New Jersey Governor Jon Corzine announced yesterday a plan to raise money in New Jersey to issue bonds in a public benefits corporation that will manage the toll roads. The bonds will be paid back through a series of toll increases. Starting in 2010 and every four years until 2022, toll prices on the New Jersey Turnpike, Garden State Parkway, and Atlantic City Expressway will increase by a factor of 50% plus inflation. Route 440 will also become a toll highway for a stretch.
Right now, I pay a total of $0.90 in toll charge for my daily commute. I can’t find any data on historic toll rates, but it’s my understanding that toll increases have lagged far behind the governmentally-reported inflation numbers (for what they are worth). A 50% increase in 2010, assuming I work and live in the same locations, would bring my daily fee to $1.35 or about an additional $115 per year in today’s dollars over this year’s toll expenditure. All things considered, that’s not too steep of an increase in dollars.
In 2014, the toll rate for the same round-trip commute will be about $2.00 or about a $275 increase in today’s dollars. Now it’s starting to sound a bit hairy. In 2018, the price would increase to $3.00 in today’s dollars and in 2022, a daily commute between the two interchanges I now use will be $4.50 in today’s dollars.
Today, if you pay cash rather than use E-Zpass and commute from the southernmost exit to the northernmost (and back), you would be spending a total of $12.90 each day. In 2022, a round trip tour of the full span of the New Jersey Turnpike will cost $65 in today’s dollars. But by then, you may be able to buy only one gallon of gasoline for $65.
The state intends to raise money quickly through the bonds issued in this new corporation, but that’s not the only piece. Corzine mentioned in his State of the State address a four-point plan for fixing the state’s budget:
- Freeze spending by the government.
- Limit future spending to only what can be provided by revenue.
- Monetize the toll highways.
- Require voter authorization before borrowing more money.
This plan was devised as an alternative to raising state income tax, sales tax, or gasoline tax. Will it work? Most people I’ve talked to so far don’t think this plan is too sound. The future toll hikes inequitably burden commuters and shore-vacationers, which includes out-of-state visitors. Some other options for balancing the budget while avoiding unpopular taxation are for the government to cut spending and/or consolidate school districts. (It has actually been shown that district consolidation in practice increases expenses despite theories about economy of scale. I would support whichever option improves the quality of education for the most amount of students.)
Corzine challenged critics to present their own plan. Now it’s your chance to be Governor of New Jersey—everyone’s dream job. What would you do? Some details would be helpful; “cut spending” is not a complete suggestion.
Corzine unveils plan for state finances [The Star-Ledger]
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11:57 am (reply)
That reminds me, if you get the chance to buy stamps that says “first class” without a nominative value, buy immediately. That way USPS pays for government inflation which I think is fair.
1:19 pm (reply)
The increase in stamp prices will not beat inflation (according to the latest law), so you may be better off just buying stamps as you need them—you’ll be spending slightly less “real” money each time there’s a price increase. Buying stamps to hold now will save you time standing in line, though.
9:58 pm (reply)
I would have started with raising gasoline taxes. Ours are the lowest in the country, and I would prefer that to this plan.
However, this plan is FAR, FAR better than the crack-smoking idiocy they were talking about with selling the toll roads to private companies. So, I’m happy they didn’t go for that stupid plan.
10:05 pm (reply)
This is simply reason #153 why I am getting the hell out of New Jersey within the next two years. I would do it now except we have a baby on the way, but as soon as she’s about 1 we’re packing up and moving back to NYC or Pennsylvania or Connecticut or even Virginia or North Carolina. I’ve had it with this state and its taxes and its failing schools and potholed overcrowded toll roads and crime and dual-position politicians. I am tired of the whole package. Enough, already. Fix it and I’ll move back in 2053, but life is too short to hang out here. NJ is a train wreck.
How to fix it? Forbid holding multiple political positions. Consolidate all municipalities less than 20,000 people with the nearest municipalities. Privatize all toll roads immediately. Raise gas taxes 100% to pay for public transportation improvements, not road improvements. Put tolls on all cars exiting the Holland, Lincoln, GWB. Lower property taxes. Fire 25% of all state workers across the board. Eliminate all state pensions, health benefits and so on and replace them with 401ks and crappy PPOs like private workers have to deal with.
New Jersey is the future of America, and the future is a widening income gap with high taxes, bad public services and corrupt politicians.
Whew! Glad I got that off my chest.
8:42 pm (reply)
We have to follow our constitution, which states that no debts can be entered that exceeds 1 % of the state budget. This same document states that no debts can exceed 30 years, which this deal does. We need to repudiate NJ’s
Unconstitutional Debt. Only 16 to 24 billion dollars of the states 117 billion dolars of debt is legal. Let the voters of this state vote on this debt that our so called elected leaders gave us over the last 30 years. If the folks of this great state say no, then don’t pay for all of these schemes, bs authorities, etc. and then live within our means. If that means firing staff, then do so, just like with any other business!
6:31 pm (reply)
According to the toll calculator on the turnpike website:
Exit 7A to 13 (Great Adventure to Elizabeth/Staten Island) the toll is $2.15 one way – Round trip $4.30
In 2010 raise to 6.45 RT/wkly 32.25 annual 1677.00
In 2014 $9.68 RT /wkly $48.38
annual 2515.50
In 2018 $14.52 RT / wkly $108.90
annual $5662.80
In 2022 $21.78 RT / wkly $163.35
annual $8494.20
Earnings of $14.00 per hour 40 hour week $560.00 /$560.00×52 weeks = 29120.00 / 2022 toll would be more than 25% of gross income. Who would be dumb enough to spend that kind of money on tolls?
the Governor’s figures are based only on a 1-way trip with a .90 toll
Figgy
8:27 pm (reply)
Want to know who’s really behind this? Goldman Sachs.
Here are a few good articles to read;
#1 is about Mark Florian he works for a company called Goldman Sachs seems he’s traveling around the country talking Governor’s into selling their assets, sound familar?
#2 is about you guessed it Goldman Sachs again, seems they help liquidate this company, you have to read it to believe it.
#3 is about the first genius Governor to come up with this plan and he touted it as a 10 year plan to help build roads and bridges and not even 1 year later they announced they don’t have enough money to do it.
#4 is about Goldman Sachs and conflicts of interest.
1-Click on the link below to read about Mark Florian from Goldman Sachs advising Governors to sell their roads for a fire sale price!
http://www.motherjones.com/news/feature/2007/01/highwaymen.html
And here’s a good one to read!
Montana Power Company deal brokered by Goldman/Sachs
http://www.cbsnews.com/stories/2003/02/06/60minutes/main539719.shtml
Indiana doesn’t have enough money for their 10 year plan, didn’t quite make 1 year.
http://www.wthrcom/Global/story.asp?s=6280907
This is the best one;
http://salon.glenrose.net/default.asp?view=plink&id=5638