Port Authority NYNJ accepts lesser toll hikes decided by Governors Cuomo & Christie

August 21, 2011

Friday August 19 was Capitulation Day at the Port Authority New York & New Jersey (PANYNJ). The board of commissioners gave up the toll increases they'd voted for unanimously August 5 and substituted more modest and more staged increases laid out for them by the two state Governors.  The PANYNJ board of directors - "Honorables" all - had managed to unite two natural political enemies against the bistate toll authority - the conservative Republican New Jersey governor Chris Christie and the liberal Democrat governor Andrew Cuomo of New York.

Threatening to use their last-resort 'Gubernatorial' powers, the two state governors' staffs  got into negotiation with PANYNJ staffs for the toll increases that we dub Guvs-819 since they were formally adopted Aug 19.

The motion voted Friday has 'SUBJECT TO GUBERNATORIAL REVIEW' overprinted diagonally on every page, a reminder to readers that the governors are calling the shots. Both have the right to veto minutes - in effect vetoing any action taken by their state's nominees to the board, a rather large power that  PANYNJ officials - panicked by threat of a bond rating downgrade -  seem to have forgotten two weeks earlier.

(NOTE: the Minutes of 8-19 they know will NOT be overruled because they were painstakingly negotiated with the two Governors' staffs. These have 'SUBJECT TO GUBERNATORIAL REVIEW' overprinted, whereas the earlier Minutes of 8-05 which were effectively overruled had no such overprint!)

The toll increases going into effect September 18 as dictated by the two governors are less than a half those voted August 5 - which we dub PANYNJ-805 in the nearby table. For example peakhour car tolls with E-ZPass will go from $8.00 now to $9.50 a $1.50 or 19% increase, whereas August 5  the PANYNJ Honorables had voted  for a $4.00 or 50% increase in the same toll to $12.00 -  we dub it PANYNJ-805.

Measured by simple unweighted average PANYNJ's own set of toll increases of August 5 was 77%. Cash and truck tolls were - under the PANYNJ board plan - to have risen even more than the 67% of the E-ZPass commuter toll, taking the average even higher. The unweighted average toll increase now to go into effect Sept 18 under the influence of the governors is 35% and the most common commuter toll increase 19%.

Annual increases instead of one-off whopper

Now instead of one whopper toll increase immediately followed by a modest increase 40 months later at the end of 2014, there is now a schedule of annual toll increases. These are big enough! They will slightly more than double tolls (x2.08 by our sampling) at end-2015 in four years compared to hiking them immediately 77% and then getting them over double (x 2.04 by our sampling) present toll rates in three years' time in 2014.

The Guvs' toll increases put a slightly higher burden on the truckers and on cash-payers and a slightly lesser burden on commuters - people in cars traveling in peakhours with the E-ZPass transponder - than the PANYNJ proposal.


But they are still substantial - and done without any estimate of the effect on traffic and revenue that we can find.

The latest statement of the case for these drastic toll increases was put in the new Minutes:

"Faced with multiple unprecedented challenges at once - an historic economic recession that has sharply decreased Port Authority revenues below projections; steep increases in post- 9/11 security costs, which have nearly tripled, and the overall cost of the World Trade Center rebuilding; and the need for the largest overhaul of facilities in the Port Authority's 90-year history - on August 5, 2011, the Port Authority announced proposed bridges and tunnels toll and Port Authority Trans-Hudson (PATH) rail system fare increases and public hearings to be conducted in connection therewith."

(Where in the 21st century do they find someone who'll write a sentence ending "... in connection therewith"? Such persons write anonymously!)

Bizarre outfit
PANYNJ is an increasingly bizarre organization. The video of this recent formal meeting of the board of the Authority makes it look at first glance like a college revue with ruddy-faced besuited Michael Fabiano, PANYNJ's chief financial officer, speaking in front of a line of muscley bare-armed guys in orange T-shirts. (With "LiUNA!" on their chests they are apparently heavies from a laborers union that sees the toll hikes as funding work for the union membership, and expressing support for the PA. But did they muscle their way in there or did someone allow them to line up and form a backdrop to the speaker? Weird!)

No one at the Port Authority seems to explain why commuters from New Jersey and truckers moving through the region should be footing toll bills for the Port Authority's speculative office developments in lower Manhattan at the site of the destroyed World Trade Center. Since Sept 11, 2001 it has properly become an important national war memorial site. Usually national war memorials are a US Government function but oddly, here, a regional transportation authority seems to be footing the bills.

Columnist Joe Nocera in the NEW YORK TIMES asks some pointed questions:

"There is nothing wrong -- and much that is right -- with building a national monument to memorialize the nearly 3,000 people killed in the 9/11 attacks a decade ago. The awful events of that day traumatized the country -- and changed it. The dead deserve to be remembered. Far be it from me to suggest otherwise.

"What I do want to suggest, though, is that what's being built in the name of 9/11 -- a staggering $11 billion worth of government-sponsored construction on the 16 acres we now call ground zero -- is an example of just about everything wrong with modern government.

"When the World Trade Center site is finally completed, it will include a state-of-the-art train station whose cost overruns have surpassed $1 billion. The 9/11 memorial itself, which covers the footprint of the former twin towers, was so far behind schedule that it is now being hastily constructed, out of sequence, so that it will be ready by the 10th anniversary of the tragedy.

"And then there's 1 World Trade Center, scheduled to be completed in 2013, which will add 2.6 million square feet of office space in a city that doesn't need it, at a cost so high that it will be a cash drain for decades to come. Where's the Tea Party when you need them?

"1 (One) World Trade Center (at) $3.3 billion (is) by far, the most expensive office building ever constructed in America."

Nocera says Richard Gladstone, the World Trade Center project manager for the Port Authority told him a year or so ago that the new skyscraper "would not affect the commuters who pay the tolls to cross the six bridges and tunnels the agency operates."

No, not until the disastrous economics of an ultra-expensive office development in a glutted market got the PANYNJ into its present deep financial trouble. Now such promises are out the window and the Port Authority scrounges for money anywhere. And as usual it is road tolls that are the most reliable big income stream.

Subsidizing Conde Nast

High-end publisher Conde Nast is the first major tenant the Port Authority has signed up for the new 1 World Trade Center - and their rent is half what would be needed to break even.

Nocera: "And who will be paying for that subsidy? The mailroom attendants who use the Lincoln Tunnel to get to work. The middle-class New Jerseyites who use the George Washington Bridge. The firefighters and police officers who live in Staten Island. Thus, in the name of 9/11, does New York and New Jersey place another economic burden on the already overburdened middle class. How sad."

The latest financial report shows that tunnels and bridges at present toll rates made net profits in 2010 of $446m on revenues of $976m. Only the airports made larger profits - $506m but on revenues of $2,125m. The other lines of business lose money - ports, development, and the World Trade Center.

The PA Bus Terminal, part of the tunnels bridges and terminals division, lost $80m on revenues of $34m.  

GW Bridge the PA's big moneymaker

The George Washington Bridge is the big money-spinner making a net $262m profit on $436m in toll revenues last year despite Obama's great recession.  Then came Kennedy and Newark Airports. The Goethals Bridge made $82m profit on $123m in tolls, the Outerbridge $69m on $109m, the Lincoln Tunnel $11m on $153m tolls, the Holland Tunnel $29m profit on $126m tolls. (see table nearby) The Bayonne Bridge was a small loser - losing $7m on $28m in toll revenue.

Throughout the recent toll fiasco the director tunnels, bridges and terminals Cedrick Fulton has been conspicuous by his absence, although he heads up one of the two profit centers of the Port Authority. Decisions on toll rates are being made above his pay grade - which is notably low. He doesn't appear in the top twenty PANYNJ staff ranked by salary.

to see the board of directors bodyguard of orange shirted unionists:


Joe Nocera in NY Times:




TOLLROADSnews 2011-08-21 REVISIONS 2011-08-22

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