The New Jersey Turnpike Authority could roll back toll increases to reflect $1.25 billion it no longer needs to spend on a canceled mass transit tunnel project and still meet contractual debt-service coverage levels, according to an analysis from the Office of Legislative Services.

Tolls on the New Jersey Turnpike and the Garden State Parkway are set to go up by 53% and 50%, respectively, on Jan. 1, 2012. Tolls last went up in December 2008 by 40% on the Turnpike and 43% on the Parkway.

Officials approved those increases to help finance a $2.5 billion road-widening project and also to support a new mass transit tunnel that would have doubled commuter-rail capacity between New Jersey and Manhattan. Republican Gov. Chris Christie last year terminated that tunnel project, called the Access to the Region’s Core, or ARC tunnel, saying the state could not afford the potential cost overruns.

The authority was set to allocate $195 million annually from 2012 through 2017 and $80 million in 2018 for the ARC tunnel project. Now that the authority no longer has to make those ARC tunnel payments, the Democratic-controlled Legislature is looking to reduce the agency’s tolls to reflect the $1.25 billion it no longer needs to allocate.

The nonpartisan OLS calculated the Turnpike Authority’s net-revenue-to-net-debt-service ratio if the agency were to collect fewer toll revenues equal to the ARC tunnel payments. Under those circumstances, the agency would still have debt-service coverage levels that range from 1.44 times in 2012 to 1.39 times in 2018, with the lowest ratio, 1.26 times in 2017, according to the OLS memorandum. Debt-service levels must be at least 1.2 times.

Senate President Stephen Sweeney, sponsor of a bill to roll back tolls on the Turnpike and the Parkway, said Wednesday that the OLS findings support his claim that the agency can absorb a reduction in tolls. Christie is seeking to use the toll revenue to help finance non-tolled roadway and transportation infrastructure needs.

“There is now simply no doubt the toll hikes can be stopped and that Gov. Christie must take his case for raising tolls directly to the people, instead of trying to circumvent them,” Sweeney said in a statement.

In response, the administration points out that the Turnpike agency has the authority to use the toll revenues for other purposes if the revenues are no longer required for the ARC tunnel.

“The supreme irony is that these are Corzine-era toll hikes, blessed by this Democratically controlled Legislature,” Christie spokesman Michael Drewniak said via e-mail. “Yet they persist with this partisan ploy to distract the public while offering no constructive alternative and no fiscally responsible way to raise $125 million annually, short of an enormous new gasoline tax hike.”

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