An extensive report on radio station WNYC (January 17) by Andrea Bernstein explores a number of events involving Port Authority budgets instigated by the New Jersey appointees on the Port Authority, notably Bill Baroni and David Wildstein.
The report says that the decision by New Jersey Gov. Chris Christie to kill the ARC trans-Hudson rail tunnel several years ago was not done for the reasons Christie outlined, which involved a sudden realization that the tunnel might cost New Jersey far more than budgeted. Instead, it was done to enable critical road repairs to be done with the $2 billion Port Authority contribution to ARC, notably for repairs to the Pulaski Skyway. The connection to Port Authority facilities was justified by saying that the Skyway improvements would aid traffic flow to the Lincoln and Holland Tunnels. Diverting the $2 billion allowed Gov. Christie to avoid an increase in the state gasoline tax, which the report said would be political suicide for a potential Republican presidential candidate.
Other projects using Port Authority funds include
- the raising of the Bayonne Bridge, which the report said was a condition by New Jersey to agree to World Trade Center reconstruction;
- purchase of a military terminal in Bayonne, which the report says allowed the city of Bayonne to avoid bankruptcy that would have been politically devastating to the state and its officials; and
- reconstruction of the Harrison PATH station. The report hinted that all of these projects were instrumental in securing endorsement of Gov. Christie’s re-election bid by the mayors involved.
The report also asserted that toll increases approved by the Port Authority were said to be needed for World Trade Center reconstruction, but that the real reason was the additional projects needed by New Jersey to avoid gas tax increases. Further, the report said that the scenario of the toll increases was that Gov. Christie’s representatives at the Port Authority planned the increases and the Authority announced them, Govs. Christie and Cuomo of New York then professed outrage at the size of the increases, and the Port Authority then scaled them back. The report says all of this was an orchestrated rollout, which allowed the governors to say that there were no tax increases, as tolls, they contended, are not taxes. The Port Authority increases were not confined to motorists, as PATH rapid-transit fares were also increased.
There was also reporting on past testimony in Washington by Mr. Baroni before the late Sen. Frank Lautenberg (D-NJ) regarding the toll increases. Baroni sidestepped answering Lautenberg’s questions by instead raising the fact that Lautenberg for years had a free EZ-Pass for use on Port Authority facilities, and citing the number of times the Senator had used it. Baroni also had a thick black binder he was reading from, which the WNYC report suggested was full of other “dirt” to use against Sen. Lautenberg.
Once again, it appears that Congress has no trouble subsidizing people who drive to work, but transit users? That’s another matter.
The disparity is sharply in focus these days, as the program that allows transit riders a tax benefit was slashed at the turn of the year, while benefits for drivers increased. The disparity amounts to a hidden fare increase of about $450 in 2014 for a typical transit user who earns $50,000 a year and spends $245 a month on transit, according to reporting by Mike Frassinelli in the Star-Ledger (January 6). Similar programs for both drivers and transit users allow commuters to pay for parking or transit passes with pre-tax dollars; in 2013, both could spend $245 a month on their commutes and not pay taxes on the money. The parking subsidy is permanently enshrined in law and even benefits from regular cost-of-living increases, so it will increase to $250 a month for 2014. The transit subsidy, however, had only a temporary increase from its historic level of $130 per month; Congress failed to extend it, so it reverts to the lower figure for 2014 unless Congress were to act early in the new year. Given the gridlock that infests Washington, the prospects of a change seem dubious. The parking subsidy enjoys wider support throughout the U.S., since people drive to work in most places, whereas mass transit tends to be concentrated in and around major urban areas, such as the Northeast. One of a coalition of legislators hoping to restore the transit benefit is U.S. Senator Robert Menendez (D-NJ), who remarked, “I think there is a bias not just to the Northeast per se, but to transit benefits as a whole.”
According to various media sources, the “cliff deal” tax bill passed by Congress this week increases the tax benefit available to transit commuters to $240 per month, up from $125 per month in 2012. A higher benefit has always been available for commuter parking, but in 2012 the previous parity between parking and transit was broken, and the transit benefit reduced to $125 while the parking benefit went up to $240 from $230. Now the parity has been restored, although the transit benefit is now scheduled to expire again at the end of 2013. Under the new law, the increase to $240 is retroactive to January 1, 2012, thus restoring the parity that was lacking throughout 2012. All of these plans require that the commuter’s employer participate in the program.
According to a press release from TransitCenter, Inc. (a nonprofit provider of commuter benefit programs), a provision in the 2009 federal stimulus bill increased the maximum pretax deduction that workers could apply toward monthly transit commuting costs from $120 to $230. This level is the same as that allowed for parking expenses for those who drive to work. However, the transit provision is set to expire at the end of 2010, causing the transit deduction to revert to $120; the allowable parking deduction would remain at $230. Loss of this benefit would cause a net increase in riders’ commutation costs of up to 22% (assuming the national average income tax marginal rate of 31.6%). This would put further pressure on commuter operators, who have been coping with ridership declines during the recession.
Star-Ledger journalist Tom Moran, in an interview on the Brian Lehrer Show on WNYC on November 15, said that politics factored in to Gov. Christie’s decision to cancel the ARC trans-Hudson tunnel. Moran noted that opposition to rail projects, including high-speed rail as well as commuter rail projects, are popular with conservatives, “who are in the ascendancy.” The Governor’s opposition to a gas tax increase can be traced to the same motivation, Moran said, as can be the proposals from newly elected Republican governors in several states to cancel high-speed rail projects. Moran said that the failure to build any tunnel would hurt New Jersey economically, as the existing tunnels are at capacity and “many of the new jobs in Manhattan will now go to (residents of) Westchester and Long Island, not New Jersey.” However, Moran said, the Governor’s ARC decision is “popular in New Jersey; Gov. Christie is very persuasive.” Still, “[t]urning back $3 billion (in Federal funding) is unprecedented,” he said. But $1.5 billion of the funding was actually for “congestion relief,” and that might be reallocated to other transportation projects—Moran said, “Most people say it was his plan all along.” About the $270 million already spent and that the federal government has demanded that New Jersey return, Moran said, “the lawyers are thrashing it out.”
The Lackawanna Coalition believes that a tunnel under the Hudson will be necessary, but that the ARC proposal just cancelled was an inefficient, wasteful design. The Coalition believes that all interested bodies should work together on a nonpartisan basis to plan an effective solution to regional commuter and intercity transportation needs.
From our September/October 2010 Railgram newsletter
State Senator Joseph Cryan has introduced a bill in the Legislature to raise the gasoline user fee to fund the Transportation Trust Fund (TTF). At the end of the current fiscal year next June, all of the revenue in the TTF will be used for debt service, so none will be available for transportation improvements. The current formula is 75% for highway projects and 25% for capital projects on New Jersey Transit.
Cryan’s proposal would raise the user fee on gasoline (it is not a tax) by 8¢ per gallon each year for the next 3 years. After that, an indexing formula would determine the amount of the fee to be collected. New Jersey’s user fee on motor fuels is the third lowest in the country, having reached its present level in 1988, 22 years ago. Since then, there have been 8 fare increases on New Jersey Transit, including an increase of 25% in peak-hour and oneway rail fares and 47% or more in off-peak rail fares this past May.
The Lackawanna Coalition has expressed support for the concept of an increased user fee to be levied on motor fuels, but has expressed its deep concern that such revenue will be used as collateral for further borrowing, which is what brought trouble to the TTF in the first place. At one time, the fund operated on a “pay as you go” basis.
Some members of the transit advocacy community have questioned the need for continuation of the TTF at this time, claiming that more highway construction projects are unnecessary, and that small capital investments for transit can be funded in other ways. They claim that most of the money from the TTF would go toward building NJT’s proposed deep-cavern terminal, which the state cannot afford.