PACKET EDITORIAL, Dec. 26
Just how much of a tradeoff are New Jersey residents willing to make in order to obtain real property-tax relief?
Enough to sell or lease the New Jersey Turnpike?
That seems to be the Faustian bargain being contemplated by Gov. Corzine and legislative leaders as they calculate the cost of providing meaningful and sustainable relief from our state’s highest-in-the-nation property taxes.
Evidently, nothing short of $2 billion a year is needed to achieve this goal. That means a total of $14 billion, if it’s to be sustained over the lifetime of Mr. Corzine’s tenure as governor. And, evidently, few things short of selling or leasing America’s most famous and heavily traveled toll road will bring in sufficient revenue to accomplish this.
So New Jersey is seriously considering taking the same route taken by the states of Indiana and California, as well as the city of Chicago trading in a publicly built and operated toll road for some cold, hard cash. And there is no dearth of potential lessors or buyers; consortiums of Australian, Spanish, French and sundry other investors are lining up to bid for the right to run the 173-mile roadway that carries, on average, more than 500,000 toll-paying vehicles per day.
Private toll roads have apparently become very popular and lucrative in Western Europe and Australia lately, and the trend is starting to pick up on this continent, as well. In Canada, the 407 Express Toll Road in Ontario is a private operation. In Orange County, Calif., the express lanes on state Route 91 are operated by a private company. The Indiana Toll Road drew a bid of $3.75 billion from a joint venture of toll road companies from Spain and Australia for a 75-year concession. And a global consortium paid $1.8 billion to lease, toll, operate and maintain the Chicago Skyway for 99 years.
The New Jersey Turnpike dwarfs all of these highways in terms of length, width, capacity, volume and market value. Though some observers might think of it, especially along the stretch that runs from the Bayway refinery through the container farms of Carteret, as a distinct liability to the Garden State’s reputation, the turnpike is, in fact, a huge financial asset. The roadway itself has considerable value, as do the rest areas, toll booths, maintenance equipment and other tangible holdings not to mention the daily revenue stream, which adds an enormous enhancement to potential lessors or buyers.
Interestingly, this would not be the first time New Jersey has sold or leased a highway. In 1991, Gov. Jim Florio balanced the state budget by selling a 4.4-mile stretch of Interstate 95 in Bergen County for $400 million. Ironically, the buyer in that case was the New Jersey Turnpike Authority.
But that was a one-time budget gimmick. What Gov. Corzine is considering has much longer-term implications. What impact would the lease or sale of the turnpike have on the state’s credit rating? What happens if the state wants to improve nearby roadways, only to have the private toll road operator claim it’s siphoning traffic and revenue away from the turnpike? If the turnpike is in private hands, what kind of say, if any, would the public and its elected officials have about future toll increases? And, even if the answers to all these questions are not to everyone’s liking if, for example, turnpike tolls would skyrocket in private hands are these tradeoffs nevertheless a fair and reasonable price to pay for long-awaited and much-needed property-tax relief?
This is plainly a matter that deserves long, hard thought and robust public discussion. We’re looking forward to plenty of both in the new year.