New Jersey officials continue to spar over whether revenue from potential toll increases can be used to help finance a new passenger rail tunnel that will run between Newark and Manhattan.
Republican lawmakers believe the enabling statute of the New Jersey Turnpike Authority limits toll revenue to be used only for highway projects, yet state Transportation Commissioner Kris Kolluri said the authority's statute does allow for the funding of tunnels.
"The Turnpike consolidation statute specifically authorizes the [authority] to invest in bridges, roadways, interchanges, and tunnels," Kolluri said. "So the statute can't be any more explicit than that."
Yet Sen. Leonard Lance, R-Warren and Hunterdon, points to a section of the statute which reads, "No toll revenue derived from the [Turnpike] or the Garden State Parkway shall be used or available for any transportation project other than a highway project and all transportation projects other than highway projects shall be self-sustaining," according to a Lance press release.
Kolluri said the rail tunnel, called the Access to the Region's Core, or ARC tunnel, will take 20,000 cars off the Turnpike once the tunnel opens in 2017. That would ease congestion, specifically in the Newark area on the western spur, north of Exit 14. Kolluri pegs any proposed road-widening project on those lanes to cost roughly $2.7 billion.
"So as a business sense and as a matter of law, the authority has the ability and the right to invest in this mass-transit tunnel because it will preserve capacity on the western spur and it will make sure that we continue to mitigate emission problems north of Exit 14."
New Jersey has committed to a $1.25 billion contribution towards the $7.6 billion ARC tunnel. Yet how the state will come up with the $1.25 billion remains to be seen.
While Republican lawmakers support the ARC tunnel, they oppose using toll revenues to help finance the large-scale project. Instead, Senate Minority Leader Tom Kean, R-Essex, and other GOP lawmakers point to a financing plan they proposed in late May.
That strategy involves redirecting $500 million of existing motor vehicle revenues each year from the state's operating budget to the New Jersey Transportation Trust Fund Authority. The TTFA could then leverage those dedicated revenues to support the $1.25 billion, but also help finance needed road and bridge projects throughout the state.
"I support the [ARC] tunnel and I think it's a vital economic development and transportation project ... but we should not be funding it illegally, if that is indeed the case," Kean said.
Kolluri said the proposed toll increases would help finance more than $11 billion of transportation infrastructure needs after officials first bolster the Turnpike's low debt service coverage, which now stands at 1.2 times coverage. The authority's bond agreements stipulate that debt service coverage cannot fall below 1.2 times and the Turnpike's goal is to achieve 1.4 times coverage.
Kolluri stressed that addressing the Turnpike's debt responsibilities will take precedence over capital projects, with the $1.25 billion ARC payment at the bottom of the Turnpike's list of financing responsibilities.
Moody's Investors Service analyst Maria Matesanz said New Jersey's potential toll hikes are reflective of other jurisdictions and transportation infrastructure needs throughout the U.S.
"There are a lot of toll agencies that are implementing toll increases now and it speaks to the fact that resources for funding transportation infrastructure are limited," Matesanz said. "Tax revenues, especially in a stressed economy, are less likely to be tapped to fund necessary projects, and so governments are turning to tolls and toll agencies to do more of the transportation funding."
NJTA's toll proposal includes increasing tolls on the Turnpike by 60 cents in 2009, 90 cents in 2012, and another 30 cents in 2023. The average cost for passenger cars on the Parkway would increase by 15 cents next year, 25 cents in 2012, and eight cents in 2023. Proposed toll increases on the Atlantic City Expressway include a 15-cent hike on Expressway ramps, a 25-cent toll increase just west of Atlantic City, and a $1 increase just north of the city.
