A week of noise involving unions and commuters ended quietly in a Manhattan conference room on Friday, when the Port Authority of New York and New Jersey board of commissioners approved a set of toll and fare increases that the states’ governors modified.
Supporters say the move was necessary to support infrastructure projects and the authority’s access to capital markets.
The nine commissioners among the 12-member panel who attended the meeting — each governor appoints six — unanimously approved increases scaled down by Andrew Cuomo of New York and Chris Christie of New Jersey, then brushed past a large media contingent without saying anything.
Under the new plan that the two governors signed off on the night before, tolls on cars using E-ZPass will go up $1.50 on Sept. 18 and then 75 cents each December from 2012 to 2015, down from the proposed increases of $4 the first year and $6 over four years. Cars without E-ZPass must pay a $2 surcharge.
Fares on Port Authority Trans-Hudson, or PATH, trains will increase 25 cents annually over the next four years, as opposed to an immediate $1 increase.
The 90-year-old Port Authority will pare its 10-year capital plan by $5 billion, to $25.1 billion.
The plan includes $6 billion for reconstruction of the World Trade Center, which the authority oversees; $1.5 billion for a new Goethals Bridge; $1 billion for raising the Bayonne Bridge roadway to accommodate bigger ships; $700 million for fixing the George Washington Bridge cables; and $100 million for reworking the Lincoln Tunnel helix.
Authority officials and commissioners cited the need to preserve the agency’s bond rating, and concern over the January outlook change by Moody’s Investors Service to negative.
The increases, said chief financial officer Michael Fabiano, “will let us access the capital markets, which will allow us to maintain our bond rating and meet our statutory bond commitments.”
Moody’s affirmed the negative outlook for the authority in March. Fitch Ratings and Standard & Poor’s each assign a AA-minus with a stable outlook to the credit.
Fabiano cited three straight years of 0% growth in operating expenses, $5 billion in cut projects, and billions more deferred; a $2.6 billion revenue decline from original capital plan projections due to the recession; more than $11 billion necessary to rebuild the World Trade Center, which the authority oversees; and $6 billion in post 9-11 security costs.
Cuomo and Christie said the increased revenue “will prevent a default by the authority as well as a downgrading that would prevent the authority from borrowing money to pay for existing and future projects.” The governors, though, insisted on a “stringent audit” of Port Authority practices.
Earlier in the week, New York State Comptroller Thomas DiNapoli criticized the authority for failing to curb overtime costs. An audit by his office said the agency paid $85.7 million of overtime during 2010, and welched on a commitment to reduce overtime costs by 20%.
Friday’s vote followed a series of public hearings in New York City’s five boroughs and New Jersey in which unions pushed for the increases in the name of jobs and growth, while commuters said they were already financially strapped. Frequent shouting matches erupted between the two groups.
Mitchell Moss, director of the Rudin Center for Transportation Policy and Management at New York University’s Wagner Graduate School of Public Service, acknowledged the difficulty of raising fares and tolls in a bad economy.
“In a weak economy you have antipathy toward any new taxes or toll increases,” he said.
Moss, though, said the timing is right for the authority to invest in infrastructure, with interest rates low and contracting companies looking for work.
“We have not educated people enough about the role of tolls as a revenue stream,” he said. “There’s been so much attention to ground zero that we’ve forgotten how important the Port Authority is. Its role in regional transportation is overlooked.”
The commissioners, meanwhile, were most eager to leave after Friday’s vote, especially after some in the media questioned whether the whole process — announcing massive increases and the governors modifying them — was orchestrated.
“I don’t talk to the newspapers. I don’t talk to TV, either,” bristled board member David Steiner, chairman of the real estate investment firm Steiner Equities Group LLC of Roseland, N.J. “I talk to the public, but not under these circumstances.”