Under a sweeping budget proposal put forward by Gov. Jon Corzine (D-NJ), the price of driving on four of New Jersey’s toll roads will increase dramatically. Fares would increase by 50 percent every four years–in 2010, 2014, 2018, and 2022–and would include inflation adjustments. After 2022, the fares would be indexed for inflation every four years through 2085.
Corzine should be applauded for two aspects of his plan: All state spending would freeze beginning with the next budget cycle, and voter approval would be required for all projects that are proposed with no dedicated revenue source to fund them. Such fiscal restraint has been sorely lacking in Trenton and is needed to bring spending under control.
Corzine’s plan would create a new “public benefit company” that would issue $38 billion in bonds, to be repaid from the tolls. Of that amount, $16 billion would be used to retire half the state’s current $32 billion debt; the remaining bond sale proceeds would fund highway, bridge, and mass transit projects for 75 years.
Toll road fare increases will dramatically increase costs for the state’s trucking industry, and shippers will have no choice but to pass those costs along to their clients, who in turn will pass the costs to consumers. So in addition to paying more in tolls, New Jersey residents will pay more for a variety of everyday items, from clothes to groceries.
Lawmakers should consider more sensible solutions to the state’s fiscal ills. Some states, for example, have successfully leased toll roads to private companies. Long-term leases of the Indiana Toll Road and Chicago Skyway have provided an infusion of cash for state coffers, improved infrastructure, and resulted in dramatically shorter delays at toll booths. Most importantly, motorists are happy.
The following articles provide background on the problems that plague America’s highways and offer common-sense solutions.
Edwards: What About the Rest of Corzine’s Plan
http://www.northjersey.com/opinion/moreviews/What_about_the_rest_of_Corzines_debt_reduction_plan.html
Gregg Edwards, president of the Center for Policy Research of New Jersey, says Corzine’s plan leaves many unanswered questions.
Leasing State Toll Roads
http://www.heartland.org/pdf/pb60_leasing_state_toll_roads.pdf
Peter Samuel, senior fellow in transportation studies at Reason Foundation, dispels common myths about the leasing of toll roads.
A New Approach to Private Roads
http://www.cato.org/pubs/regulation/regv25n3/v25n3-6.pdf
Yale University economics professor Eduardo Engle and coauthors offer solutions to avoid past problems with leasing highways.
Highway Aggravation: The Case for Privatizing the Highways
http://www.cato.org/pub_display.php?pub_id=1093
Peter Samuel lays out the case for breaking government’s monopoly on transportation.
California Law Provides Lessons for Private Transportation
http://www.heartland.org/Article.cfm?artId=16339
Two University of California professors see a growing trend of road privatization in the United States.
Toll-Highway Finance Lessons from Orange County
http://www.ucop.edu/cprc/documents/tollroadbrf.pdf
The California Policy Research Center describes the experience of Orange County, where 61 new miles of toll highways were opened during the 1990s.
If you have any questions about this issue, you may contact Nick Baker, The Heartland Institute’s legislative specialist for budget and tax policy, at 312/377-4000 or [email protected].
For more information about The Heartland Institute, contact Harriette Johnson, Heartland’s media relations manager at 312/377-4000 or email at [email protected] .
