New Jersey..and how it got that way: June

Posted December 20, 2007 by Brett Avery

Situation: Increased traffic threatens to overload the state’s transportation network. Soaring transit costs could cripple the state’s economy.

Cause: Ever since Colonial days, New Jersey’s growth has been tied to its position as a transportation linchpin along the Eastern seaboard. The state has been transformed by successive waves of ships, trains, cars and trucks, and aircraft into an agricultural, manufacturing, and technology powerhouse. In recent years, though, the state has groaned under the weight of increased traffic, in part due to inadequate planning and construction. The condition of New Jersey’s roads and congestion at its leading airport rank among the worst in the United States. Its commuters’ woes grow exponentially because the state lacks the dollars to address these concerns.

How to fix:

1. Replenish the Transportation Trust Fund. Without this crucial change, any solution would be a non-starter.

The state established the fund in 1984 to pool transportation taxes—from sources such as tolls, heavy-truck fees, and the gasoline sales tax—to pay for construction, repair, and replacement of roads, railroads, and buses. The model was envied by other states when it initially covered 100 percent of the capital improvements. Now it struggles to cover 20 percent of those costs.

Originally, the fund was kept separate from operating costs and designed for pay-as-you-go work: Income from state transportation taxes went directly to projects. But in the early 1990s, lured by what a state official called “the narcotic of debt,” governors and legislators began using the fund to leverage borrowing to pay for operating costs, repairs, and replacements—costs that previously had been paid out of the General Fund (the pot into which all taxes are dumped).

State officials magnanimously doled out long-sought perks—the River LINE (Camden-Trenton), Hudson-Bergen, and Newark light rail lines, and the Atlantic City marina tunnel chief among them. Those achievements are outweighed, however, by $7 billion in trust-fund debt accumulated since 1993, when the fund abruptly began covering less than 20 percent of capital costs.

There’s a simple solution: Raise the country’s fourth lowest state gasoline tax—14.5 cents a gallon, unchanged since a 2.5 cent bump in 1988, when a gallon of gas cost about a dollar. The Legislature could hold its nose, match the U.S. average of 27.4 cents, and vow to take on no new debt. But 27.4 cents won’t keep pace with inflation, spiraling debt service, or the price of gas.

Adopting a tax levied as a percentage of a gallon’s base price has three significant benefits. First, future Legislatures won’t cripple the fund or the state if they refuse to raise taxes. Second, increased receipts will accelerate repairs deferred in recent years. And third, high gas prices deter consumption and increase the relative value of public transportation.

2. Lease the Turnpike, but… Governor Jon Corzine has pushed “monetizing” the Turnpike as key to solving the state’s fiscal woes. Under such long-term leases, a toll road owner (the state) collects a lump-sum payment from an operator in exchange for a contract to run the road within specific guidelines. A lease could give the state the opportunity to cancel the deal and reclaim the roadway.

Private-public construction of toll roads has occurred in the United States for many years—the Southern Connector in Greenville, SC, and the soon-to-open South Bay Expressway in San Diego are two recent examples. But the United States lags the world in leasing existing roads. The first was a 99-year, $1.83 billion deal three years ago for the eight-mile Chicago Skyway, signed by Spain’s Cintra and Australia’s Macquarie Infrastructure. Indiana received $3.85 billion last summer from those companies in a 75-year deal for the 157-mile Indiana East-West Toll Road, which connects with the Skyway. Governor Mitch Daniels plans for a big chunk of the money ($875 million) to go toward a “Major Moves” umbrella of transport projects, with another $225 million going to pay off outstanding road bonds. Both Cintra and Macquarie pledged immediate repairs and improvements. This year, half of the Skyway’s eight miles are being resurfaced, nineteen bridges are being upgraded, and toll lanes are being reconfigured. From all appearances, the terms of the deal are being met.

Corzine wants a lease bonanza to pay off some of the state’s  roughly $35 billion in debt, which frees up future dollars for additional services or tax cuts. Here’s the thing: The state gets one shot at this found money, and if Trenton blows it by not reforming its wasteful ways, the state may never recover. It’s a dangerous proposition in a state that previously touted casino gambling, an individual income tax, and property tax reform as panaceas to fiscal woes.

3. Make mass transit a viable alternative for more New Jerseyans. Parking conditions were horrendous around most train stations long before 2005, when NJ Transit first exceeded 800,000 round trips on the average business day. While NJ Transit was trying to shoehorn parking spaces into vacant lots or building garages, Maplewood in Essex County began a jitney service. That was a decade ago; NJ Transit says surveys show 200 of Maplewood’s riders—one in eight commuters—uses the jitney. Nearly half previously drove to the station. Fifty percent of new-resident commuters said the jitney was a factor in moving there. Other towns have instituted jitney service, and it’s a low-cost fix more towns should embrace. Still, the cost of mass transit is rising: NJ Transit has approved an average 9.6 percent fare increase for its trains, buses, and light rail, expected to kick in this month.

More than a dozen municipalities are rushing to change the landscape around their stations with “transit villages.” The plan promotes foot traffic through a combination of residences, stores, and restaurants. While those projects may lure affluent residents and generate tax dollars, they may ultimately inconvenience existing park-and-ride commuters by redesigning the transit hub to be more pedestrian-friendly and decreasing the number of easily accessible parking spaces. Local business owners also worry that non-commuters who come to shop and do business in these towns will find insufficient short-term parking spaces. Adopting jitneys and taking steps such as encouraging bicycling to stations can alleviate traffic congestion and serve everyone—even in towns that can afford extensive “village” construction.

4. Calm traffic = safe roads. Speed zones, increased law enforcement, and “your speed is” radar signs dampen drivers’ zeal only temporarily. Small touches such as raised crosswalks, textured pavement, speed humps, narrower traffic lanes, and “bulb-outs” or “neckdowns” (curbs that narrow the street at intersections) slow even the most aggressive drivers.

On the topic of safety: New Jersey’s reputation as a conduit of commerce will be tarnished if its roads, bridges, and rails deteriorate. Periodic derailments on the Northeast Corridor line between Philadelphia and New York, fatal pileups on the interstates, and the occasional single-engine plane crash will pale compared to something like the 1987 collapse of a bridge on Interstate 90 in upstate New York (caused in part by inadequate maintenance, which led to severe erosion), killing ten people. New Jersey will be viewed as a robber baron if it neglects its infrastructure while extracting sizable tolls from users.

For more stories about: New Brunswick, Port Newark , Trenton