24-4.

4

New Jersey State Auditor officials reported that the DRBA has received almost $1.7 

million in New Jersey state funds since fiscal year 2003, primarily for ferry and airport 

projects, and that the Delaware River Port Authority is the only other bi-state tolling 

authority that has received funds from the State of New Jersey—less than $1 million since 

fiscal year 2004 primarily for emergency services. 

Appendix IV: Summary of States’ Reported 

Audit Authority over the Four Bi-state Tolling 

Authorities

Delaware River and Bay 

Authority (DRBA), New 

Jersey and Delaware1
Appendix IV: Summary of States’ Reported 

Audit Authority over the Four Bi-state Tolling 

Authorities

Page 48 GAO-13-687 Interstate Compacts

As with the other three bi-state authorities, New Jersey Office of the State 

Comptroller officials reported that they have standing oversight of 

DRJTBC under New Jersey state law.5 However, DRJTBC officials 

reported that the New Jersey Office of the State Comptroller does not 

have authority to audit or investigate DRJTBC because its audit authority 

is limited to entities within its state and does not extend to bi-state 

authorities. The New Jersey Office of the State Comptroller has not 

audited the DRJTBC, and it could not point to reciprocal legislation in 

Pennsylvania recognizing the New Jersey State Comptroller’s audit 

authority. The Pennsylvania Department of the Auditor General reported 

that under Pennsylvania state law, the DRJTBC must submit biennially to 

a performance audit jointly conducted by the Auditor General of 

Pennsylvania and the State Auditor of New Jersey with a report to be 

issued every odd-numbered year. 6 The first report was to be completed 

by December 31, 1997. Similar legislation was passed in New Jersey that 

would require the Pennsylvania Auditor General and the New Jersey 

State Auditor to jointly conduct annual financial and management audits.7

However, an official of Pennsylvania’s Department of the Auditor General 

reported there is a conflict between the two states’ laws with regard to the 

joint authority and audit schedule, and that this conflict needs to be 

resolved in order for the audit authority to be clear.8 DRJTBC officials 

stated that neither state’s laws amended DRJTBC’s interstate compact 

because the laws were not identical and the two separate requirements 

for annual and biennial audits and different work products cannot be 

reconciled, and any amendments to the compact would require an act of 

Congress. As such, DRJTBC reported that neither New Jersey nor 

Pennsylvania state audit entities have authority to audit or investigate 

DRJTBC. The Pennsylvania Department of the Auditor General and the 

New Jersey State Auditor officials stated that none of the annual or 

biennial audits of DRJTBC cited in the state laws have been conducted 

 5

N.J. Stat. § C52:15C.

6

36 P.S. § 3401, Article IX. 

7

N.J. Stat. § 32:8-10, Article IX, which states that “the Auditor General of Pennsylvania 

and the State Auditor of New Jersey shall jointly conduct annual financial and 

management audits of expenditures and operations of the commission and shall submit a 

report of those audits to the Governors and Legislatures of the Commonwealth of 

Pennsylvania and the State of New Jersey.”

8

In February 2013, House Bill 620 was introduced in the Pennsylvania General Assembly 

that would amend this audit requirement.

Delaware River Joint Toll 

Bridge Commission 

(DRJTBC), New Jersey 

and Pennsylvania
Appendix IV: Summary of States’ Reported 

Audit Authority over the Four Bi-state Tolling 

Authorities

Page 49 GAO-13-687 Interstate Compacts

by their offices either separately or jointly. During the course of our 

review, New Jersey State Auditor officials reported that its office sent the 

DRJTBC a letter to initiate an audit in July 2013, but DRJTBC rejected the 

request stating in a letter that the audit was not authorized by the 

DRJTBC interstate compact or by state laws in New Jersey and 

Pennsylvania. This disagreement between the DRJTBC and the State 

Auditor of New Jersey was yet to be resolved at the time of our report.

According to officials from Pennsylvania’s Department of the Auditor 

General, it does not have the authority to audit or investigate DRPA 

because DRPA is an independent authority and not a state agency. A 

Pennsylvania Department of the Auditor General official also stated that 

because the Auditor General holds a standing, ex officio position as a 

voting member of the DRPA’s Board of Commissioners, he or she cannot 

use his office to audit or investigate the DRPA, and has not conducted 

any audits of DRPA. According to New Jersey Office of the State 

Comptroller officials, the comptroller has standing oversight authority over 

DRPA, and exercised that authority in its 2012 investigative report.

However, this investigation was conducted in response to the request of 

the governors of both states and with the approval of the DRPA board.

Furthermore, New Jersey State Comptroller officials could not point to 

any reciprocal legislation in Pennsylvania recognizing standing authority 

to conduct future audits of DRPA. DRPA officials took no position as to 

whether New Jersey or Pennsylvania have standing audit authority and 

that any decision as to whether to adhere to any state audit requests 

would be a matter for its board to decide.

Officials with the Office of the New York State Comptroller and the New 

Jersey Office of the State Comptroller officials stated that their offices 

have audit authority over the PANYNJ. The PANYNJ confirmed this audit 

authority; and while the Office of the New York State Comptroller has 

conducted several audits, the New Jersey Office of the State Comptroller 

has yet to do so. However, because the access authorities claimed by the

New Jersey Office of the State Comptroller over PANYNJ in its enabling 

legislation9 differ from the access authorities recognized by the 

 9

N.J. Stat. § C52:15C would provide the New Jersey Comptroller with “complete access to 

all government records of public agencies.”

Delaware River Port 

Authority (DRPA), 

Pennsylvania and New 

Jersey

Port Authority of New 

York and New Jersey 

(PANYNJ), New York and 

New Jersey
Appendix IV: Summary of States’ Reported 

Audit Authority over the Four Bi-state Tolling 

Authorities

Page 50 GAO-13-687 Interstate Compacts

PANYNJ,10 it is unclear what specific authorities would be available to the 

New Jersey Office of the State Comptroller if it attempted to conduct an 

audit of PANYNJ. Furthermore, according to officials with the Office of the 

New York State Comptroller, the PANYNJ does not have the same 

requirements as New York state agencies to report its progress in 

implementing recommendations to the Office of the New York State 

Comptroller.

 10The PANYNJ recognizes the New York and New Jersey Comptrollers’ audit authority 

under state law in New York (McKinney’s Unconsolidated Laws of New York, § 7071) and 

state law in New Jersey (New Jersey State Law 32:2‐31, 32). The New York state statute 

states that “the comptroller of the state of New York and the comptroller of the state of 

New Jersey and their legally authorized representatives are hereby authorized and 

empowered from time to time to examine the accounts and books of the port of New York 

authority, including their receipts, disbursements, contracts, leases, sinking fund, 

investments and such other items referring to their financial standing and receipts and 

disbursements as such comptroller may deem proper. Such examination may be made by 

either comptroller at any time or by both comptrollers acting together.”
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 51 GAO-13-687 Interstate Compacts

Susan Fleming, (202) 512-2834 or flemings@gao.gov

In addition to the contact named above, Steve Cohen, Assistant Director; 

Matt Barranca; Melissa Bodeau; Mya Dinh; Dave Hooper; Joah Iannotta; 

Hannah Laufe; Josh Ormond; and Justin Reed made key contributions to 

this report.

Appendix V: GAO Contact and Staff 

Acknowledgments

Contact

Acknowledgments

541095
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