Questions about the Port Authority’s toll hike

June 30, 2014

The New York Times has chronicled the SEC’s investigation into whether New Jersey Governor Chris Christie forced the New York/New Jersey Port Authority to pay for $1.8 billion in improvements to the Pulaski skyway without properly disclosing it to bondholders. Allegedly, Christie’s rationale was that the Pulaski was an “access” road leading to a Port Authority tunnel. It appears that Christie’s Port Authority lieutenants were scheming to radically raise tolls to pay for it.

The New Jersey Record reported (emphasis mine):

Years before they resigned amid a scandal over politically motivated lane closures at the George Washington Bridge, Governor Christie’s top two executives at the Port Authority led a secretive campaign to quickly push through controversial toll hikes on the Hudson River bridges and tunnels by drowning out criticism, limiting public input and portraying the governors of New York and New Jersey as fiscal hawks who reined in an out-of-control agency.

At its heart was a plan to have the Port Authority, an independent bi-state agency, propose an enormous toll hike — a $6 increase that would bring the E-Z Pass toll to $14 by 2014 — so that the governors could then scale it back. The smaller increases that were ultimately approved in 2011 — $4.50 over four years — allowed both governors to claim credit while they set the stage for each state to claim hundreds of millions of dollars to fund pet projects not directly related to the Port Authority.

It was $1.8 billion that was siphoned away from the Port Authority to pay for New Jersey roads.

Christie needed Port Authority funds because he was unwilling to raise the state tax on gasoline, which would replenish the nearly depleted New Jersey Transportation Trust Fund Authority. New Jersey has the 48th lowest gas tax in the nation at 14.5 cents per gallon, according to the Tax Foundation. New York, the other state involved with the Port Authority, has the highest gas tax in the U.S. at 50.6 cents per gallon. Instead of funding New Jersey roads with gas taxes paid by state residents, Christie chose to take toll revenues and fees paid by drivers in the entire region.

The Port Authority, a joint venture between New York and New Jersey, oversees much of the regional transportation infrastructure in the metro area, including bridges, tunnels, airports, and seaports. The Port Authority has no power to tax and does not receive tax money from local or state governments. Instead, it operates on the revenues it makes from rents, tolls, fees, and facilities.

What would it cost New Jersey drivers if the state gas tax was raised? According to the Tri-State Transportation Campaign, a typical New Jersey driver of a car averaging 30 miles-per-gallon and driving 10,000 miles a year would pay about $16 more per year. New Jersey hasn’t raised its state gas tax since 1988.

To fund New Jersey roads, tolls for out-of-state drivers were increased and additional debt was taken on by the Port Authority. These stories highlight the slippery tactics of Governor Christie and his appointees. More importantly, they highlight how fiscally stressed New Jersey is. In addition to the state’s pension fund being deeply underfunded, the Transportation Fund is nearly empty. Christie’s “fiscal conservative” image masks the reality of him poaching funds from drivers even outside his state.

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