NJ Senator pitches $15B toll road lease

NJ Senator pitches $15B toll road lease

	Published : Thu, 01 Feb 2007 00:22 By : Agencies Print this Story

TRENTON, N.J. (AFX) - New Jersey could get up to $15 billion by leasing toll roads to a private company that would increase tolls annually but give the state money to pay debt and free cash for school construction, property tax relief and other needs, a state lawmaker said Wednesday.

Sen. Raymond Lesniak said he will introduce legislation Monday that would authorize the state to lease the New Jersey Turnpike, Garden State Parkway and the PNC Bank Arts Center, which is operated by the Turnpike Authority.

'New Jersey is at a crossroad,' said Lesniak, D-Union. 'We cannot raise taxes or increase our debt, but we have obligations to invest in our future that we must make or we will go backwards as a state.'

State Treasurer Bradley Abelow welcomed Lesniak's ideas, but said he didn't know how much the state could earn from such a deal and emphasized he wouldn't discuss it even if he did know.

Senate President Richard J. Codey said Lesniak's plan was worth discussing.

'We shouldn't reject out of hand any ideas that could lead to a $15 billion reduction in our debt obligations,' said Codey, D-Essex.

But Assembly Majority Leader Bonnie Watson Coleman, D-Mercer, deemed the plan 'a certain nonstarter unless it contains stronger protections against prospective runaway toll increases.'

Abelow said he hoped the administration would decide in the next month or two whether to recommend to Gov. Jon S. Corzine that the state proceed with leasing state assets, but stressed that there would be no rush.

'This is way too important and way too sensitive and difficult a set of questions,' Abelow said at a Rutgers University symposium on toll road leases.

Corzine hasn't endorsed leasing toll roads, but has said the state will need to find a way to make cash from state properties if it's to solve chronic financial problems.

'We are still in the analysis phase,' Transportation Commissioner Kris Kolluri said.

Lesniak said the state has little choice, noting state government faces $50 billion in debt and unfunded government worker pension and health benefit costs. Without a new means to raise money, the state will have no way to pay for obligations such as school construction, open space preservation and highway and bridge improvements, he said.

His plan proposes:

-- Allowing annual toll increases tied to the consumer price index for cars and the gross domestic product for commercial vehicles.

-- Requiring state police patrols and unfettered access for state homeland security officials.

-- Requiring a state-chosen engineer certify maintenance for leased toll roads.

-- Requiring a private vendor retain all toll road employees for two collective bargaining agreements or six years, whichever is longer.

'I am confident that conditions that have to be met will protect the motoring public and, most importantly, the people of New Jersey,' Lesniak said.

He said the state shouldn't do a deal unless it can get $10 billion, and said his $15 billion estimate was a 'good guess' at how much the state can expect to get.

Abelow said leasing the New Jersey lottery and selling development rights to state properties are among other possibilities.

Assemblyman John Wisniewski, D-Middlesex, chairman of the Assembly Transportation Committee, is skeptical of leasing toll roads.

'No matter how you dress it up, a sale or lease of the Turnpike and Parkway remains a dead-end for New Jersey drivers,' he said.

Sen. Robert Littell, R-Sussex, said leasing state property worth more than $100 million should require voter approval.

'I, for one, think that selling or leasing the Turnpike to a foreign entity is one of the wackiest ideas the Trenton Democrats have yet come up with, and I am quite sure that a majority of voters will agree with me,' Littell said.

A Fairleigh Dickinson University PublicMind poll of New Jersey voters taken earlier this month found 54 percent think leasing the Turnpike is a 'bad idea,' compared to just 17 percent who support it.

But New Jersey officials have been eyeing the Indiana deal and one in Chicago, which will get $1.83 billion for a 99-year lease of the Chicago Skyway.

In Indiana, the consortium can begin increasing tolls annually beginning in 2010 by either 2 percent, the rate of inflation or the increase in gross domestic product. Most of the lease money is slated to be used to finance highway and other transportation projects.

The Chicago deal allows the company to double car tolls to $4 over the next decade and continue to raise them after that. Most money from the deal will be used to pay highway and other city debt and create a long-term reserve fund.