Corzine's Cash Cow Chimera: So-called 'public benefit corporation' would run toll roads and "solve the state's financial problems."
As it wouldn't be state agency, open records act wouldn't apply.
January 12, 2008
By Trish G. Graber
TRENTON | New Jersey residents may have little ability to scrutinize the company that would run the state's toll roads under Gov. Jon Corzine's debt-reduction plan.
The state-created nonprofit, termed a public benefit corporation, would not legally be held to the state law that requires government agencies to release information under the Open Public Records Act, administration officials said Thursday.
"This is not a state entity," Corzine's chief of staff Bradley Abelow said.
However, Abelow said the administration is still working out contract specifics, including potentially writing in a provision requiring that the corporation comply with OPRA.
The administration also has yet to work out whether the corporation would be subject to caps on management salaries or whether limits would be set on bonuses handed out to company executives. It is also unknown whether board of directors' meetings would be public.
"At a minimum there would be an annual public meeting," said Treasury spokesman Tom Vincz, as required by 501c3 companies, or nonprofits.
Corzine has worked to construct the long-awaited plan so the so-called public benefit corporation, which would operate the New Jersey Turnpike, Garden State Parkway, Atlantic City Expressway and newly tolled Route 440, would be separate from the state, and the political whims of the Legislature.
That's because the corporation would ultimately bond against revenue from future tolls, which are expected to rise by 50 percent once every four years from 2010 to 2022 and be adjusted at four-year intervals for inflation.
The company would generate up to $37.6 billion to pay down at least half of the state debt and to fund state transportation improvements.
Administration officials said separating the corporation from the state is key to attracting bondholders.
It will also ensure the billions in debt incurred by the corporation would not show up on the state's books.
Comparable to a private company, the public benefit corporation would have an independent board of directors, which would initially be chosen by a search team commissioned by Corzine. The corporation board successors would be subject to the approval of a second board with Corzine-appointees representing the public and government, under a second company, called the Public Interest Corporation.
The plan is "extraordinarily far-ranging and sweeping in scope," but is necessary to solve the state's financial problems, Abelow said Thursday. Those include $30 billion in debt, $25 billion in unfunded pension liabilities and $58 billion in post-retirement medical liabilities.
Administration officials said there are still many details of the contract between the corporation and the New Jersey Turnpike Authority, which will remain largely inactive, to be worked out.
"This is not a structure designed to enrich anyone," Abelow said. "We've got big problems ... doing things the same way over and over has effectively made our problems worse over time."
Trish Graber is Trenton correspondent for The Express-Times. She can be reached at 609-292-5154.
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