Friday, February 02, 2007

"When government argues that its most basic roles would be better handled by a private enterprise, then the competence of those in office is indicted"

The leasing of toll roads to private operators defies common sense


Charles Paolino
New Brunswick Home News Tribune, NJ
Copyright 2007

I have one reservation about this plan to pay off state debt by leasing or otherwise turning over control of the toll roads to a private operator: It doesn't make sense.

Or is it wrong to apply that standard?

I realize this is a complicated proposition whose details are beyond my capacity to understand, but shouldn't even complicated matters be required to withstand the test of common sense? Indulge me in this.

These highways are now operated by an authority that is a creature of the state; they are supposed to generate enough revenue to pay the cost of operating them and to amortize any debt.

The authority — whose existence is justified in part on the grounds that it protects the state's own borrowing power — also insulates the operation of the toll roads from direct accountability to voters.

If the highways were leased to a private operator, that scenario would change. The private operator would have to raise more revenue than it takes to operate the roads, because the private operator would have to make a profit — without even considering the billions of dollars it would have paid to the state for the lease. Indeed, annual toll increases limited by the rate of inflation would be built into the program. And the operation of the toll roads would be further insulated from direct accountability to voters.

As it is, even the appointed authorities — when there were two — were very conservative about raising tolls on the turnpike and the parkway, and yet they kept them among the best maintained highways in the state.

How is it possible that a private operator could run the highways at the same level without significantly increasing the tolls? And, being one more step further removed from voters, what incentive would the operator have to keep the tolls stable?

Considering the perennial sentiment in New Jersey that the tolls should be removed altogether — a sentiment I don't agree with — I would expect motorists to be wary of a proposal that seems destined to preserve the tolls ad infinitum and raise them each year.

The reason highways are operated by government in the first place is that they are among the most fundamental public services. Governments should be able to operate them in the most cost-efficient manner, because government's only goal is to provide for the public's need.

When government argues that one of its most basic roles would be better handled by a private enterprise, when government finds itself financially embarrassed and wants to solve its problem in the short term by abandoning one of its most basic responsibilities for the long term — and with a solution that defies common sense — then the competence of those in office is indicted.

When private businesses experience financial crises they respond by reducing their workforce and consolidating operations. I've experienced this more than once; it isn't done with smoke and mirrors, it's done by finding real savings.

That happens in every industry, but not in government.

Instead of ceding control of some of the state's most critical assets, the Legislature and the administration should calculate what reduction in spending is needed in order to satisfy its debts, and then follow the painful path of the private sector and make those cuts.

Charles Paolino is executive editor of the Home News Tribune. (732) 565-7210. E-mail:

© 2007 Home News Tribune:

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