Corzine's "monetization" New Jersey toll roads calls for 50% increase in toll tax every four years
January 08, 2008
The Star-Ledger (New Jersey)
by Deborah Howlett and Joe Donohue
Tolls would rise every four years and be extended to Route 440 as part of the financial restructuring plan Gov. Jon Corzine is expected to offer up in today's State of the State speech, according to individuals involved in crafting the plan.
The Star-Ledger has learned that any added or increased tolls proposed in the plan would not be collected until at least 2010, the year after Corzine would stand for re-election. A person with direct knowledge of the plan confirmed Statehouse reports of a 50 percent toll hike every four years mixed with annual cost of living increases.
Corzine spokeswoman Lilo Stainton said the administration would have no comment on the plan until the governor addresses the Legislature this afternoon.
Three individuals involved in drawing up the plan said Corzine agreed to tolls on Route 440 -- five miles of highway between the New Jersey Turnpike and the Outerbridge Crossing to Staten Island -- because 30 percent to 40 percent of the motorists using the road are from out of state.
The sources, all of whom asked not to be named because they did not want to upstage the governor's speech, said Monday that Corzine also seriously considered imposing tolls on Routes 78 and 80, but ultimately rejected the idea as politically impractical.
Route 440 runs six lanes of traffic from Route 287 through Middlesex County to Perth Amboy. It provides access to the Turnpike and the Garden State Parkway from Staten Island. The road serves as a convenient shortcut for Pennsylvanians traveling to Staten Island and Long Island, and New Yorkers headed south or west through New Jersey.
Assembly Transportation Committee Chairman John Wisniewski (D-Middlesex), a critic of the toll plan whose district includes Route 440, said he has doubts about such a plan but would keep an open mind until Corzine delivers his speech.
"It doesn't sound like a good idea," Wisniewski said. "Theoretically, it's an interstate route, but practical reality is that it's a local road for the people in the 19th District. The goal to grab revenue from out-of-state drivers is going to affect local drivers and push them onto local roads."
Those familiar with the plan said putting tolls on Route 440 is essential if the state is to get even close to the $40 billion windfall Corzine is hoping for from his effort to "monetize" the state's toll roads. It's more likely the plan will end up netting about $30 billion for the state, the sources said.
Corzine said he plans to pay off at least half of the state's $32 billion in debt with those proceeds. That would free up at least $1 billion in the yearly state budget that now goes to pay interest on the debt.
Whatever other money is raised would be used to replenish the Transportation Trust Fund, which pays for road construction, "for years to come," one of the sources said. Without a new infusion of money, the fund is expected to be exhausted by 2011.
The administration has closely guarded details of the plan, which has been in the works for more than a year. Corzine even went to state court to fight against making public a study produced by UBS, the state's outside adviser on the monetization plan.
Corzine during the weekend confirmed that he will propose freezing the state's budget at its current level for next year.
The Star-Ledger reported Sunday the plan also calls for amending the state constitution to require voter approval of any future borrowing by the state, unless it is backed by a dedicated revenue source, such as increased tolls. Republican leaders in the Legislature have been agitating for such a move.
The administration has not revealed the actual amount tolls would rise under the plan. Corzine last summer pledged that any toll hikes would be made according to a schedule that lays out increases year-by-year, and that once the schedule was finished, it would be made public.
Experts have estimated that raising $15 billion would require tripling tolls on the New Jersey Turnpike.
But the plan Corzine will present today reduces dependence on Turnpike toll increases by creating other revenue sources, such as the tolls on Route 440, officials said.
Among the most innovative revenue enhancers, according to one person familiar with the plan, is the sale of "air rights" over the Turnpike. This plan essentially calls for constructing a bridge over certain parts of the toll road and auctioning off the right to develop the property.
The governor's office began briefing interest groups on parts of the plan last night.
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