Put the Brakes on Plan to Sell Toll Roads

By Assemblyman Sean T. Kean
 

With New Jersey once again facing a budget deficit, legislative leaders are looking for another quick fix instead of attempting to address the root causes of this financial crisis. Unfortunately, the latest gimmick--the selling off of our toll roads--will have serious repercussions that could impact on the state’s quality of life, economy and financial well-being for generations to come.

While the Governor expects to make a decision in the next few months, the Legislature should act quickly to put a stop to this scheme to sell some of New Jersey’s toll roads to private companies in order to plug a budget shortfall.

This proposal reminds me of the ill-conceived plan undertaken in the 1990s to privatize the Garden State Arts Center. Many would agree with me that the experience of attending a show at the Arts Center is not what it once was. I believe that government should stay out of certain activities; however, whether it is the performing arts or heavily traveled highways, in some cases the benefits of public oversight clearly outweigh the negatives.

While selling or leasing the toll roads would provide a quick infusion of cash for the state, this approach fails to address the real problem that has led to our state’s financial crisis: the inability to rein in state spending. The fact is New Jersey does not have a revenue problem: it has a spending problem. In fact, in the past five years, state spending has increased by more than $10 billion while state debt has doubled to more than $37 billion dollars.

Instead of addressing the spending problem, legislative leaders in Trenton are constantly looking for new revenue sources. More often than not these new sources of revenue come in the form of higher taxes and fees. For instance, in order to pay for the recent state budget which grew by more than $3.4 billion, the Democrat leaders in the Legislature expanded the sales tax to health club memberships, dry cleaning and car rentals and a variety of goods and services.

As irresponsible as these policies are, this proposal to sell off valuable state assets is even more dangerous. The toll roads are steady source of revenue which provides income for the state even during tough economic times. Selling this asset for a one-time cash pay-off is shortsighted and eliminates one of the state’s regular revenues streams for years to come.

To fully understand the pitfalls of this type of arrangement, one can look to Indiana and Chicago which recently leased their toll roads to a foreign consortium. Indiana will get nearly $4 billion for a 75-year lease of one of its toll roads while Chicago will get $1.8 billion for a 99-year lease of a portion of one of its highways. While these numbers may seem astronomical, one must question the logic of trading away what is likely to be significant amount of income over the life of this arrangement in exchange for one-time cash payout.

In addition to the economic concerns, it is important to look at the other effects of giving up control of these roadways for many years. The roads are currently maintained in excellent condition. Once administration is transferred it is unclear whether this tradition would continue. As well, all decisions regarding the operation of the roadways, such as maintenance of the highways and the treatment of employees--will be made by executives, possibly in a foreign country, who do not have to answer to New Jersey motorists and taxpayers.

Further, it is worth noting that these arrangements will likely lead to toll increases. The Chicago plan allows the private vendor to eventually double tolls. In Indiana, the tolls are frozen until 2010 but would likely rise thereafter at a rate tied to inflation.

Years of fiscal mismanagement have put our state in a desperate financial situation. Instead of mortgaging our children’s financial future on get-rich-quick schemes, the Governor and legislative leaders need to start making some responsible decisions that will put our state back on sound financial footing. They should start by putting the brakes on this foolish idea of selling the state’s toll roads.

Assemblyman Sean Kean (R-Monmouth) is a member of the Assembly Transportation and Public Works Committee.