Raising Turnpike Tolls Will Be Key To Reducing NJ State Deficit

Governor Corzine addressed the NJ State League of Municipalities conference on Nov. 15 to discuss issues confronting the Garden State, including his plans to reduce the debt, and whether he would "monetize" the turnpikes, as was done in Indiana. The test may be how well he can sell it to a tough crowd.

"Mr. Corzine devoted most of his energy to discussing his plans for the New Jersey Turnpike and the state’s two other toll roads, the Garden State Parkway and the Atlantic City Expressway, noting that toll increases on them would be “substantial.”

But he reiterated that the state would not sell those toll roads. Rather, one option might be to raise tolls and divert the increased revenue to a newly formed public corporation, which would then issue bonds backed by that money. The amount of the bonds would be based on the size of the toll increases.

Assuming that the public corporation can issue tax-free bonds — something that Mr. Corzine has said that the Internal Revenue Service must approve — the state could theoretically raise about 50 percent more than it would by turning the toll roads over to private investors. The governor could use the money to retire debt and bolster the depleted Transportation Trust Fund — without raising the gasoline tax."

From "Road plan may need diet plan":

"The bigger sticking point will be selling this program to a skeptical citizenry. We've now been conditioned to expect toll increases with "asset monetization." How much? Corzine wouldn't say. Meanwhile, bi-state authorities at both ends of New Jersey are talking bridge-toll increases, something that will make drivers even more fearful of any hikes on the New Jersey Turnpike, the Garden State Parkway and the Atlantic City Expressway.

In a best-case scenario, asset monetization could pay down a lot of New Jersey's long term debt, and pay for upkeep of roads and bridges without damaging drivers' pocketbooks too much. Even if that were true, Corzine must convince lawmakers and all of us why it's necessary to accomplish this feat by taking the roads from state authorities and placing them into what sounds a little like an off-the-books, offshore corporation."