tolls – Hank Kalet

A debate without trust

We have entered the zone of pure politics, as though we’ve been operating outside of it since Gov. Christie first entered the race for New Jersey governor in 2009.

I don’t mean that as a crack against the governor, but against the entire political environment that has overtake the state since he took office and the state began operating under a divided government.

Political games are the norm these days, but the debate over the governor’s canceling of the ARC tunnel, what should be done with the ARC money allocated by the federal government and whether toll hikes approved to cover the tunnel project should be repealed has descended into pure nonsense.

What we know is this: The Democrats want to repeal the toll hikes; the governor wants them to stay in place and he wants to use the money to help replenish the Transportation Trust Fund. The Office of Legislative Services says the hikes can be repealed; the N.J. Turnpike Authority’s bond counsel says doing so will damage the authority’s ability to raise money.

The memo warns that among the potential ramifications are litigation brought against the Turnpike Authority or state by bond owners.

The Turnpike Authority may not be able to issue enough bonds to entirely fund its $7 billion Capital Improvement Project, and the ratings on the Turnpike Authority bonds would likely be lowered. The U.S. Securities and Exchanges Commission could investigate or bring litigation against the Turnpike Authority based upon financial projections that included the revenue from the hikes, the memo says.

“Any such downgrading of the Bonds will increase the costs of the Authority’s future borrowings and impair the Authority’s ability to borrow needed capital funds,” it reads.

Bleak, to say the least. The question is not so much who is correct — the bond counsel’s opinion is just that, an opinion. The question is not about fact, but about policy, though the argument is being portrayed by the political ones as an argument over facts.

Let’s consider several other facts: The state Transportation Trust Fund has gone bust and someone will need to pay to refill it. We could do so by boosting the state gas tax, by using toll money or by raising general purposes taxes.

The gas tax is a use-based approach. If you drive in New Jersey, you pay the freight. The toll approach is also use-based, but targets a subset of drivers, most of whom are from out of state. The general tax approach hits everyone — including those who don’t drive. Which of these is best? Again, this is a policy debate. I would argue for the gas tax because it holds the potential of altering our driving behavior, but that is not on the table — the governor has promised to veto it. Same goes for the general tax — a problematic approach anyway.

The toll hike has been passed, is supposed to generate $1.25 billion in revenue. The governor wants to put it in the trust fund, which is used to repair and maintain roads and bridges and expand public transportation.

I’ll let you be the judge.

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Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
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What side are they on?

New Jersey politics makes little sense. Democrats are calling for a rollback of toll hikes, while the Republicans want the new tolls to fund the Transportation Trust Fund. When did the world flip upside down and Republicans suddenly supporter higher tolls?

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Another faulty toll-hike plan

The N.J. Turnpike Authority has gone back to the drawing board again and has come back with yet another plan to raise toll revenue to pay for infrastructure improvements.

The plan, outlined in a letter from Transportation Commissioner Kris Kolluri to Gov. Jon Corzine yesterday, is pretty straightforward — tolls would be increased by about 42 percent on the turnpike and 43 percent on the parkway in December and 53 percent on the turnpike and 50 percent on the parkway in 2012, not taking into account discounts for off-peak use, fuel-efficient vehicles and senior drivers. (For instance, a driver getting on at Exit 8A and heading to 13A — the Newark Airport — now pays $2.20 for E-Zpass during peak hours; with the increase, the same trip would cost $2.55.)

Kolluri’s letter says that the toll hikes would fund a $7 billion, 10-year capital plan, along with a $1.25 billion contribution to the Transportation Trust Fund Authority for a new mass-transit tunnel under the Hudson River, linking New Jersey and the Penn Station in New York. The capital plan would include widening of both roads, bridge replacement and other projects.

It is the third — I think — time that a toll hike has been put on the table, either by the governor or the authority, and while the latest proposal would be less burdensome than previous plans, it still is badly flawed.

As we’ll point out in an editorial tomorrow, the Republicans are opposing it because they say it will be an added expense that could further hurt the economy. They also question the constitutionality of using toll revenue for the tunnel project.

Zoe Baldwin, of the Tri-State Transportation Campaign, which opposes the toll hikes, told me in an e-mail today that the organization stands by its September testimony during which it questioned the need for the two largest capital items — the widening of the turnpike and parkway — and raised concerns about the impact that the toll plan would have on other infrastructure needs.

“The new capital plan still asks taxpayers to pay for billions dollars of unnecessary road expansion at a time when fiscal responsibility is most needed,” she said.

In a follow-up e-mail, she added, that the reduced scope of the parkway expansion still made little sense.

“In reference to the Parkway, half of a bad project is still a bad project,” she wrote. “Overall, the New Jersey Turnpike Authority needs to be able to prove, with numbers, why they are proceeding with a given project. To this date, they have not empirically shown that the additional lanes will alleviate congestion.”

Kate Slevin, executive director of the campaign, told the Turnpike Authority in September that the organizatiojn “has two serious problems with the toll hike proposal.”

First, we worry that action taken now to dramatically increase tolls for NJ Turnpike Authority projects could undermine future action necessary to replenish the state’s Transportation Trust Fund, which will run dry in 2011. Starting then, the Trust Fund will require a substantial infusion of money to pay for bridge repair, road maintenance, intermodal programs, transit projects, and biking and walking programs across the state. We understand that the Turnpike Authority’s bond covenant requires a toll increase to cover next year’s expenses and debt service obligations, but we believe a 10 year, 9.7 billion dollar capital program is too ambitious less than 2 years before the Transportation Trust Fund runs dry. The more tolls are increased today to pay for Turnpike capital projects, the less receptive elected officials and the public will be to increasing other transportation fees to pay for replenishment of the Transportation Trust Fund, and the Fund must be our priority.

Second, a case has not been made for the Turnpike and Parkway widenings, which under the best case scenario, will cost a whopping $3.3 billion to build, or, about one third of the 9.7 billion dollar capital program NJTA is discussing today. There is no evidence that these projects, as designed, will relieve congestion in the long run, and both run counter to state goals to curb greenhouse gases. Therefore, they are not smart investments.

The projects won’t relieve congestion because studies have shown that absent of demand management strategies, wider roads simply fill with more traffic. In fact, traffic projections released by the NJ Turnpike Authority show that the section of the Garden State Parkway the Authority proposes to widen will be as or more congested by 2025 with three lanes as it is today. NJ Turnpike Authority documents also show that the widened Turnpike will quickly fill its added capacity. It’s 2008, we need more innovative and effective solutions to traffic jams.

And we have them. There are much effective, not to mention cheaper, alternatives to manage traffic, such as congestion pricing, high occupancy toll lanes, mass transit, or, better freight management. However, none of these have been adequately studied for the Parkway or Turnpike. Shouldn’t the state study all possible alternatives and prove that these projects adequately reduce traffic congestion before we ask drivers to pay for these projects? We estimate that removing the Turnpike and Parkway widening projects from this program could reduce the toll hikes by about a third and give the state time to find more effective ways to manage congestion.

Further undermining the Turnpike expansion project is recent data from the New Jersey Turnpike Authority which shows that driving on the road has been much lower than the NJTA anticipated when it conceived the project. From April 2005 to April 2008, the number of vehicles using all seven New Jersey Turnpike entries in the project area (Exits 6, 6A, 7, 7A, 8, 8A, 9) stagnated. Between 2002 and 2007, average annual traffic growth was just .7%. The most recent annual data shows traffic on the roadway actually declined 1.1% between 2006 and 2007. This blows to pieces the NJTA’s whole foundation for expanding the roadway which, and I quote, is to “service existing and projected future traffic demand on the Turnpike mainline.” That foundation relies on pre-2002 data, when traffic growth rates were much higher, at 2.6% annually. Traffic growth rates are not what they were when this project was conceived.

I’m not sure we can avoid a toll hike, but the plan on the table is a bad one that could have longterm ramifications, making it more difficult to do what needs to be done on other local and state roads.

Toll hikes back on the table

One thing you can’t say about Gov. Jon Corzine is that keeping his office is more important than his vision for the future.

The governor is proposing to hike tolls on the N.J. Turnpike and Garden State Parkway by 50 percent in 2009 — the year he is expected to seek re-election. That’s a gutsy move, consider how unpopular his earlier toll-hike plan was.

The governor’s plan, which is expected to be unveiled by the N.J. Turnpike Authority next week, would use the added cash for transportation upgrades.

If enacted, it would mean the cost of a typical 23-mile trip on the Turnpike would jump from $1.20 to $1.80 next year. It would rise to $2.70 in 2012 and reach $3 after 2023.

Tolls on the Garden State Parkway would rise at a similar pace. The current average of 35 cents per passenger car would rise to 50 cents next year, 75 cents in 2012 and reach 85 cents in 2023. The hikes would be the first since 2000 and would be used to widen the Turnpike and Parkway, invest $1.25 billion in a new rail tunnel under the Hudson River and repair and replace decrepit bridges.

The proposal will be a difficult one to sell, but it has support from the Tri-State Transportation Campaign, a nonpartisan transportation and environmental group that advocates for mass transit and using money to maintain existing infrastructure, which believes that it should be scaled down and the highway widenings eliminated. It says that the “plan ultimately falls short by including $3.3 billion for wasteful expansions of these two roads.”

“This plan recognizes that Access to the Region’s Core is essential to New Jersey’s economic vitality and will help reduce traffic congestion throughout the state,” said Kate Slevin, Executive Director of the Tri-State Transportation Campaign, a regional policy watchdog organization. “But chaining it to wasteful, old-fashioned, and poorly planned road projects is the wrong move.”

The Turnpike Authority has not made the case that the Turnpike or the Parkway widening projects are needed. As currently designed, neither will provide long-term congestion relief. In fact, according to state data, parts of the new lane on the Parkway will be filled with traffic as soon as construction is complete. Alternatives like congestion pricing and cashless tolling have not been examined in the environmental documents, though they could provide long-term traffic relief at a fraction of the cost of highway expansion.

“Decades of road widening have shown that highway expansion doesn’t ease traffic congestion in the long run. New Jersey needs projects that look to the future, not the past,” said Slevin. Alternatively, the Campaign recommended a smaller toll increase to pay for necessary road maintenance and bridge repair and ensure that the ARC tunnel remains on track.

NJ Future also is backing the plan. A press release quoted NJ Future Executive Director Peter Kasabach, called “the Access to the Region’s Core (ARC) tunnel project and continued improvement and expansion of our mass transit system toward sustaining and enhancing our state’s economy, environment and quality of life.”

We welcome the Turnpike Authority’s proposal to use new funding proceeds for both the Trans-Hudson tunnel project and funding for mass transit.

Fiscally, the proposal makes more sense than the earlier plan to borrow against tolls to pay debt, but I think in the end it asks Turnpike drivers to foot the bill for improvements that probably should be paid for by a larger swath of people — through a gas tax increase, through development fees, etc.

But as practical as this plan may be, the politics may trump things in the end. The Legislature plans hearings on it — though it is not directly under the Legislature’s control — and the governor will have to run his re-election campaign with the toll hikes fresh in voters’ minds.

One thing is for certain, though, the state needs to fix its infrastructure sooner rather than later. We don’t need to have another Minneapolis bridge collapse and, while the business lobby might claim otherwise, the business community is more likely to flee a state with aging and nonfunctional infrastructure than it is a state that has to ask its businesses to pay a little more in taxes.

Pay me now, or pay me later

The thing that has struck me all along about the debate over the governor’s toll hike plan was the inevitability that the state’s needs — its broken infrastructure, shaky finances, etc. — would require some sacrifice on the part of taxpayers. Whether there would be a need to slash government programs, including popular or necessary ones, or raise taxes or other revenue, we were going to pay.

That’s why this announcement today by state Sen. Ray Lesniak should not come as a shock to anyone, though it will.

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