New Jersey Turnpike and Garden State Parkway up for sale?

| 3/31/2006

If a New Jersey state lawmaker gets his way, private groups would have an opportunity to own a piece of the New Jersey Turnpike and Garden State Parkway.

Sen. Ray Lesniak, D-Elizabeth, has drafted a bill that would authorize the New Jersey Turnpike Authority to sell or lease a 49-percent interest in the two roadways to raise $6 billion to help pay down the state’s pension liabilities. The embattled pension system is $12 billion in the hole.

“We have to find creative ways to deal with the budgetary deficits we face in this state,” Lesniak told The Star-Ledger.

The state could set up a for-profit corporation to run the highways. A noncontrolling interest would be sold or leased to investors while the state would keep 51 percent ownership.

Investors would get a fixed rate of return estimated at as much as 8 percent. New Jersey would continue to run the roadways and collect tolls.

Senate Minority Leader Leonard Lance, R-Clinton Township, said the partial privatization proposal is equivalent to borrowing to balance the state budget.

Gov. Jon Corzine also appeared unimpressed with the plan. The Democratic governor said without paying down debt or investing in capital functions, he would be against it.

“I’m more inclined to believe that if you are going to do something with turnpikes or parkways, it should go into long-term benefits. I think that pension payments are an operating expense,” Corzine told The Star-Ledger.

Corzine told The Associated Press he would be unwilling to sell or lease roads in the state without first examining situations in Indiana – which just OK’d a 75-year lease of the Indiana Toll Road to a foreign consortium – and Chicago where in 2005 the city leased its elevated highway known as the Skyway to the same foreign group for 99 years.

The governor said he would want to analyze how the deals affect tolls and maintenance.

Lesniak’s proposal would also prohibit any increase in fares until 2010. At that point, any rate increases would be limited to the rate of inflation.

The proposed bill – S1777 – is scheduled to be introduced formally when the Legislature returns from a break in early May.