PACKET EDITORIAL, July 10
With all 120 seats in the New Jersey Legislature at stake in the November election, it’s easy to understand why Gov. Jon Corzine has decided to put off for several months the much-anticipated announcement of his "asset monetization" plan.
It’s not that the governor is any less committed to the idea of turning one or more of the state’s valuable assets the New Jersey Turnpike, Garden State Parkway, Atlantic City Expressway or perhaps some lesser roadways, bridges, tunnels and assorted pieces of infrastructure into cold, hard cash. It’s just that he saw little point in trying to do so at a time when most legislators will be eager to distance themselves as far as they can from anything remotely controversial.
And make no mistake about it. This scheme, whatever form it ultimately takes, will be controversial.
Already, Republicans in Trenton are lining up solidly against it, despite their party’s longstanding devotion to the premise that the private sector can run things more efficiently and cheaply than government does. And Democrats are at best lukewarm to the idea of ceding oversight of traditionally public functions to any private entity that isn’t directly accountable to voters and taxpayers.
So Mr. Corzine was simply acknowledging political reality when he decided to move asset monetization to the back burner. But even as he turned down the heat on lawmakers, the governor stirred the pot with some spicy comments about the knee-jerk opposition that has greeted his yet-to-be-unveiled plan properly terming a GOP campaign flier featuring a "For Sale" sign above a toll road "political demagoguery."
The governor also took the occasion to lay out some guiding principles for what asset monetization would and would not mean. He said it would not, under any circumstances, mean selling the Turnpike (or any other state asset) to a private entity, nor would it allow any public asset to be leased to a for-profit or foreign operator.
He said any roadway that might be monetized would be maintained at its current level of service or improved; toll schedules would be open and predictable; the wages and benefits of current roadway employees would be protected; and at least one public meeting would be held in all 21 counties before the plan would take effect.
It remains to be seen whether the governor can live up to all these promises and raise a sufficient sum of money in the process to make the whole effort worthwhile. By Mr. Corzine’s own calculations, the state needs an infusion of several billion dollars to avoid either significant tax increases or draconian service cuts. (The interest alone on the state debt now exceeds $3 billion a year.)
But that is the very reason the Corzine administration is even considering asset monetization. Previous administrations, together with compliant legislatures, have so mortgaged the state’s future and so neglected its capital needs that only a bold, decisive revenue-raising measure can put New Jersey back on anything resembling sound financial footing.
The devil, of course, will be in the details. While others, especially all those wary legislators seeking re-election, may choose to denounce the governor’s scheme even before those details emerge, we’d prefer to give him the benefit of the doubt. Asset monetization may be just the breath of fiscal life New Jersey needs. Or, if it turns out to be a lot of hot air, there will be plenty of time, and ample opportunity, to give it a proper burial.