Port Authority Challenged in Court on Toll Increase

The first public court hearing in a lawsuit challenging the Port Authority of New York and New Jersey's recent toll hikes was held Thursday — and at the heart of the dispute is the shifting justifications for the increase: either to fund transportation or help pay for the $11 billion World Trade Center redevelopment.

At a Port Authority Board meeting, later in the day, Chair David Samson wouldn't comment on any of the specific details of the pending litigation, but he disagreed with the AAA's assertion that the agency had misled the public into believing toll revenues would support the WTC.

"I think we were pretty clear about what we were talking about at the time," he said. "There's no doubt that in discussing the proposed toll and fare increase, we attempted to describe the overall financial condition of the agency. Inevitably, if you're going to be talking about the overall financial condition of the agency, you're going to talk about security that was added post-9/11 and the World Trade Center redevelopment site. There was to my knowledge, no reference, no specific statement, that said the proposed toll and fare increases were going to some other use, or some other place, other than what the executive director said was the integrated transportation network."

The Port Authority raised the cash cost of crossing the Hudson River bridges and tunnels from $8 to $12 in August. At the time, the agency's then-executive director, Chris Ward, said the hikes were "absolutely necessary” for the agency to grow and maintain.

Pat Foye, the Port Authority's executive director, wasn't heading the agency in August. But he said the Port Authority's message has always been consistent. And the bottom line, he said,  was if the agency hadn't raised tolls this summer, "there would have been a drag in the amount of $3 billion dollars on the rest of the organization, the non-interstate transportation part of the organization. And the fare and toll increase reduced the drag, reduced the burden, on the rest of the organization."

In legal filings, the Port Authority said the money from the toll increase is being used to fund its Interstate Transportation Network (ITN), which consists of its tolled bridges and tunnels, as well as the PATH train and the Port Authority Bus Terminal. But an August press release cited the cost of the WTC site as an example of the financial stresses it faced.

Neither New York Governor Andrew Cuomo nor New Jersey Governor Chris Christie, who jointly control the Port Authority, have explained the shifting justifications for the hike.

Robert Sinclair, a spokesman for the New York and North Jersey chapters of the Automobile Association of America, the group suing the agency, said the WTC — "far and above the most expensive thing they are talking about doing" — is not considered a transportation expense.

“Why should motorists pay for a half-empty office building that they’re having a difficult time attracting tenants to?” he asked.

The AAA wants a federal judge to block the Authority's toll increases and said the Interstate Transportation Network is in the black, making the hike unnecessary. The Port Authority disputes this, saying in an affidavit (pdf) that "even with the tolls and fares increase, the ITN will still operate at a deficit and will likely require support from other facilities."

The Port Authority said it needs the toll revenues to fund its $25 billion 10-year capital plan and the lawsuit should be dismissed.

Last week, a New Jersey assemblyman asked Christie to investigate how the Port Authority is handling the toll and PATH fare hikes.

In September, just before the increase went into effect, the AAA asked the U.S. Department of Transportation to block it. The DOT declined, and so the AAA brought suit. AAA says it's relying on legal precedent from the last time it sued the Port Authority, which was over the agency's 1989 toll hikes.

"We didn’t want motorists paying to subsidize the PATH," said Sinclair.

A court ruled against the AAA, saying the Port Authority could use toll hikes to fund transportation projects. You can see the AAA's complaint against the Port Authority here (pdf).

Coincidentally, the Port Authority's board voted on the 2012 budget Thursday afternoon. It sets aside $3.9 billion for capital improvements, but most of that money goes to the World Trade Center.

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