Anatomy of A Toll Hike Proposal

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Cars Headed To Holland Tunnel (photo: Kate Hinds)

To be in a vehicle on a Friday afternoon in New York City is a particular kind of hell.  No matter where you go, there are thousands of motorists in front of you, edging their way off the the Holland Tunnel, the George Washington Bridge, the Lincoln Tunnel. We New Yorkers pride ourselves on being able to game the system -- on finding the one traffic-free road out of town, or choosing the bridge or tunnel that will get us to our weekend destination most quickly, or taking the train, or staying put, or figuring out, down to the minute, when is the best possible time to leave to beat it all.  But still, somehow almost every New Yorker has found him- or  herself slowly but inevitably inching towards one of the Port Authority crossings on a Friday afternoon, stuck in a nasty and impenetrable row of barely-moving vehicles.


Funny that, because around 4 pm on Friday is when the Port Authority announced a proposal to raise toll rates to as much as $15 during peak times (from $8) for drivers paying cash – somewhat less for EZ Pass users – and to raise the PATH commuter train fare from $1.75 to $2.75.    It was a decision the bi-state authority has found itself inching inevitably towards.

Now, a digression on the timing of the release. Friday afternoons –- particularly in August-- are when governments dump bad news.  The Port Authority press release not only came late on a Friday, reporters’ email inboxes soon filled with statements of support from business, labor and transit groups.  Then, to further the proposal:  a carefully-worded – and unusual – joint statement from Governors Andrew Cuomo and Chris Christie, who together control the Port.  The Governors were careful not to rule out the hikes.   (Keep reading for an explanation of why.)

The release – which cited 9/11-related World Trade Center costs as a major impetus behind the hikes – also came out about a month before 9/11’s tenth anniversary.  If you’re going to ask for tolls to pay for WTC-related costs, August 2011 is a pretty good time to do it. When asked about whether he had any explanation for the timing of the release, a Port Authority spokesman said he’d “take the hit on that. “

Oh yes, there’s another thing. In these fare-hike battles, typically an Authority will put out a true doomsday hike plan. Toll and transit users will howl, as will politicians. Then, at the end, governors will “find” some money, and everyone will feel relieved that the hike is not as bad as initially proposed.

But back to the snarl, and how we got here.

Since the 9/11 attacks, the Port Authority, which owns the 16 acre-site where the Twin Towers once stood, has been responsible for rebuilding the World Trade Center, and for the increasingly apparent security needs of the new One World Trade (aka the “Freedom Tower.”)

In a press release announcing the toll hikes, the Authority put those costs at $11 billion and $6 billion respectively, though that doesn’t account for what the Authority has received in insurance money and some rent payments.

But still.  It hasn’t been hard to trace the growing costs.  Take just one example: the World Trade Center transit hub, which architect Santiago Calatrava once described as evoking “a dove in flight,” was initially projected to cost $2.2 billion.  Its price tag is now $3.44 billion. Some 50,000 commuters from New Jersey use that station, a number that’s expected to rise to 70,000 when the new station is built. About 750,000 riders pass through Grand Central Station each day.

Three point four billion dollars is a lot of money for a train station, but at the same time, it will be at one of the most emotionally resonant locations in the world. Who wants to say 'No, it’s not worth it?'

There’s been a lot of that at the WTC, but that only partly accounts for the Port Authority’s budget problems. The struggling economy has meant both a smaller number of drivers paying tolls, as well as fewer airport fees.

But that still doesn’t paint the whole picture. Unlike, say the NY MTA, which gets (dwindling) subsidies from the government and from taxes, the Port Authority raises all its own revenue from tolls and fees. The bi-state authority is controlled by two governors, in this case, NJ Governor Chris Christie and NY Governor Andrew Cuomo. Both men have cut taxes, and have made it clear they don’t intend to raise any more. Which means the Port Authority revenues look increasingly attractive to both men -- who, after all, do have to pay for infrastructure one way or another.

Governor Christie has asked the Port Authority to use the $1.8 billion it would have contributed to the ARC tunnel to improve roads, which solves part of the budget hole created by Christie’s decision not to raise the gas tax to fund the state highway trust fund, which is broke. And the NY MTA -- controlled by Cuomo --  has asked for $380 million from the Port Authority for the NY MTA’s capital plan.  "These raids are pressuring the fares,” says Kate Slevin, executive director of the Tri-State Transportation Campaign. “Christie is using the $1.8 billion to plug holes in the state’s transportation program.”

But Tom Wright, executive director of the Regional Plan Association, backs the plan to raise tolls. “Tolls should not be off-limits. There has to be some way to pay for surface transportation.”

It appears that Governors Christie and Cuomo might be coming to the conclusion that of the various unpalatable options -– raising taxes, turning over more money from their respective state budgets to transportation, or raising tolls -- that raising tolls through the Port Authority, which offers them some political insulation, might be the best of the unsavory choices.  In a carefully worded statement Friday, which underplayed their own control of the Port Authority, the two governors said:

“The Port Authority has informed us of its proposal to dramatically increase tolls on its tunnels and bridges and fares on the PATH.

While we understand the Port Authority leadership's concerns about a potential downgrade to its bond rating if toll increases are not instituted, our primary concern with this proposal is its impact on our respective states’ residents and commercial users of the crossings.”

On Monday Christie gave a further hint that he might support toll hikes in some form. Cutting the Port Authority’s budget “would mean that hundreds of projects would have to be stopped, that thousands of people would be laid off, and that progress on the redevelopment of the World Trade Center site would slow, if not stop. So, governing is about choosing. You’ve got to make choices.”

Cuomo also did not rule out toll hikes, though he called this proposal “a non-starter” at a Tuesday Q&A with reporters. Still, he said, he understood the Port needed money, and said that he’d huddle with his two appointees on the board (the others were appointed by his predecessors or by New Jersey) to review the proposal.  He gave no timetable for the review, but did say: “The knee-jerk response of 'the government needs more money, go to the taxpayer, put your hand in the taxpayers' pocket, take out more money and fund it' --  that doesn’t work for me.  It doesn’t work for the taxpayer and it doesn’t work for the state of New York."

The Port Authority estimates raising tolls would produce $720 million a year, and an additional $290 million a year after 2014, when tolls would rise again.

But it estimates two incentives in the plan –- a steep discount for EZ Pass users and more off-peak hours for trucks -- would ease congestion at tolls by encouraging some 85 percent of drivers to use the tags, and nudging trucks to drive in later where possible. (Truck drivers have argued it's impossible to deliver some goods in the middle of the night, but the Port Authority says previous off-peak incentives have pushed drivers to enter the city at non-peak times.)

There are certainly people for whom a toll rise creates unbearable hardship, particularly people who moved out to the exurbs for larger, cheaper housing and now find themselves paying huge amounts for gas to get to their New York City-based jobs.

But Robert “Buz” Paaswell,  a City College of New York professor, says he did a study for the Tri-Borough Bridge and Tunnel Authority, a division of the NY MTA, on the feasibility of raising tolls. After all, if you raise tolls so much that people just don’t pay them, you’ve done an exercise that may get drivers off the street, but won’t increase revenue. “We did a study for the TBTA, looking at classes of riders, and asked what is the elasticity of different prices. In the end the demand to cross the bridges is so very high, the alternatives are so very low that people are going to gripe and then they are gonig to pay it.”