NEW JERSEYANS’ TURNPIKE—The New Jersey Turnpike and the Garden State Parkway are vital public assets that must be managed in the public’s interest. “Monetization” deals done in Indiana and Chicago, if mimicked here, would prevent sound transportation policy and give windfall profits to investors. Any proposed deal must be scrutinized fiercely to protect the public interest.

NJPIRG Works To Protect Roads from Unprincipled “Monetization”

What’s your exit on the Turnpike? On the Parkway? If you’re like most New Jerseyans, you have an answer to one or both of those questions, because our toll roads are an integral part of our lives. From the day they opened, these vital routes have been managed in the interests of their drivers. That may change soon.

Facing a budget constrained by debt, a Transportation Trust Fund nearing bankruptcy, and a host of other pressing budget problems, the governor has made clear that he wants to “monetize” our toll roads, perhaps leasing them to a private company. Concerned that a privatization deal would sacrifice New Jerseyans’ long term interests for immediate gain, NJPIRG looked at recent deals in California, Colorado, Indiana and Chicago. Troublingly, our concerns grew.

Some of the deals limited what could be done to improve alternatives to the privatized toll road. These “non-compete” clauses, if applied in New Jersey, could cripple our transportation network. After all, what competes with our toll roads—routes 1 and 9? I295?

The deals were also troubling because of their length; for example, Indiana’s lease lasts 75 years, Chicago’s, 99. Impossible-to-anticipate changes happen over such timeframes, making effective lease negotiation impossible. For example, Henry Ford introduced the Model T 99 years ago; the first segment of our Turnpike opened 55 years ago.

The timeframe problem is compounded by the tension between the public interest and maximizing private profit. Shortly after a private company took over the Indiana Toll Road, it installed barriers in the turnarounds to prevent people from avoiding tolls. Emergency personnel, however, use those turnarounds to reach accident sites, and were suddenly blocked. The lease didn’t forbid the barriers because the issue didn’t occur to the state’s negotiators. In response to public outcry, the company agreed to modify the barriers. Nonetheless, the problem remains: what else, over the next 75 years, will Indiana discover it failed to anticipate?

Another problem is the loss of public control. Who decides how a privatized road fits into New Jersey’s transportation master plan? As paving and snow-removing technologies improve, who decides what the right safety standard is for New Jersey?

Concerned that plans to do a deal were moving swiftly behind the scenes, NJPIRG organized a press conference and raised our concerns. Since that press conference, much of the debate has taken place in public, and we have continued making our case, meeting with legislators, the Treasurer and the governor’s staff, other concerned organizations and the media.

Recently, when the governor has spoken about “monetizing” our roads, he has promised to reject a deal unless it protects the public. Unfortunately, he has never said what that means. Because our research shows that a public interest deal is much less profitable for private investors, we believe the governor must be clearer.

In the coming months we will publicly call on the governor to take a public interest pledge and commit to rejecting any deal that doesn’t address all of the fundamental problems with privatization.