States weigh options on their toll roads

Posted: June 26, 2007

Public skepticism about selling or leasing toll roads is forcing states such as Pennsylvania and New Jersey to consider other ways of wringing money from their turnpikes.

In New Jersey, Gov. Corzine is preparing a proposal for a "public benefit corporation" to tap the value of toll roads without turning them over to private companies. In Pennsylvania, legislators are resisting Gov. Rendell's call for a turnpike lease by offering plans for the state to extract money from the turnpike itself.

In Texas, a national leader in private toll roads, Gov. Rick Perry, this month signed a bill to limit private toll roads after vetoing a tougher moratorium approved earlier by the legislature.

"There's not a confidence level yet in this country that toll roads can be operated in a safe and secure and efficient manner by private companies," said Sen. Raymond Lesniak (D., Union), the sponsor of a bill to lease New Jersey's toll roads and allow the New Jersey Turnpike Authority to match any private bidder's offer.

Legislators - and their constituents - are asking a fundamental question: If toll roads are so valuable, why don't states act like companies and make all that money themselves?

So discussions about "privatization" have become talks about "monetization."

Corzine wants to create a public agency that could borrow money more cheaply than a private company and use that money to help pay off the state's considerable debt. The money would be repaid by increasing tolls on the New Jersey Turnpike and Garden State Parkway.

In Pennsylvania, Rendell has continued to call for a private lease, arguing that it could produce more money. The Pennsylvania Turnpike Commission and several influential state legislators are pushing proposals to raise money by having the Turnpike Commission borrow against future toll increases and new tolls on other highways.

New Jersey Transportation Commissioner Kris Kolluri said last week that the Corzine administration would come up with its monetization proposal "in the next several weeks," although there have been reports that Corzine won't release his plan until after the November election.

Kolluri acknowledged that it had taken longer than expected to unveil a plan: "Every two weeks, we say it will be two more weeks."

"It's easier said than done," Kolluri told a Penjerdel Council transportation summit meeting in Gladwyne. He said Corzine had told his financial and transportation officials to create a plan for an entity that would "run like a business, but for the public benefit." He said a plan would have to provide "reasonable and predictable" fares, maintenance and repair standards, and the assurance that the state would "control the asset."

Under the current toll-road operation, Kolluri said, the value of the roads is locked up. He said New Jersey's challenge was to "unlock the value without giving up state control and state revenue."

"We need money, and lots of it," Kolluri said. "Are we asking for a blank check? No."

Stephanie Mensch, spokeswoman for AAA South Jersey, said yesterday the auto club was concerned that Corzine would withhold his plan until after the November elections and then rush it through a lame-duck legislature.

"What we've been calling for is for the governor to put his plan out early and have a thorough public conversation," Mensch said.

Lesniak said he did not think the New Jersey legislature would act this year.

"If it's just increasing the tolls, that's going to be a hard sell," Lesniak said. "I think [a public corporation] has to show efficiencies and other improvements."

AAA polls in New Jersey and Pennsylvania this spring showed most motorists opposed a private lease of toll roads. A Quinnipiac University poll of Pennsylvania voters in March showed a plurality (49 percent to 41 percent) supported a proposal to lease the Pennsylvania Turnpike, if the state maintained control over tolls and maintenance.

"I don't think people really understand it at this point," Mensch said. "That's why it's important to have a discussion early."

The New Jersey AAA poll showed 56 percent of voters opposed to leasing toll roads to retire state debt, with 38 percent in favor, and 24 percent undecided. A AAA Mid-Atlantic poll asked Philadelphia-area drivers whether they favored selling public roads to private companies as a way to raise transportation funds (70 percent opposed), and the AAA Pennsylvania Federation poll asked Pennsylvania AAA members to rate support for leasing existing interstate highways to private companies and using the revenue on existing highways and bridges (54 percent opposed, 24 percent supported).

The difference in the results of the polls by Quinnipiac and AAA may lie in how the surveys posed their questions and whom they polled, polling officials said. The AAA polls surveyed licensed drivers, while Quinnipiac surveyed registered voters. Quinnipiac specified a turnpike lease proposal in which the state would keep control over toll increases and maintenance schedules and use the money for highway and bridge construction, as Rendell has called for.


Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.

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