Hoboken – Pay to exit
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From the Ledger:
Turning free highways into fee highways
To bring in revenue, state treasurer looks at establishing tolls on some roads
In its continuing search for new ways to raise money, the Corzine administration is considering converting free highways into private toll roads.
The administration — in the most preliminary way — has asked for proposals to study the conversion of Routes 78, 80 and 95, the Pulaski Skyway and the section of Route 440 in Middlesex County between the New Jersey Turnpike and the Garden State Parkway into toll roads. This idea grew out of previous discussions about selling or leasing the state’s toll roads.
During interviews yesterday, state Treasurer Bradley Abelow and Transportation Commissioner Kris Kolluri confirmed that they had advertised for an engineering consultant and a traffic and revenue consultant to help determine what those roads might be worth if they were sold or leased to a private company. They stressed that the move was part of a wide-ranging state effort to look at any possible way to raise revenue.
“I think it might have started when I asked Kris why we have tolls on some roads and not others,” Abelow said. “What would be the value of having tolls on other roads? It’s not necessarily something we want to do or intend to do, but at least let’s understand what it means.”
The state hired the financial services firm UBS in September to study its assets and suggest ways they might be “monetized” — that is, sold or leased to raise cash. The request for qualifications that led to the hiring of UBS made no mention of the non-toll roads.
The contract with UBS calls for the firm to report to Abelow in mid-October. That report has yet to be made public.
Abelow’s office issued separate requests for proposals for the two consulting positions Oct. 12. Interested firms had until Oct. 26 to respond. Abelow’s spokesman, Tom Vincz — who described the process as a study of “what’s possible rather than what’s probable” — said the responses are still being evaluated and no one has been hired.
Once they’re hired, the consultants will have 90 days to complete their work. Their studies will include the four non-toll roads as well as the Pulaski Skyway, the Turnpike, the Parkway and the Atlantic City Expressway. The last three already are toll roads.
The engineering consultant will study the condition of the roads, analyze how much it would cost to bring them into good repair, review the maintenance costs, offer an opinion on how long they might last and prepare a “transportation asset analysis,” according to the request for qualifications issued by Abelow’s office.
The traffic and revenue consultant will review and collect information on traffic volume, toll revenues and other data that might help the state determine the value of the roads, according to the second request for qualifications.
“It’s entirely premature to say what the value of any of these roads might be,” Kolluri said. “It’s entirely premature to say that there is a value attached to any of those roads. That’s going to take some time.”
One issue the consultants will study is how adding tolls on a free highway might affect traffic volume on nearby roads, according to the document Abelow’s office issued when it began its search for a consultant.
Federal transportation law allows states to set up tolls on interstate highways such as Routes 78, 80 and 95 with the approval of the Federal Highway Administration.
“It would be a bold undertaking to do this,” said C. Kenneth Orski, editor and publisher of Innovation Briefs, an industry newsletter. “It would be a precedent — and a bold precedent — to take away existing general purpose lanes and convert them into toll lanes.
“Technically, it could be done, but it would be politically hazardous.”
There are other models around the country of ways a private, for-profit concern might get involved in an existing non-toll highway, said Peter Samuel, publisher of Toll Roads Magazine, another trade publication.
For example, there are two interstate highways in Virginia where private companies have proposed building additional lanes in exchange for the right to charge tolls in those lanes. If those projects get built, the roads will have the same number of free lanes plus some toll lanes for drivers willing to pay a fee to escape congestion.
Those lanes, which have been done on public highways in Minnesota, Colorado, California and elsewhere, are usually known as H.O.T. lanes. Critics sometimes refer to them as “Lexus lanes” to suggest that they offer a remedy for congestion only for those with money.