PANYNJ chief calls ex-cops effort to keep toll perks "offensive," puts taxmen on them

January 9, 2012
By Peter Samuel

Patrick Foye, chief executive at the Port Authority of New York & New Jersey (PANYNJ) says the law suits by their pensioners to maintain lifetime toll-free privileges are "offensive." Playing hardball he has asked New York and New Jersey tax agencies to investigate whether the pensioners owe the two states taxes on the value of these "perks." And whether they should be charged interest and tax penalties for failing to declare their taxable value.

Two PANYNJ retirees have sued the NY-NJ toller claiming the withdrawal of toll-free trips is a violation of due process and  breach of contract. One of the suits seeks 'class action' recognition on behalf of up to 4000 others on PANYNJ pensions. Some of the labor unions covering PANYNJ employees have also filed grievances.

The authority says the toll-free transponders issued after the 9/11 attacks were one of many discretionary privileges that were granted generously in traumatic circumstances that have now passed.  They are looking to "rein in" other perks to which they say there is no contractual commitment.

Union members hired pre-9/11 still get toll-free rides while on the job, but not in retirement.

The board of directors  of the PANYNJ voted in November 2010 to revoke toll-free privileges - in the form of no-pay E-ZPass transponders for PANYNJ bridges and tunnels. The perk also enabled PANYNJ pensioners to park free at Kennedy, Newark and LaGuardia airports run by the PANYNJ.  

Christie led criticism

NJ Governor Chris Christie had made strong criticisms of the perks.

The announcement Nov 18 2010 said: "The Port Authority Board of Commissioners today approved the elimination of non-revenue producing E-ZPasses for agency commissioners, retirees and non-represented (non-union) employees hired after the attacks of September 11."

Quotes were:

Port Authority Chairman Anthony R. Coscia: "Today's action is a critical step to ensure the traveling public knows we are guarding their toll dollars carefully."?"

Port Authority Executive Director Chris Ward: "In our ongoing effort to cut costs, this policy is another step to meet the financial reality facing this agency."

Port Authority Deputy Executive Director Bill Baroni: "The region is suffering from financial hardship, and that's why, under Governor Christie's leadership, we are eliminating benefits that are unavailable to the toll-paying public."

The press release continued: "Under the Board's action, the agency will allow employees continuously employed on or before the attacks on September 11, 2001, to receive the E-ZPass benefit for commutation purposes only until the Port Authority's corporate headquarters are re-established at the World Trade Center site in 2014, when the Board expects the full elimination of the E-ZPass benefit for all agency employees.

"This policy recognizes the displacement of staff throughout the agency as a result of the terrorist attacks of September 11, and the fact that normal commuting patterns were significantly altered and disrupted through staff reassignments to alternate work locations due to the destruction of the agency's headquarters at the World Trade Center.??"In addition, the agency will continue to meet its commitments to the spouses of Port Authority employees who were killed in the World Trade Center attacks in 1993 and 2001 who currently receive the benefit. It also preserves the benefit for marked emergency vehicles."

Governor Christie gained wide public support for the moves which were not protested at the time by any of his political
rivals.

$1.5m million/year

The actual money involved is not large, relatively - about $1.5m/year compared to some $1,000m in tolls about one sixth of one percent.

Two of the litigants are PANYNJ police officers who are embarking on second careers - they can retire at 50 - as lawyers.
Thomas Westfield a former PANYNJ detective sergeant who retired in 1998 and as a lawyer now has filed what he seeks to have accepted as a class action suit.

Westfield claims the PANYNJ promised "right to free passage at the Hudson River vehicular crossings" to all new employees both "during their tenure of employment and for life upon successful retirement."

This right to free passage goes back before Westfield's own start of employment at PANYNJ in 1971, he says.

Free rides were fulfilled then with the issue of paper passes handed to toll collectors rather than cash. The privilege  transitioned to issue of no-pay E-ZPass transponders in 2002.

"In writing... a promise for life"

Westfield says the benefit of toll-free rides for life was put in writing following negotiation and its revocation therefore constitutes breach of contract.

He is quoted: "They negotiated, and if they gave it away and they have a buyer's remorse now, I feel sorry for them, but that's not the way to do things."

Michael Shuhala a 2003 retiree who is suing for himself says only that the revocation of perks violated due process. He is quoted by the Newark Star Ledger: "I was given a right, they paid for the right (for) seven years, eight years, then they just revoked the right without any due process."

The PA Police Benefit Association the major union representing PANYNJ cops and other unions have filed "grievances" in line with the law suits.

PA "stands by" end to perks

PANYNJ said last week in reply: "The Port Authority eliminated this benefit that was unavailable to the toll-paying public and stands by its decision. As the Special Committee continues the comprehensive agency-wide review (of costs) currently underway, the agency will be looking for other compensation and benefits that can and should be reined in..."

It followed up with a hard-hitting statement by executive director Pat Foye saying "This case, which involves Port Authority pensioners suing to enjoy a toll-free retirement, is offensive to me."

Possible tax evasion charged

He continued saying they were alerting the taxmen of both states to possible tax evasion in connection with the perks:

"I have asked the New York State Tax and Finance Department and the New Jersey Division of Taxation to determine whether the 400 plaintiffs owe taxes, interest and penalties for this tangible benefit that was never a lifetime promise.

"A daily toll-free Port Authority pensioner would have enjoyed a $2,000 tax-free benefit, while the commuter in the next lane would have paid his or her tolls with $2,000 after-tax dollars.

"I leave the question of taxes, interest and penalties owed up to the revenue folks (taxmen) in Albany and Trenton. I assume that lawyers for the retiree plaintiffs informed them of their tax risks."

TOLLROADSnews 2012-01-08


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