Save Our Turnpike In The News

BY DEBORAH HOWLETT AND JOE DONOHUE

Star-Ledger Staff

Gov. Jon Corzine's grand plan to solve the state's lingering financial crisis by selling the Turnpike and other toll roads to a public corporation has been put on hold until after the November election.

Corzine is concerned that introducing a controversial and complicated "asset monetization" plan in the weeks before a legislative election might foul the political waters for Democratic candidates and jeopardize passage of the plan by the Legislature, administration officials said.

There is also concern, they said, that because the governor has not fully recuperated from his near fatal April 12 accident he wouldn't be able to withstand the rigors of a statewide campaign this summer to sell the plan to citizens.

Corzine signaled the move earlier this week, when he told reporters that complicated federal legal and tax issues have delayed the announcement of a plan and that his administration is still wrestling with details of a tentative plan.

The governor and his top aides are now convinced that those issues cannot be resolved anytime soon, Treasurer Bradley Abelow said, and any unveiling of the details of the plan has to be delayed.

"It's exquisitely complicated. It's something that has never been done before," Abelow said in an interview yesterday. "Before we can take it public we have to have a plan that we can explain to people. That could take weeks or months."

By then, however, the election season will be at hand. The administration must then deal with the political fallout that launching such a plan could generate, according to two sources who were involved in the discussion.

Some in the Democratic administration are concerned that at that point, Republicans would criticize the proposal as a gimmick to raise tolls and push Democrats to renounce the idea before it was fully vetted by the public.

Corzine in his budget address earlier this year said he would present a plan that would allow him to sell or lease the state's toll roads, perhaps to a private company.

The multibillion-dollar windfall from that sale would be used, the governor said, to pay down state debt, catch up on the backlog of road work across the state and still have money left for capital expenditures like open space preservation and stem cell research.

As Corzine and his advisers looked at the plan, however, they gradually became less enamored of selling or leasing the Turnpike and other state "assets" to private corporations.

Corzine instead is leaning toward creating a "public benefit corporation," a not-for-profit company that would operate for the benefit of taxpayers rather than shareholders. Unlike a private corporation, however, the public benefit corporation could generate revenue by issuing tax-free bonds. It could also mean abolishing the current Turnpike Authority, Abelow said.

The Canadian rail system is an example of a corporation run by a board of directors for the benefit of the public, Corzine said. In the United States, the Corporation for Public Broadcasting and U.S. Postal Service are run in a similar way. Indeed, by definition, the Turnpike Authority is a type of public benefit corporation.

But what Corzine envisions goes even further, Abelow said, and must be carefully vetted, not only through the Internal Revenue Service but also through the financial community at large before it is presented to lawmakers and the general public.

"This is huge," Abelow said. "We have to get this right. ... You don't get two bites at this."

Four top Democrats in separate interviews said that they strongly advised Corzine to wait until after the election to unveil his plan.

One Democratic lawmaker who asked not to be named because the politics are sensitive explained that Corzine's accident threw off his timetable. The accident prevented him from making the kind of statewide push that would have built public support during the spring before the election campaigns heated up.

"Whatever chance he had of doing this in an earlier time frame passed when he had the accident." said the lawmaker. "This requires as much work as the budget. It's going to require a lot of effort."

Because of the plan's complexity, he said the governor will have to reassure not only the general public but also major Democratic constituencies like unionized Turnpike, construction and state workers. And many New Jerseyans have a cultural connection to the Turnpike and Parkway, so much so that the exit numbers nearest their towns become part of their identity.

"Under the best-case scenario, it's a very difficult political issue," the lawmaker said.

Republicans also see vulnerability for the Democrats on the issue, and have some evidence to prove it. A survey of 400 likely voters taken June 10 and 11 for state Republicans found strong opposition even when the asset plan is described in the most benign terms.

In the survey, which had a margin of error of plus or minus 4.9 percent, voters were asked the following question: "Do you agree or disagree with the following statement regarding Jon Corzine's proposal to monetize the state toll roads: This is actually a very innovative idea that will help New Jersey taxpayers because it will raise more money for tax relief and debt reduction to get the state's finances back in order without raising taxes."

The response: Voters disagreed by a 51 percent to 23 percent margin, with 26 percent uncertain. Even among Democrats, the margin was 46 to 25 percent.

"Support for selling New Jersey's state toll roads is low, and lack of approval for this proposal transcends party lines," said a memo on the survey by McLaughlin & Associates, the polling firm.

While Democrats may be vulnerable on the issue, Senate Minority Leader Leonard Lance (R-Hunterdon) said the public deserves to know the details of Corzine's plan before the fall elections.

"Every seat in the Legislature is being contested and the public needs to know where candidates for the Legislature stand on this critical issue," he said. "I think this clearly ought to be a major issue in the autumn campaign. I believe that this has the potential of being yet another form of borrowing without voter approval."

It's not just Republicans who oppose the idea.

Three counties and 15 towns have passed resolutions opposing any sale or lease of the Turnpike or toll roads.

The New Jersey Public Interest Research Group is also circulating an online petition asking Corzine to abide by certain standards in devising his plan, include a 30-year limit on any deal, full public control and full transparency.

"Regardless of when his full plan is unveiled, the governor should be making specific commitments to protect New Jerseyans," Abigail Field, the group's spokeswoman said. "The public still believes monetization means privatization."

Staff writer Josh Margolin contributed to this report.