Toll plan, redux — traffic on Rt. 1 and Rt. 130

One more thing about the toll plan: Will it force drivers from the Turnpike onto local roads like Route 1 and Route 130? How can it not?

(E)conomists say the higher tolls could mean less money spent at a restaurant or hardware store, or drivers clogging local roads to avoid the tolls.

“There will be strategies emerging to avoid bearing those costs,” said James W. Hughes, the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

Be prepared for an increase in traffic in South Brunswick and Cranbury.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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Plan could take its toll

The governor is preparing to hit the road to sell his plan to use the state’s toll roads to restructure New Jersey’s debt, and from all accounts it looks as though he will not be facing a willing buyer.

The public in a series of polls last year expressed opposition, though admittedly it was being asked to comment well before a plan was on the table. At the time, there was still some fear that the state would sell or lease its roadways to a private company, which would have a direct impact on the roads’ management and maintenance. The plan unveiled this week does not do that. But it still is not going to be an easy sell — nor should it be.

Consider this comment in The New York Times today from a regular driver on the N.J. Turnpike:

With a sense of resignation in his voice, Ed Daly, who had stopped for a snack at the Joyce Kilmer rest area, just north of Exit 8A, said, “Tolls fall heaviest on the working man.”

Mr. Daly, the paper points out, is “a sales manager for a communications company in Clifton, who said that he traveled the turnpike every day, spending $50 a month in tolls.”

Once the first increases take effect in 2010, that would jump to $75, and he would have to absorb the difference by himself.

“Talk about a regressive tax,” he complained.

The Times story offers several other complaints from drivers that, when combined with this story in The Star-Ledger on state E-ZPass data, make it clear that Gov. Jon Corzine is getting ready to head into the belly of the beast.

Dismissing the toll plan out of hand is difficult, however, because of the severe fiscal crunch facing the state, a financial catastrophe that should be common knowledge but that appears not to be fully understood by the state’s residents. Everyone wants — and deserves — real property tax reform (the property tax is regressive), but few seem willing to pay the cost in higher state income taxes, drastic changes in the organization of local government or the kind of severe spending cuts that would be required to make it happen.

Add this to the fact that we still pay among the lost tolls and gas taxes in the country and it is clear that toll hikes should not be taboo.

That said, the governor’s plan is rather extreme — the numbers he outlined were staggering, boosting the cost of a trip from the Delaware Memorial Bridge to the Lincoln Tunnel from $5.85 to $48 over the next 14 years — and regressive, especially coming from a staunch liberal Democrat.

The governor was right to demand that critics place a better alternative on the table, rather than just stating their opposition. Republicans, in particular, have been very good at offering complaints and vague suggestions — cut the budget, they say, but rarely offer suggestions as to what could be cut, knowing that once they do that they will have to deal with the wrath of those who will lose out.

That said, I think we are destined to accept at least a scaled-down version of the governor’s plan, combined with other changes. Personally, I’d propose an significant increase in the income tax, municipal consolidation, broader school-funding reform and universal health care coverage (expanding coverage to everyone in New Jersey, possibly using the model in place in Massachusetts, could lessen the costs to the state of covering not only current employees but retirees; the Massachusetts approach is not perfect, but might be our best bet until the federal government addresses health care on a national level).

At the very least, I am hoping that the drastic nature of the governor’s plan will shock taxpayers into understanding how dire the state’s fiscal condition is, making it more likely that something can be accomplished.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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Borrowing to pay down the debt


This is a lot to take in. The governor is proposing borrowing enough money to cover paying down a large portion of the state’s debt, but also to replenish the state’s Transportation Trust fund and maintain the state’s toll roads for years to come.

Gov. Jon Corzine is billing his toll road proposal as a way to bail out a state awash in debt, a state with a political class that has relied on a host of gimmicks and accounting tricks to spend like drunken sailors while pushing off the consequences for another time.

That time is now. Debt payments are consuming a greater portion of the state’s budget every year. In addition, the state’s pension and healthcare funds are woefully underfunded. Together, these obligations are crowding out other priorities — including real property tax and educational funding reform.

Yes, the Legislature did provide some nominal tax relief this past fall. And yes, it approved on Monday a new school funding formula that calls for a $500 million boost in overall state spending on schools.

The reality, however, is that both of these accomplishments were nothing more than nibbling — a much larger infusion of state cash into local school is needed both to ensure equality of educational opportunity and to reduce the amount spent locally in property taxes. And this does not take into account the cash needed to build the affordable housing units needed both to provide housing and to desegregate this horribly segregated state.

Will the toll-road plan address these issues? Perhaps. The governor certainly seems to think so.

In a speech that may be the most important of his political career, Corzine described his plan as “comprehensive and sober,” adding that is bound to be “controversial.” He ticked off its four elements, some of which Republicans have been demanding for years.

“One: Freeze spending now,” Corzine said. “Two: Limit future spending to revenue growth. Three: Capture the enterprise value of our tollways to pay down debt and make capital investments. Four: Limit borrowing by requiring voter authorization.”

“If there is a better plan, I am open to its consideration,” he said. “Put it on the table.”

According to The New York Times, the governor wants to boost highway tolls over the next 15 years (by 50 percent in 2010, 2014, 2018 and 2022), while borrowing between $30 billion and $38 billion “to help the state pay off half of its debt and pay for transportation improvements.” The plan also calls for the state to “establish two new agencies, one to operate and maintain the roads, and the other to provide some oversight.”

It is an ambitious plan, that’s not in question; there is no way to address years of political timidity without being bold and ambitious.

What is questionable is whether this plan is the right plan to address the state’s woes. That’s a question I can’t answer at the moment.

My initial sense, however, is that this is just another in a long line of gimmicks foisted on taxpayers — though there is a twist: Taxpayers will not be the ones on the hook for the plan; drivers, the majority of whom the governor says come from out of state, will be. That, in the end, is his chief selling point.

At least the governor is being honest. Unlike his predecessors, who revalued the state’s pension plan so that they could avoid making payments into the fund (I’m talking to you, Christie Whitman and Jim McGreevey), Gov. Corzine is being honest about this plan and the pain, about its risky nature and about the pain it will cause for drivers.

I’m skeptical, but will keep an open mind. It’s now up to the governor, in his upcoming statewide dog-and-pony show, to convince voters and state legislators that his plan offers far more good than ill.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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Sinking ships

I wrote yesterday about the governor’s announcement that he plans to move forward with his monetization plan, even if it means driving smack into the brick wall of public opinion.

“I’m willing to lose my job if that’s necessary to set our fiscal house in order.”

But, as The Asbury Park Press (an editorial page that I often disagree with) points out, the plan really is nothing more than another gimmick,

borrowing today what will have to be paid back tomorrow through taxes or tolls. It’s another quick fix that will bring an influx of cash that will be quickly frittered away, saddling either the commuters of New Jersey or the next generation of taxpayers with an even heavier financial burden.

The governor is right about the state’s finances and, as he has said over and over, the fiscal condition in the state makes it difficult to do the kinds of things that will make the lives of the people living here better. But gimmicks are the wrong way to address the issue.

The Press says the governor should try a different tack:

Corzine may have faith in his ideas to wring billions of dollars out of the state’s toll roads to cut the state’s borrowing debt in half and provide permanent funding for transportation projects. We don’t. Neither do many of the state’s residents, especially the commuters who would unfairly shoulder the burden of Corzine’s plan with the dramatic increase in tolls.

Corzine should instead insist that the Legislature get to work doing what most households have been forced to do in the face of skyrocketing property taxes over the past several years: Cut spending. He should make the state do what New Jersey families have done as a horde of new taxes and fees has driven their cost of living steadily higher: Eliminate waste and cut out “extras.”

This would be a good start, but it will not be enough. The state needs to completely reform its way of doing business — including streamlining government at all levels and reducing the number of towns and school districts.

New Jersey residents, as well, will have to reconsider what they believe is important. To right the fiscal ship while also cutting property taxes, New Jersey residents will have to sacrifice some things. I can’t say what — that will have to be up to those affected. That’s why we need to convene a constitutional convention that brings nonpolitical representatives together to hash these questions out.

The politicians have had their opportunities and failed miserably. It’s time to give someone else a try.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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