- The Washington Times - Sunday, October 9, 2005

New Jersey weighs sale

of toll road to

fund repairs

New Jersey, the state with the most highways per square mile, is considering selling the granddaddy of them all: the 148-mile New Jersey Turnpike.

Acting Gov. Richard J. Codey last month ordered a study on how to replenish the cash-strapped Transportation Trust Fund, the state’s biggest source of highway construction and mass-transit financing. One option is selling the New Jersey Turnpike Authority, owner of the turnpike and Garden State Parkway.

Singers from Simon and Garfunkel to Bruce Springsteen have invoked both the pace and the grimy urban landscape of the turnpike in their lyrics. Mob boss Tony Soprano takes the turnpike past refineries, low-rise suburban sprawl and Exit 13A in the opening credits each week on “The Sopranos” cable-television show.

The turnpike runs from the Delaware Memorial Bridge to the George Washington Bridge in New York. When it opened in 1951, the roadway served 787,195 vehicles a year traveling 38 million miles. Fifty years later, it served 230 million vehicles traveling 5.7 billion miles.

It costs $6.45 to drive the entire turnpike today in a passenger car.

Sen. Jon Corzine, New Jersey Democrat and front-runner in the governor’s race that will be decided in November, has supported Mr. Codey’s decision to consider selling or leasing the toll roads instead of increasing a fuel tax with gasoline prices near record highs.

“People are looking seriously at selling the turnpike because gasoline prices are making a large gasoline tax increase politically more difficult,” said Damien Newton, New Jersey coordinator for the Tri-State Transportation Campaign, which advocates for regional transportation improvements.

Mr. Codey first proposed a toll road sale in January after reading that Chicago received $1.83 billion from investors who leased the right to run the city’s 7.8-mile Skyway Bridge for 99 years, members of his administration said.

New Jersey faced a $4 billion budget deficit at the time, and selling the roads would have raised cash to balance the budget. Lawmakers cut tax rebates instead. The state now must find at least $800 million in annual revenue by July 1 to pay for transportation projects.

A Spanish-Australian consortium called Cintra-Macquarie paid Chicago to lease the Skyway. The group will profit if the tolls collected exceed the amount spent to maintain the road.

The turnpike and 173-mile parkway produce $716 million in tolls each year, Merrill Lynch & Co. analyst Philip Villaluz said in a July report. Mr. Villaluz estimated the state might make $22.5 billion by selling the authority. The state Office of Legislative Services said the profit would be as little as $3.4 billion after the authority’s debt is paid.

Any proposals on how to raise money to replenish the trust fund likely will be made after the Nov. 8 election, said John Wisniewski, chairman of the Assembly Transportation Committee.

Mr. Corzine is running against Republican Douglas Forrester, and all 80 Assembly seats are up for election.

Mr. Corzine said the gasoline tax should be raised only as a last resort. He wants the state to consider selling or leasing land along highways and rail lines, or entire toll roads.

Mr. Forrester called the idea of selling the turnpike “crazy,” saying Democrats who control the Legislature would squander any profit from the sale. He said the state should dedicate more fuel taxes to the transportation trust and take revenue from other programs.

“Selling a capital asset like this before we put our house in order is a dumb thing to do,” Mr. Forrester said at a Sept. 26 press conference.

If New Jersey doesn’t replenish its transportation fund, the state will lose the ability to sell bonds backed by its revenue and federal aid that matches what the state spends, Mr. Wisniewski said. The trust, created in 1984, was intended to be a steady revenue source for highway and mass-transit projects. Two-thirds of the money comes from fuel taxes, and a third from sales taxes.

The fund’s debt has surged to more than $7 billion as the state borrowed to pay for capital projects and to plug budget deficits. By July 1, all of the revenue for the trust will have to be used for debt service.

Without new funding, the state won’t have money for new projects, said Thomas Dallessio, president of the Regional Plan Association, which monitors transportation policies in New York and New Jersey.

“We’re going to have a transportation meltdown on July 1 if no one acts,” Mr. Dallessio said.

New Jersey has the third-lowest gasoline tax in the nation, trailing only Wyoming and Alaska, according to the American Petroleum Institute. The last time New Jersey raised its gasoline tax was in 1988.

An increase would be difficult because New Jersey residents pay the highest property taxes and have one of the highest costs of living in the United States, said James Hughes, dean of Rutgers University’s School of Planning and Public Policy in New Brunswick.

New Jersey would need a 20-cent increase in its gas tax to finance its transportation needs, said Mr. Newton of the Tri-State Transportation Campaign.

“Obviously, that’s not going to happen,” Mr. Newton said.

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