Leasing the New Jersey Turnpike, Garden State Parkway, and Atlantic Expressway to private companies may bring a payment equal to the state’s debt of $30 billion, but the political repercussions for Governor John Corzine could be severe.
"Following recent leases of toll roads in Chicago and in Indiana, New Jersey is among two dozen states that have either formed partnerships with private groups or passed legislation paving the way for such agreements."
"Polls show that voters in New Jersey oppose the idea, and powerful lobbying groups, from commuters and trucking companies to environmentalists and public employee unions, are also skeptical."
"But the biggest complaint is that to recoup their huge up-front payments and generate returns of 10 percent to 15 percent a year, private operators are winning the right to raise tolls faster than public agencies would have. In the case of the Garden State Parkway, for instance, where tolls have been unchanged for 17 years, a sharp increase would be inevitable."
"The state's debt load, about $30 billion, is roughly equal to its annual operating budget. And five months before the fiscal year ends on June 30, the state is already staring at about a $2 billion deficit."
"With numbers this large, Mr. Corzine is expected to try to get the most he can, by seeking to lease the three toll roads as part of one package, which according to Philip Villaluz, an analyst at Merrill Lynch, could bring the state about $30 billion."
"'New Jersey has its back to the wall in an acute way and Corzine doesn't have a lot of options,' said John Foote, a senior fellow at the Kennedy School of Government at Harvard University, who studies making highways private. 'He knows this will not be a politically popular decision.'"
Read the full story: Option to Rent: Great New Jersey Views, Many Lanes, Tollbooths Included
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