PANYNJ facing weak revenues, needing big projects, proposes toll hikes in range 50% to 125% (COMMENT ADDED SATURDAY)

August 5, 2011
By Peter Samuel

Facing serious shortfalls in revenue Port Authority New York & New Jersey (PANYNJ) staff are proposing major increases in tolls in September. Peakhour roundtrip toll rates for cars on the six New York-New Jersey crossings would rise from $8 now with an E-ZPass account to $12 or by 50% while off-peak tolls, now $6, would go to $10 or 67% up.

Cash tolls for cars would increase the most, going from $8 now to $15 or 88%.

In 2014 all car tolls would be increased another $2 at which time tolls would be $14 peakhours E-ZPass, $12 off-peak E-ZPass, $17 cash.

It is three years since the last toll increase.

There will be public hearings on the proposed toll increases August 16 and a vote by the board of commissioners August 19 with the higher tolls to take effect in September.

The larger increase in the cash toll premium over E-ZPass is aimed at getting E-ZPass share of tolls up to 85% from the present approximate 75%. That is expected to reduce travel delays in peakhours by 10 to 20 minutes. Toll lanes with E-ZPass can process at least three times the number of cars/hour as cash lanes.

Truck tolls would go up more than car tolls.

The per axle toll for E-ZPass trucks in peakhours will go from $8/axle to $14/axle 75% up, in off-peak from $7 to $13/axle, 86% up. Cash tolls for trucks would go from $8 to $17/axle, a 2.125-fold hike. All the truck tolls would rise by $2/axle in 2014.

Tolls are also being hiked slightly by an extension of peak hours from three to four mornings and afternoons weekdays and by two hours at weekends.

Current peak hours: Weekdays 6-9am, 4-7pm; Sat & Sun 12noon - 8pm.

Proposed peak hours: Weekdays 6-10am, 4-8 pm; Sat & Sun 11am - 9pm.

Current off-peak hours: All other times and six holidays. Proposed off-peak hours: All other times.

On the other hand for trucks the discounted overnight rates will begin at 10pm rather than midnight, still ending at 6am.

Staten Island residents with E-ZPass accounts keep their discounts that toll them at half toll.

Car-poolers and 'green' cars also keep their discounts until 2014 when their tolls would be increased by $2.

Tolls are collected eastbound from New Jersey into New York only. Westbound journeys are therefore toll-free, making the eastbound toll effectively a 'round trip' toll.

PANYNJ operates and tolls George Washington Bridge, Lincoln Tunnel, Holland Tunnel, Goethals Bridge, Outerbridge Crossing, Bayonne Bridge - the first three being connections between New Jersey an Manhattan NY, the last three between New Jersey and Staten Island NY.

http://www.panynj.gov/about/toll-fare-2011.html

Rationale

The PANYNJ announcement says the toll increases are the result of three "unprecedented challenges"

(1} a "historic economic recession" that has sharply decreased revenue below projections,

(2) steep increases in post-9/11 security costs, which have nearly tripled, and the overall cost of the WTC rebuilding, and

(3) the need for the largest overhaul of facilities in the agency's 90-year history  

They say: "The proposal comes only after the Port Authority initiated an aggressive cost-cutting plan started in 2008 to manage its resources as the impact of the economic recession became clear: cutting $5 billion in capital projects and deferring billions more; holding operating expenses at zero-growth for three consecutive years; and cutting agency headcount to the lowest levels in 40 years - an 11 percent reduction of non-police staff in the last five years."

Projects said to be dependent on the proposed toll increase include:

- the first replacement of all 592 suspender ropes at the 80-year old George Washington Bridge, the world's busiest crossing, joining other suspension bridges like the Golden Gate and RFK, which have already replaced theirs. ($1 billion)

- the replacement of the Lincoln Tunnel Helix or spiral approach ($1.5 billion)

- the raising of the Bayonne Bridge to solve the current clearance problem and allow larger 'post-PANAMAX' container ships to access the port of Newark ($1 billion)

- a new bus garage connected to the Port Authority Bus Terminal, which will serve as a traffic reliever to the Lincoln Tunnel and midtown Manhattan streets, saving two-thirds of the empty bus trips that must make two extra trips through the tunnel each day. ($800 million)

- security investments at the region's airports, including the installation of security barriers. ($360 million)

http://www.panynj.gov/press-room/press-item.cfm?headLine_id=1401

EDITORIAL COMMENT: The current management of PANYNJ has to be among the worst in tolling in the country. This proposal has all the hallmarks of a hurried scheme cobbled together in a panic. Unlike, for example, the recent toll hike proposal for the Illinois Tollway there's no financial plan, no analysis of the effect on traffic and revenue, and no careful presentation of an argument for the toll increases. This is extraordinary ineptitude.

PANYNJ follows the most botched and bungled toll system procurement we've covered in 15 years reporting on tolling in north America with a huge, panicky, unjustified - we're not saying unjustifiable, but not justified - grab for motorists' money.

Overall it looks as though the toll increases proposed average around 65% - PANYNJ doesn't tell anyone - suggesting revenue might rise about 50% to about $1.5b from the $1.02b revenue. Given stable operations and maintenance of around $0.4b the gross profit from toll crossings would rise from $0.62b to about $1.1b.

You might think such a radical move would be supported with a careful financial analysis and detailed plans for the use of the money. Not at PANYNJ. They toss off a list with most items rounded to the nearest half billion dollars.

Most of the extra toll revenue will get wasted away in unprofitable and unjustified real estate developments - crony capitalism - and loser ports, trains, and ferries.

Mass transit without the mass

Consider the scandal of the trains - the Port Authority Trans Hudson subway (PATH). It has a capital budget twice that of the Tunnels, Bridges & Terminals (TBT) - the toll division. As well as being more capital intensive it is more labor intensive. PATH has a larger staff than TBT.

This supposed "mass transit" operation carries less than a third the number of passengers that the TBT toll division supports in vehicle trips. If the average tolled vehicle carries 2 persons the tunnels and bridges carry seven times the number of people of PATH.  As well TBT carries a lot of freight, and service vehicles. PATH is just commuters.

TBT generates ten times the revenue of PATH - $1,018m vs $104m. Operations and maintenance alone on PATH cost 2.5 times the revenue generated, so the trains run at a huge loss.

The operating profit per vehicle trip via TBT at current toll rates is $2.55, whereas PATH loses $2.00 per trip just counting O&M.

A PANYNJ serious about investing resources wisely and controlling costs would be thinking about how to end the PATH profligacy, and getting out of loser real estate, and ports, and concentrating investment on the modes that pay their way. No hint of that from the present inept crew.

see Illinois Tollway toll hike presentation, a model of planning and deliberation in comparison with PANYNJ's sloppy improvisation:

http://www.illinoistollway.com/portal/page?_pageid=133,2980078&_dad=portal&_schema=PORTAL

OUTSIDE COMMENT

from a New Jersey housing construction executive:

"It's interesting that one of the justifications for increasing the tolls is 'a historic economic recession' that has sharply decreased revenue below projections.

"What struck me is that this agency is completely ignoring that its patrons might also have some 'revenue shortfalls' due to the recession.

"I work in the homebuilding industry. We are suffering a depression, and have been for some years now. My company responded not by increasing home prices but by:

- Cutting costs so we could lower home prices

- Laying off 2/3 of our workforce

- rebidding all of our vendor contracts

- shedding assets we no longer needed.

"I think this shows the difference between a government run operation and the private sector. Is the Port Authority doing any of what my company did?"


TOLLROADSnews 2011-08-05 EDITORIAL COMMENT ADDED 2011-08-06 18:30 OUTSIDE COMMENT 2011-08-08 10:00

Further Reading


Leave a comment:

 
 
 
Upcoming Events