Sunday, November 26, 2006

New Jersey bosses seek toll road slush fund

New tolls a road N.J. can't take, experts say

Using funds to provide property tax relief not likely to win approval


Copyright 2006

TRENTON -- An idea to convert some of New Jersey's interstate and state highways to toll roads to generate money for property tax relief may face a speed bump.

Federal highway regulations say if such a conversion is made, the money has to be used for transportation and requires Federal Highway Administration permission, which is only granted under certain circumstances.

Experts said that collecting tolls and using that money to offset property taxes hasn't been done in other states, and they doubt such a plan would get federal approval.

"To go directly to property tax relief is a reach. The (thing) they (federal officials) visualize is to keep it in the transportation vein," said Neil Grey, government affairs director of the International Bridge, Tunnel and Turnpike Association. "There is no precedent."

The idea of creating new toll roads on existing highways was among the revenue-raising ideas examined in a Nov. 15 report for the state by UBS Investment Bank.

That report ranked creation of new toll facilities to be "very viable.'' However, it cautioned that there could be "heightened construction risk from those assets needing extensive capital investment."

Potential new toll roads suggested include Routes 78, 80 and 95, in addition to state Route 440.

State Department of Transportation Commissioner Kris Kolluri said the idea is worth studying to get data for long-range planning. Transportation advocates say it's a way to fund reconstruction of those roads and to finance the state Transportation Trust Fund when it runs out of money in four years.

Since 1995, federal highway law has relaxed past prohibitions on collecting tolls on interstate highways. Even with the most recent revision in August 2005, however, the circumstances for converting interstate highways to toll roads are limited.

"There is language that says for a bridge or tunnel on the interstate system, that if the state rebuilds it, they can bring it back as a toll facility," Grey said.

The 2005 legislation also allows use of tolls as a pilot program on up to three existing interstate facilities nationally, such as a highway, bridge or tunnel. It permits tolls to be used to fund needed reconstruction or rehabilitation on interstate highway corridors, which couldn't be adequately maintained or improved without the collection of tolls.

It also allows tolls to be imposed to build high-occupancy or express lanes.

Each of those scenarios requires the state to apply to the Federal Highway Administration for approval, starting with filing an "Expression of Interest."

No application has been filed by New Jersey, and because of that, highway administration officials had no further comment on the concept, said spokeswoman Nancy Singer.

In such a case, federal officials generally expect that toll revenues are used for transportation, Grey said. The imposition of tolls also means that federal funds may not be spent on that road, bridge or tunnel, he said.

"Those are questions we have to ask. Part of the review requires us to look at (federal) transportation law," Kolluri said. "That is the next step."

Even if the governor decides not to proceed with the toll conversion, the next phase of study will give DOT a wealth of information about future traffic demands, which can help long-term planning, he said.

"Looking at one interstate gives us a base line that we can interpolate (to others)," Kolluri said. "I-78 and 80 provide the major data we're looking for."

Those roads were selected because they are major arteries for commerce and are main corridors, he said.

Other states have toyed with the idea of putting tolls on major interstate highways, particularly in the southern Mid-Atlantic states, as a way to get revenue to maintain the roads from corridor traffic, Grey said.

"Traffic uses their road, but drivers don't buy gas (funding roadwork through gas taxes), and they talk of tolling to capture revenue,'' Grey said. "The truckers have issues with that and invoke restraint of trade arguments."

Transportation advocacy groups such as the Tri-State Transportation Campaign contend that the idea is worth looking at as a way to fund the state's Transportation Trust Fund.

"There's a potential revenue stream, and we know in four years the Transportation Trust Fund runs out," said Damien Newton, Tri-State's New Jersey coordinator. "It is an open opportunity to raise a lot of money."

In four years, all the revenue from the state's gas tax will be needed to pay off past debt, meaning that new funding sources for road and transit projects will have to be found.

Side benefits include not having to rely on borrowing money to fund transportation projects, and the ability to use toll discounts during non-peak travel times to spread traffic out, he said.

Newton said money raised by tolls shouldn't be used elsewhere.

"Our position is money generated by transportation should be used for transportation, so the state doesn't have to use bonding," he said.

© 2006