Turnpike Numbers

by: Hopeful

Sat Mar 03, 2007 at 10:55:13 AM EST

The AP has a story saying that rather than selling or leasing the turnpike, New Jersey could instead borrow against the toll revenue. (This sounds like what was done with tobacco settlement money in many states.) I'll think about how borrowing money is supposed to solve the problem of our debt. But I'm asking here for help, because I just don't understand the numbers in the article:

Here's how it would work: The state would estimate how much money in tolls would be collected along the turnpike and parkway for the next 15 years. It would then borrow that amount all at once.

This is consistent with the expert:

Humphreys estimated New Jersey could quickly get $1.2 billion by borrowing against tolls expected to be collected on the turnpike for the next 15 years, though he estimated the state would have to increase tolls a total of 15 percent during that period.

But later the article states:

Any alternative, Abelow said, must prove better than the current situation, in which the state earns $830 million annually from the turnpike and parkway, and has control of the roadway's maintenance and security.

Now, in the U.S., $1.2 billion means $1,200 million, which is nothing like 15 times $830 million. Are maintenance costs being included in Abelow's numbers? Is Humphrey's number too low? What difference does borrowing a billion dollars make? What's going on?

Hopeful :: Turnpike Numbers

Tags: Turnpike, monetization, budget, debt, (All Tags)

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Turnpike Numbers | 3 comments

Turnpike widening (0.00 / 0)

As a side note, the 'pike is going to be widened to 12 lanes between Exit 9 and Exit 6, starting in 2008 or 2009. That is going to cost a few dollars. Whoever does the work (Tpke Authority?) will also have to compensate for about 100 acres of wetland fill. [an acre is roughly the size of a football field w/o endzones]

by: John C @ Sat Mar 03, 2007 at 23:19:34 PM UTC

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"Any alternative, Abelow said, must prove better than the current situation, in which the state earns $830 million annually from the turnpike and parkway, and has control of the roadway's maintenance and security."

What's so bad about the "current situation"? It may be something worth looking at, but it's like taking out a new credit card to pay an old one.

Also by math, $1.2 billion is $370 million more than $830 million. Not 15 times.

by: 12mileseastofTrenton @ Sun Mar 04, 2007 at 14:55:21 PM UTC

I looked at the annual report (0.00 / 0)

and the $830 million is the total revenue. Most of that money is going to operating expenses and debt service.

Frank LoBiondo Record and Jon Runyan Watch

by: Hopeful @ Sun Mar 04, 2007 at 15:15:47 PM UTC