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By Anonymous Mike, pseudonymously.



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Sunday, January 20, 2008
 
Radar Love

Governor Napolitano's proposal to implement statewide photo radar as a revenue-generating initiative to partially close the estimated $1.7 billion budget gap for FY2009 has drawn alot of attention in the media.

Espresso Pundit has a good take on the dangers of government using enforcement as a revenue generating measure. I on the other hand have a more prosaic concern

Will this thing actually generate the level of revenue claimed by its supporters? Not a small concern because the initiative is being forwarded as a way of forestalling budget cuts.

The Governor is proposing to install across the state 100 photo radar cameras at a total cost of $35 million. Let's take that cost as a given. She then claims that those 100 cameras will generate $125 million in revenue each and every year; providing the FY 2009 budget a net revenue (after subtracting start-up costs) of $90 million.

Can it be done?

$125 million net per year works out to $1.25 million per camera. The key term here is net because many there alot of costs involved in operating the systems and collecting revenue, ask some East valley cities who run photo red-light systems if their programs are the cash cows everyone think they are (they aren't.)

The closest existing system to the one the Governor is proposing is the Loop 101 photo radar system installed by the City of Scottsdale and assumed by the Arizona Department of Public Safety. I have been unable to find financial data on how the system has fared after DPS took over operations but during the 9 month start-up period Scottsdale recorded a net revenue of $800,000 for the entire 6 camera system.

You can do the math, but what Scottsdale earned is alot less than $1.25 million per camera.

The second issue is timing. The Governor has already included a full year of revenue in the FY 2009 budget, which starts July1st. That means the budget has to be passed, equipment purchased and installed, and the whole system tested and brought up to speed by then in order to have any chance of making what already seems to be overly optimistic revenue projections.

Given these problems and the ones that Espresso Pundit has already identified, I would hope the Legislature would give the Governor's proposal a full hearing.