New Jersey Considers Privatizing Roadwork as Transport Funding Dries Up

New Jersey will have to consider turning to private companies to finance transportation projects as the fund financing roadwork runs short of money, the head of a panel studying the issue told lawmakers.

New Jersey’s Transportation Trust Fund Authority, which is supported by the state’s 10.5-cent-a-gallon gasoline tax, will be hard pressed July 1 when payments on $12 billion in outstanding debt consume its $895 million in annual revenue, said former U.S. Representative Richard Zimmer, who leads the panel. The highway account is scheduled to issue as much as $1.75 billion in bonds later this month.

“We’re just headed toward a brick wall,” Zimmer, a Republican, said following a hearing in Trenton today on privatization proposals from the governor. “There’s a pretty grim situation. By the process of elimination, public-private partnerships are going to be part of that solution.”

Governor Chris Christie has called for turning services such as roadwork and concessions in state parks over to companies as a way to save more than $210 million and improve government services. Zimmer said today potential deals could include the sales or lease of state assets as well as so-called public-private partnerships to build new infrastructure.

Christie, 48, a Republican who took office in January, closed a record $10.7 billion deficit in his budget for the current fiscal year, including saving $50 million and cutting as many as 1,300 state workers by shifting services to private industry. Zimmer’s report said the state may be able to save as much as $42.5 million a year by hiring an outside company to handle toll collection on the New Jersey Turnpike and Garden State Parkway.

Atlantic City Expressway

Deals with the private sector may only yield as much as 15 percent of the money needed to fully replenish the transportation trust fund, Transportation Commissioner James Simpson said. The state will seek bids “in the next few weeks” from companies to provide about 500 part-time toll collection jobs on the Atlantic City Expressway, he said.

Simpson and Zimmer didn’t offer enough specifics on the potential savings, said Assemblyman John Wisniewski, a Democrat from Sayreville who heads the assembly’s transportation committee. The lawmaker said he wants to restrict public-private transportation deals to building new roads and bridges.

‘Rearranging Deck Chairs’

“If they’re just rearranging deck chairs and refinancing existing infrastructure, it doesn’t make sense,” he told reporters. “At some point there is a loss of control and there’s a loss of accountability. That’s one of the most important aspects of any elected government.”

Zimmer’s taskforce also proposed allowing companies to run concessions at state parks, charging employees a parking fee and relying on nongovernment workers for some health-care services. The report recommends that the state stop building public pre- schools in the poorest districts and continue to pay to enroll toddlers with private providers.

“New Jersey needs a transportation network that meets its needs not its politics,” said Zoe Baldwin, New Jersey advocate with the Tri-State Transportation Campaign. “The administration called privatization ‘a tool to be used.’ We need to make sure there’s a safety-break on this chainsaw.”

To contact the reporter on this story: Terrence Dopp in Newark, New Jersey, at tdopp@bloomberg.net.

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