“We think it punishes people for something they’ve already paid for, and in his program, he’s really going to punish the truckers.”
April 13, 2008
By DAVID W. CHEN
The New York Times
TRENTON — In the old television commercial, the room would turn quiet and all eyes and ears would shift to the man explaining what E. F. Hutton would do.
So it was when Jon S. Corzine, a former co-chairman of Goldman Sachs who was elected governor of New Jersey largely on the strength of his financial acumen, came up with a plan to erase much of the state’s staggering debt by shifting ownership of its toll roads and raising billions of dollars from the sale of bonds.
And while New Jersey residents have for the moment turned their attention from a proposed 800 percent increase in tolls to a punishing state budget, from Tallahassee to Sacramento and from Austin to St. Paul, people who are involved in government, transportation and public finance are keeping a closer eye than usual on Trenton because of the sweeping and unusual nature of Mr. Corzine’s plan.
“We had some discussion in our caucus, and I’m aware of what they’re doing,” said Bernard L. Lieder, a Democratic representative in Minnesota who is chairman of his Legislature’s transportation finance committee.
Yet with the notable exception of a top Bush administration transit official, not one legislator or transportation official of more than two dozen interviewed from around the country was willing to endorse Mr. Corzine’s complex plan.
There was also a recurring theme: While Mr. Corzine made a selling point of the fact that more than half of the revenue collected on the turnpike came from out-of-state drivers, many of them commercial truckers, other states saw that as a reason not to raise tolls sharply.
“We think it punishes people for something they’ve already paid for, and in his program, he’s really going to punish the truckers,” said Frank J. Busalacchi, Wisconsin’s transportation secretary.
Or as Jack L. Schenendorf, vice chairman of the bipartisan National Surface Transportation Policy and Revenue Study Commission, which was created by Congress in 2005, put it: “The idea of foisting costs on the commercial sector to basically pay down New Jersey’s debt is going to hurt competitiveness.”
Still, many officials said it would be foolish not to study Mr. Corzine’s plan closely for clues as what to do — or what not to do — in their own states.
“I’m really intrigued with Corzine’s proposal because they really have to do something in New Jersey, and people like me assume that Corzine, especially with his background, realizes that,” said Scott Pattison, executive director of the National Association of State Budget Officers. “One hopes that people really do step back and really analyze this. It’s too easy to say, ‘I don’t want to pay higher tolls.’ ”
Under Mr. Corzine’s proposal, New Jersey would set up a public benefit corporation that would sell up to $38 billion in bonds backed by four toll increases of at least 50 percent between 2010 and 2022 on the New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway. The proceeds would go toward retiring half of the state’s $32 billion debt, and provide funds to maintain its roads and bridges.
In the more than three months since he introduced his plan and traveled around the state to try to sell it, Mr. Corzine has encountered stiff resistance from the public, Republican lawmakers and even many of his fellow Democrats. Administration officials now say they expect him to propose modifications in the next month or so.
Outside the metropolitan area, the reception has generally been less hostile, though that could be because fewer than half of the states — particularly those outside the Northeast — have toll roads, while others are reserving judgment and keeping track of various proposals to raise much-needed revenue. For instance, Pennsylvania has said it plans to make Interstate 80 a toll road.
“I think everyone is struggling with how you pay for infrastructure,” Mr. Corzine said in an interview. “If we get to a restructuring of the restructuring, I think there’ll be more interest in how you both put together a policy and the politics that will allow you to deal with the real problems.”
Some officials elsewhere — particularly in fast-growing Southern states like Texas and Florida, which sorely need new roads — say they are simply envious that New Jersey’s tolls have been among the lowest in the country.
“We’ve got three choices in this: no roads, slow roads and toll roads,” said Robert Black, a spokesman for Gov. Rick Perry of Texas. “Tolls have to be part of the solution, whether it be this state or any other state, simply because there is no other revenue stream out there. So any kind of outside-the-box thing is welcome at this point because you can’t do things the way you have in the past.”
At the same time, nearly everyone interviewed expressed concern about Mr. Corzine’s plans to dedicate roughly half the bond proceeds to expenses other than transportation.
“I would disagree with using tolls as a source to generate revenue for other things, especially if it’s just to make up for a government shortfall,” said Carey L. Baker, a Republican in the Florida State Senate who is chairman of its transportation committee.
At least Mr. Corzine is trying, said Joe Markosek, a Democratic representative in Pennsylvania who is chairman of his chamber’s transportation committee.
“I think we’re looking at it in terms of, ‘He’s trying to do the best he can under a very, very difficult situation — much worse than ours,’ ” he said. “But he was Mr. Goldman Sachs.”
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