Aug. 18 (Bloomberg) -- New Jersey Governor Chris Christie said he and New York Governor Andrew Cuomo may issue a counteroffer to the Port Authority of New York and New Jersey’s plan to raise tolls by as much as 88 percent.
Agency board members are scheduled to vote tomorrow on a plan to raise bridge and tunnel fees. Christie, who said last week it was unlikely the plan would move forward as proposed, declined to say whether the governors’ version would be released before the vote.
“We’re going to come up with an answer as to what our position will be,” Christie told reporters today in Elizabeth. “If we announce an agreement between the two of us about what we’d like done, I have a decent degree of confidence that the Port Authority commissioners would probably vote for it.”
Christie, a 48-year-old Republican, and Cuomo, a 53-year-old Democrat, will share oversight of the agency and can veto any increase. Each governor appoints six of its 12 commissioners. Josh Vlasto, a spokesman for Cuomo, didn’t immediately respond to an e-mail request for comment.
Call for Audit
The two governors are expected to back a $1.50 toll increase for E-ZPass users, bringing the peak-time fee to $9.50, the Record newspaper in West Paterson, New Jersey, reported, citing an unidentified person familiar with the plan. Drivers paying cash would pay an additional 50 cents and may see another increase in four years. Riders on PATH trains would see one-way fares rise to $2 from the current $1.75, the newspaper reported.
As part of the deal, Cuomo and Christie will call for an audit of the agency’s finances, the Record reported.
On Aug. 5, the Port Authority’s proposed to boost the cash toll for the George Washington Bridge, Lincoln and Holland tunnels, and three bridges connecting New Jersey to Staten Island to $15 from $8 next month. Drivers using the electronic E-ZPass device would see peak-hour tolls into Manhattan go to $12 from $8.
The agency, which doesn’t receive tax revenue and relies mostly on tolls and transit fares, needs the money to fund a 10-year, $30 billion capital program and to help rebuild the World Trade Center, Executive Director Chris Ward said in an Aug. 15 statement.
‘Slow or Stop’
“Without this increase now, construction of the World Trade Center site could slow or stop,” said Ward, whose $7.2 billion budget for 2011 holds operating expenses flat for a third consecutive year and contains $3.9 billion in capital spending. The projects generate 167,000 jobs and $9.7 billion in wages, he said.
More than half of U.S. public transit agencies surveyed in March said they may increase fares or trim service this year amid budget deficits and a threatened loss of federal funding, according to a report this week by the American Public Transportation Association. Fifty-one percent of agencies already implemented such cost savings measures this year, the Washington-based trade group for mass-transit operators said.
In a joint statement following the release of the Port Authority’s proposal, Cuomo and Christie said agency officials were concerned about a potential credit downgrade if toll increases aren’t instituted.
A downgrade may “pose a potentially disastrous result on a transportation network that millions of residents of the states of New Jersey and New York rely on and would be unacceptable,” they said.
An AA- rated Port Authority tax-exempt revenue bond issued in July 2010 and maturing July 2040 traded Aug. 18 with an average yield of 4.29 percent, about 42 basis points above an index of top-rated 30-year tax-exempt bonds. That compares to Jan. 19, when the bonds traded with an average yield of 5.92 percent, the high for 2011, which was 92 basis points above that day’s index of top-rated 30-year tax-exempt bonds. A basis point is 0.01 percentage point.
The AA- rating from Standard & Poor’s and Fitch Ratings, their third highest, is one level below Moody’s Investors Service’s grade of Aa2.
New York Comptroller Thomas DiNapoli released an audit of the agency this week showing it had paid $85.7 million in overtime last year to 5,360 of its 6,977 employees. Employees of the Port Authority Trans Hudson railway, or PATH, and public-safety workers made up the majority of those receiving overtime, according to the report.
“Before the Port Authority asks for more money to fund its operations, the agency should take a long, hard look at whether its business model for managing overtime really makes sense,” DiNapoli said in a statement. “Overtime flows like water at the Port Authority and management has no clear strategy to achieve its own benchmarks and goals for curbing costs.”
The proposed toll increases would boost agency revenue by about $240 million from September through year-end, and $720 million a year starting in 2012, according to the agency. An additional $2 increase in 2014 would add another $290 million a year, raising the total annual gain from the increase to more than $1 billion.
The authority oversees the region’s airport system, marine terminals and ports, PATH rail transit, six tunnels and bridges between New York and New Jersey, the Port Authority Bus Terminal and the World Trade Center.
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