NJ Acting Governor Richard Codey is considering leasing toll highways to private operators to infuse the deficit-ridden state budget with new cash. Articles about the Turnpike idea cited $10-20 billion as a possible lease price (not counting the Garden State Parkway or Atlantic City Expressway, which are apparently also under consideration).

It’s unclear how far the state has gone in analyzing the possibility, or whether a Codey decision not to run for governor this fall might deter him from entering a long-term deal. Codey has in fact asked legislators for more time to craft a budget plan for the coming fiscal year. It’s unknown whether he intends to hang it on something as untried and potentially controversial as a long-term rental of the Turnpike.

NJ citizens should have the full range of implications laid out for them before any deal is made. In any such plan, Garden State Parkway tolls are sure to rise significantly. The Parkway operates in the red today because tolls have been kept low by politicians. Parkway prices are subsidized by the Turnpike’s surplus. If the Turnpike is leased, the surplus would shift to shareholders and a still-public Parkway would have to hike tolls to stay afloat. If the Parkway itself is leased, tolls would also need to be hiked so the operator could turn a profit.

More important are the costs and benefits of renting out the Turnpike. The state needs to show citizens how much toll money they would likely pay, including profits, over the duration of the lease, and compare that to what the state could use a similar amount for (after Turnpike costs). Toll and Turnpike policy also needs to be situated within an overall state strategy. A Turnpike toll surplus could be returned to the state’s Transportation Trust Fund, to support NJ DOT and NJ Transit projects. On the other hand, the Turnpike Authority as a public entity will have a hard time significantly raising tolls, and a private operator may have more leeway to experiment with various forms of congestion pricing.

In any case, New Jersey needs to remember that 99 years — the duration of the lease cited in news reports — is a very long time. In 1906, for instance, the population of New Jersey was barely 2.5 million, average life expectancy was 49 and Ford was still four years from introducing the Model T. 

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