Asset Monetization 
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Wed Oct 01, 2008 at 03:46:37 PM EDT
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Following an LA Times piece on Hank Paulson's mistakes in marketing his bailout plan, Matthew Yglesias reflects on the situation:
Instead, well, we got what we got - a poorly designed initial plan that was unacceptable to congressional leaders from both parties, silence from non-governmental actors, and a rising public backlash against a mysterious and seemingly under-motivated plan.
I couldn't help but think this reminded me of Governor Jon Corzine's mistakes, particularly the asset monetization scheme, and it reminds that they have similar Wall Street backgrounds. Back in 1998, Paulson stabbed Corzine in the back to become Goldman Sachs' CEO. It seems Wall Street leadership is not well suited for crisis situations in politics.
So I ask our readers, am I on the right track here to understand Corzine's weaknesses?
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Tue Aug 19, 2008 at 10:02:03 AM EDT
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At a time when Jon Corzine is getting pretty beat up in the court of public opinion, some very good news about his policies received little notice last week, and this news seems to validate Corzine's economic policies to some extent. Wall Street just gave the governor some very welcome news ,about his policies.
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Sun Mar 02, 2008 at 01:10:24 PM EST
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In the Bergen Record today, Charles Stile has a brief anecdote about a pitch of his Asset Monetization plan the Governor was making on Friday with the subheading: Lighting strikes twiceNew Jerseyans mostly have taken a dim view of Governor Corzine's toll hike/debt reduction plan, polls show. Maybe all that discontent had something to do with the lights going out -- twice -- on Friday while Corzine addressed 500 lobbyists and government contractors in Trenton.
Ten minutes into his remarks in the Marriott ballroom, the overhead chandeliers and two projection screens flickered and went dark. The state troopers who protect the governor made for the stage. Seconds later, the power was back, Corzine resumed his address and the troopers appeared to relax. Then, once more, lights off, troopers on their toes, lights on. I don't think thats exactly the start and the sign Corzine was looking for as he looks to resume pitching his toll plan.
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Tue Feb 12, 2008 at 11:52:13 PM EST
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Governor Corzine's plan to use toll hikes to pay down the State debt has come under heavy fire in recent days. A few weeks ago, it looked more likely to pass than not, with many Democrats in the Legislature expressing support and the endorsement of the pro-business Chambers of Commerce. However, this past week, all 17 Republican State Senators and all 32 Republican Assemblymen signaled that they would oppose the plan. Since the Democrats have a majority in both Legislative houses, the Republican opposition was not a deal-breaker. However, State Senator John Adler, a prominent Democrat who is running for Congress, announced his opposition, as well. In addition, a group of environmental and transportation groups declared their rejection of the Governor's plan as long as it continues to include widening some major roadways. Suddenly, the asset monetization plan looks dead on arrival.
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Mon Feb 11, 2008 at 01:24:49 PM EST
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As we all know by now, the state faces tens of billions of dollars in debt and other unfunded obligations. Governor Corzine has been up-front about this harsh reality and proposed a plan - albeit an unfair one - to try to solve the fiscal crisis. So, given the magnitude of the problem, it's unfortunate that Republicans are choosing to score political points instead of offering solutions.
Recently, three of the Republicans vying for the chance to challenge Assemblywoman Linda Stender in the NJ-7 congressional race tried to score points on the issue. But they're apparently not up on their facts.
Kate Whitman kicked off her campaign with an email asking Linda Stender: "Why Haven't You Denounced the Governor's Toll Increase Plan?"
On February 8th, State Senator Leonard Lance demanded that Stender denounce Corzine's plan: "I am calling on Linda Stender to oppose Gov. Corzine's massive tax and spend plan..." And in a press release issued the same day, another candidate, Dr. P. Kelly Hatfield, "questioned why Assemblywoman Linda Stender, has been mum on the Governor's plan to raise tolls on NJ roadways.":"Other high ranking Democrats have either spoken out for or against the plan or have admitted to reviewing it but Stender has yet to even acknowledge the plan's existence."  In fact, Assemblywoman Stender has been clear on her position for weeks - before any of her potential challengers decided to make political hay of the issue.
We obtained a letter that Stender sent to a constituent concerned about the toll plan on January 18, 2008. In the letter, Stender clearly states that "I am opposed to Governor Corzine's plan."
(Click the image to the right for a larger version of the letter.)
The letter reads in part: Thank you for contacting my office to express your opposition to Governor Jon S. Corzine's financial restructuring and debt reduction plan, which includes significant increases in tolls along a few of New Jersey's most heavily traveled roads.
Please be assured that I am opposed to Governor Corzine's plan. While I agree that efforts to reduce our state debt and ending the practice of spending beyond our means must be made, I do not believe Governor Corzine's plan is a realistic or just approach to solving New Jersey's financial challenges. It is unreasonable to penalize residents and businesses that rely on thoroughfares such as the New Jersey Turnpike and Garden State Parkway for commuting to and from work or for facilitation of business needs in order to correct decades of overspending. A solution to our budgetary problems must instead focus on cuts in spending while preserving assets that have a history of benefiting the residents of this state. So while these three Republican contenders were trying to land political punches, Assemblywoman Stender was doing something far more important -- serving her constituents. She, too, could have scored points by touting her opposition to the plan in the media. It's likely as unpopular with the voters of the seventh as it with voters in the rest of the state. But she decided not to go that route, sharing her views with those she represents.
Politics and policy making are getting scrambled together on this issue, from dueling press releases from campaigns at all levels, to radio stations trying to up their listenership with Statehouse stunts. But our state's finances are a matter of serious concern. Even if the NJ-7 Republicans were simply mistaken, rather than lying, they clearly now owe it to the Assemblywoman to correct the record and share the truth with their supporters. I won't be holding my breath.
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Sun Feb 10, 2008 at 05:57:09 PM EST
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Tom Feeney at the Star Ledger reports:Gov. Jon Corzine told a Middlesex County audience today that he no longer expects tolls on Route 440 to be part of his financial restructuring plan.
"I don't think we will be moving forward with that aspect," he said, prompting applause from a crowd of about 500 people. [...]
His proposal includes a 35 cent toll on Route 440 in Middlesex. The idea to put tolls on Route 440 has been harshly criticized by state legislators from Middlesex County.
"I'm a practical guy. It's not happening. It's not worth a lot of conversation," Corzine said in response to a reporter's question.
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Sat Feb 09, 2008 at 01:55:14 AM EST
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( - promoted by Rosi Efthim)
The title of David Chen's piece in the New York Times this weekend says it all: "Tolls Plan Is Dead Unless Revised, Corzine Is Notified by Opponents."Gov. Jon S. Corzine's plan to sharply raise tolls is all but dead, according to influential Democrats and every Republican state legislator, who have warned that he has to modify his plan substantially if he expects to win their support. [...]
"The governor has tried to do a lot, and in politics that's tough to do," said State Senator Raymond J. Lesniak, a Union County Democrat. "But we have to scale back the governor's plan a little bit."
When asked Thursday night after a town hall meeting in Atlantic County about possible alternatives, Mr. Corzine said: "I haven't settled on any alternative, but I'm listening to people, and I'll try to come up with a proposal that actually can get 21 and 41. I've always said this would be a heavy lift to do it just exactly like I said it. So we have to make sure that we solve our problems, and many people want some other solutions." [...] According to Mr. Lesniak and aides to Mr. Corzine, it is unlikely that the governor will offer any specific changes to his plan before he presents an austere budget for the next fiscal year on Feb. 26, which is expected to include more than $2 billion in cuts.
Mr. Corzine has already warned that just about every sector - education, the arts, hospitals, municipalities - will be squeezed by the budget, which will freeze state spending at last year's level of $33.5 billion. I don't think there is any way our legislature can fix this. The political will is not there. The entire Republican caucus is playing politics and Senator Adler and Assemblywoman Stender - who are running for Congress - know that they'll be attacked if they support the plan. It doesn't even matter what the plan is - the Republicans have made it obvious that they're going to use our state's dire fiscal situation to score political points.
 Corzine's plan is well-intentioned but fundamentally unfair. It's asking only toll-payers to bail out the entire state. A more fair solution could involve raising tolls a little, increasing the gas tax, extending the sales tax to services, and increasing the income tax in addition to cutting spending and saving money through consolidating services. Hundreds of pigs will fly around the statehouse before that happens.
Solving the fiscal mess in a more equitable manner is even more difficult than doing it just through toll increases. The campaign attack ads will accuse lawmakers of increasing X different taxes instead of just one. Thanks to gerrymandering, many will be immune from those attacks, but not enough.
The problem is so big that it dwarfs the political will to solve it. The only realistic chance at actually addressing these problems is through a Constitutional Convention. Governor Corzine has the right intentions, and he knew this would be a tough sell, but it's time to admit that our fiscal situation is so bad and will require so much sacrifice that it will be impossible to fix legislatively.
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Mon Jan 21, 2008 at 12:00:21 PM EST
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Something about the plan to fix New Jersey's budget problems seemed familiar to me. Wh said that a one-time debt issue would fix problems caused by borrowing operating expenses year after year? For course, it was Californias Arnold Schwarzenegger:
The $15 billion bond approved by voters in March of that year [2004] to pay down California's persistent gap between spending commitments and revenue collections was the same kind of consolidation, Schwarzenegger said.
"We tore up the credit card," Schwarzenegger said. "Never again will government be allowed to spend money it doesn't have. Never again will the state be allowed to borrow money to pay for its operating expenses."
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Wed Jan 09, 2008 at 10:48:22 PM EST
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Governor Corzine announced today that he chose former Congressman Bob Franks to chair a campaign to push his "Financial Restructuring and Debt Reduction" plan."You may ask how a fiscally conservative Republican like myself could find common ground with a liberal Democrat like Jon Corzine," said Franks. "The answer is simply that the governor has broken with tradition in Trenton and declared that we have to transform the way we handle the state's finances. My grandfather taught me a long time ago that when you find yourself in a deep hole, the first rule is to stop digging."
"The financial restructuring and debt reduction initiative put forward by Governor Corzine has, at its core, the reforms necessary for New Jersey to get back on the right fiscal track," said Franks. "These long overdue, common sense reforms should not be held prisoner to partisanship" Amen.
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Tue Jan 08, 2008 at 03:15:22 PM EST
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Corzine's State of the State address is scheduled for 3pm. If you're watching, share your thoughts in the comments. It's being broadcast on NJN and News 12.
"Too many office holders have betrayed the public trust...Today the public is frustrated." Corzine points out the depressingly low voter participation rate in the last election.
We need to change the "credit card culture" of this state's finances.
"Number one issue facing our state is fixing our financial foundation."
Corzine says we should enact family leave insurance, more affordable housing, and ban pay-to-play at all levels of government. (hey, that sounds like what Codey/Roberts said we should do last week)
"Talking about our state's finances is a little like watching the move Groundhog Day."
Every man, woman and child personally owes $3,700 of state's debt. First $860 in state taxes go towards interest and debt payments.
Just acknowledged the Congressional delegation.
4 elements to plan:
1. Freeze state spending at current level for next fiscal year. Must find $2-2.5 billion in budget cuts. Adjustments will be painful, but will pay the way to long term stability. Seeks advice from bipartisan group of legislators.
2. Incremental spending levels in future budgets can't exceed recurring revenue. Ends one-time spending gimmicks. Any non-recurring revenues in the future will be used exclusively to pay down debt, trust fund, or pay unfunded health care costs.
3. Pay down 50% of state debt from toll revenue and fund transportation trust fund. (Super secret)
4. All debt without dedicated revenue source must be approved by voters. Public has told us they don't trust our judgement (as already required by the Constitution). Stem cell research and open space ballot initiatives were a wake up call. Proposes constitutional amendment for voter-approved borrowing.
More details on asset monetization plan...
Pay back $16 billon in debt. Save $1 billion in annual debt payments. Cut structural deficit by 1/3.
10,000 miles of highways need to be resurfaced over next 10 years. 700 deficient bridges need repair. Need to expand mass transit. (light rail in Gloucester, Bergen). Widen AC Expressway, Turnpike, Parkway. State needs $3 billion by this summer to move forward with Hudson tunnel, or risk losing matching federal fund. Need $40 billion over 10 years to fix, expand roads/transit system.
"My plan involves significant toll hikes....Equally on all users."
First increase in 2010 of 50%.Three future increases of up to 50% every four years for next 12 years.
By comparison, to fix only toll road bridges and widen turnpike would require at least a 45% increase in toll, or a 12 cent hike in gas tax.
Or 20% income tax increase or 30% sales tax increase...
To achieve by budget cuts alone, would require annual recurring $2.5 billion in budget cuts.
"Pigs will fly over the state house" before there are any realistic tax hikes or spending cuts to fix the budget mess.
Will have 21 town hall meetings in 21 counties.
Turnpike, Parkway, AC Expressway, Rt 440.
Roadways will not be sold, leased or anything else to for-profit or foreign operator. Will be owned by State of NJ. Public benefit corporation (PBC) will manage roadways. Will have own independent non-political board of directors.
Future financial benefits from roadway stays exclusively in NJ for benefit of NJ residents.
"Culture that created one of the nation's highest tax burdens must end."
Will debate over 2 months, but must come to judgement by the middle of March in order to move forward next fiscal year.
"If there's a better plan...put it on the table..... It's not something I want to do...its something we have to do."
It's over.
My thoughts...he was very rational. I like that his plan addresses all the problems facing the state, not just the huge deficit. Paying off the debt only to get back into debt in the future would put us in a worse position than we are now. Requiring future expenses to be matched by recurring revenue is critical if this plan is to go forward without us again falling back into debt. This is going to be a very hard sell, but ultimately, the alternative - to continue the status quo - is not an option.
Sen Tom Kean Jr: "I've got great concerns." "It's paying off the VISA card with an American Express." Says we need spending cuts. He wasn't asked where he's going to cut $2.5 billion/year every year.
Alex DeCroce: Doesn't like the plan either. Corzine won't accept budget cuts we proposed. We could have had $800 million more for property tax relief. HAHAHAHA.
More Kean Jr: Zero-based budgeting. Identify spending cuts. He's a broken record. Wahhh. We didn't get a copy of the speech in advance. Someone call the Wahhhmbulance!
DeCroce: Agree with cutting debt in half, but we should go to voters first and ask if they agree.
More thoughts: I'm not too hopeful about this right now. Corzine went out of his way to present an honest assessment of the situation but DeCroce and especially Kean Jr immediately commenced with grandstanding. If the budget problem isn't fixed, it won't be because Corzine didn't try. It will be because of folks like Kean Jr and anyone else who tries to score political points at the expense of our state's future. I hope the Democratic caucus takes this as seriously as Corzine is. The time for half-measures passed long, long ago.
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Wed Nov 28, 2007 at 11:47:32 PM EST
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The current motor fuels tax is 10.5 cents per gallon of gasoline and 13.5 cents per gallon for diesel. This tax brings in $553 million a year of which $483 million is Constitutionally dedicated to the Transportation Trust Fund and $45 million to New Jersey Transit. It would appear that an additional $25 million of diesel tax revenue also goes to the TTF for a total of $508 million.
Assemblyman Wisniewski, the Chair of the Transportation Committee, has made a proposal to double the gas tax instead of tolls. Transportation Commissioner Kris Kolluri has said that to pay for the transportation needs of New Jersey that the gas tax would have to increase to $58.5 cents. Wisniewski has responded with the logical statement that if the Commissioner could specify an amount that the gas tax would have to increase, then the Commissioner
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Tue Nov 27, 2007 at 05:48:56 PM EST
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New Jersey has $32 billion in debt and over a $3 billion structural budget deficit. There are no honest, pain-free ways to close the deficit, but New Jersey lawmakers have never shied away from shrugging off that responsibility through budget gimmicks. That's exactly how we got to where we are today, and for a while it looked like Governor Corzine might be on track to follow in that irresponsible tradition. For months he touted his asset monetization plan as a way to fund all kinds of worthy projects for which there is no money:Among the goodies Corzine had said his proposal might free up money for _ preschool and full-day kindergarten for everyone, new schools, expanded state college facilities, tuition aid, environmental cleanups, preserved open space, universal health care and affordable housing. But last month voters who overwhelmingly support stem cell research voted down a ballot question that would have borrowed $450 million to fund the research over 10 years. The message to lawmakers was clear: get your fiscal house in order first. Luckily it seems Corzine got that message:"I think it would be very hard to justify new programs...I think we've moved away from the view of anything other than pay down debt and the Transportation Trust Fund." Assembly Speaker Joe Roberts agrees:"Every single dollar needs to be used to pay down debt." And Senate President Codey seems to be going along with the plan because he has no better ideas:"The governor is doing what he has to do, frankly, to bail us out...We all have an obligation to either say yes or to come up with a better plan, and at this point I don't have a better plan." That's a pretty honest assessment of the situation. Maybe too honest.
Corzine's plan to pay down half the state's debt is estimated to reduce interest payments by around $1.5 billion per year, which would help significantly close the structural deficit. Some have criticized the plan by pointing out that it's simply borrowing money to pay off debts. Like filling up a hole with dirt dug out of another hole. There's some truth to that, but the benefits could be greater than the sum of the parts.
With the state's fiscal health improving, Wall Street should be willing to lend the state money at a lower interest rate. In 2004, for example, some state-issued bonds were issued a rating just "two grades above junk bond status." Wall Street had low trust in our state's fiscal health and charged us a higher interest rate to borrow money. But by slashing our debt and implementing some stronger ethics reform measures, Corzine may be banking on the fact that Wall Street will have more faith in our state's fiscal situation, and lend us money at a lower interest rate.
So not only would we save the interest payments by paying off some of our debt, but we should save money on the interest payments from any future bonds issued. Ideally, the savings should further close the structural deficit and speed up the path to fiscal sanity.
But we don't live in the land of chocolate lakes, rainbows and unicorns where things happen the way they're supposed to. In Trenton, good ideas often turn into bad ideas on their way to being signed into law. To win support, it's likely and probable that individual legislators will want something in return, and that translates into more debt, negating or lessening the benefits of the proposed fiscal reform. So while I haven't seen the details of Corzine's plan, I theoretically support the plan because it could put us on the right path to fiscal sanity. But the cynic and realist in me thinks the final product won't be worth it. I hope I'm wrong.
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Thu Nov 15, 2007 at 02:47:49 PM EST
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( - promoted by Juan Melli)
At the League of Municipalities convention this afternoon, governor Corzine announced that he intends to slash the state's $32 billion debt in half by borrowing against future toll revenues:"I'm not looking to play at the margins, or do something that feels good...Make no mistake, I am willing to risk losing my job if that's necessary to set our fiscal house in order."
Corzine provided the newest details of what he facetiously called "my secret asset monetization plan" to a packed house. The crowd greeted the governor with enthusiastic applause when he entered the cavernous hall. The reception to his remarks was just as enthusiastic, especially his call to cut the state's debt in half. Bold words, though I'm becoming more convinced that he's not even planning on running again in 2009.
Cutting the state's debt in half could save about $1.5 billion in yearly interest payments which would help close our over $3 billion structural deficit. I'm very skeptical of any asset monetization plan, but I'm open to the idea of using the funds exclusively to help close our structural deficit in a fiscally sound manner.
Corzine has in the past said that the revenue from such a deal could be used partly to fund spending projects, but so far news reports of today's speech don't have any mention of that. If that's the case, then maybe Corzine got the message on election day that we're tired of the gimmicks and borrowing just to keep us afloat for a few more years, only to make the situation worse. I'm keeping an open mind about this, but I can't help but be extremely skeptical.
Update: Senate Republican Leader Leonard Lance and I are on the same page (press statement): All monies realized from any monetization proposal should be used to pay down state debt. If any new programs are funded from the proceeds of monetization, they must receive voter approval. This is essential if we are ever going to return to fiscal sanity in this state.
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Sun Jul 29, 2007 at 10:59:11 AM EDT
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Ah the truth finally comes out. The Republicans aren't opposed to the idea of "Asset Monetization", they are opposed to the idea of a Democrat suggesting the concept...An obscure state law passed when Republicans controlled the State Legislature in 1999 includes passages that could have been lifted from the script Corzine is using today to promote "asset monetization."
"In this era of limited sources of state and local revenues ... the need exists to maximize the value of their assets," the preamble to the 1999 Structured Financing Act states. "One possible way of maxi mizing such value is to utilize new and innovative financing structures which take advantage of the exist ing assets."
The bill defines structured finance agreements as arrangements in which the state gets money in re turn for "all or a portion of its interest in state assets," although it prohibits the outright sale of any state asset to a private investor.
And it defines as "assets" the same things Corzine has said he is considering monetizing, such as land, buildings, highways, development rights and air rights. So looking at the mileage the Republicans and their candidates have tried to get from this issue, one would assume the bill went down in flames and never had a chance, right? You would be wrong if you assumed that because the bill passed 68-7 with unanimous Republican support. Ah but Diane Allen continues to fight reality and try to capitalize on this issue..."This is totally different than anything we're talking about now," said Allen, who has called Corzine's proposal "the biggest fiscal gim mick" in state history. "This bill had nothing to do with selling money-producing assets." Totally different? You mean like she is seeking all the facts to rout out all state corruption on both sides of the aisle too? And Leonard Lance continues his tryout for tapdancing w/ the stars as well..."This (1999 strategy) was really a paper transaction, and did not re quire the state to transfer control of an asset." A paper transaction? Thats a new defense. I'm sure thats exactly what they were saying in '99 if I go back and check the session minutes. Senator Lesniak nails it once again with his comment on the Republicans trying to have it both ways..."It just shows the hypocrisy of it," Lesniak said. "I think the Republicans just need to chill out and find another issue." Are they really gonna run on this issue? As a talking point, all you have to say is that the R's supported it in '99. It's short and simple. I'll be interested to see how this plays.
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Wed Jul 11, 2007 at 03:47:40 PM EDT
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New Jersey Republicans know they can't beat Democrats on the issues, so in 2007, they will try to run against straw men instead.
Last Month, Republican State Senator Nick "Straw Man" Asselta attacked Democratic Assemblymen Jeff Van Drew and Nelson Albano for voting against an amendment that would prohibit Governor Corzine from studying asset monetization. Van Drew and Albano actually voted for the amendment.
Less than three weeks later, "Straw Man" Asselta is at it again. Three times in the last two days, his campaign has attacked Van Drew and Albano in press releases claiming that the Assemblymen want to sell New Jersey's toll roads. Asselta reasons that a vote for a budget is a vote for monetization--as if he's never voted for a bill containing a provision or two he didn't like.
Asselta has a real problem. He's running against the most active, hardest-working legislator in the state, and if his press releases are any indication, he's a single-issue candidate without any policy ideas of his own. To attack his opponent on an issue on which they both essentially agree is a sign of desperation, not a sign of strength.
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Mon Jul 09, 2007 at 06:27:49 PM EDT
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Diane Allen held a photo op, er press conference yesterday along side the turnpike to rail against the monetization plan which doesn't exist yet. Senator Ray Lesniak took the opportunity to respond to her show today... "I promise to discuss any ideas they come up with on their merits," Lesniak said. "Otherwise, can we all take a chill pill on a hot summer day?" While it is pretty hot outside today, I've never heard an elected official tell another elected official to take a chill pill before. Guess there's a 1st time for everything. Something tells me this is just the start of the fun rhetoric on this issue.
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Wed Jul 04, 2007 at 05:20:07 PM EDT
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Although he has not yet formulated a proposal regarding the State's toll roads, Governor Corzine's recent announcement that he would not sell or lease them to a for-profit company or a foreign operator is a wise one. Residents of New Jersey generally opposed the sale or lease of the State's toll roads and the Governor's initial plans to study the issue raised Republican opposition. Given the beating Republicans have taken at the polls in recent elections in New Jersey, that Party views the sale or lease of the State's toll roads as an issue that could resonate with voters and cause them to seriously consider voting for change in Trenton this November. Corzine's announcement helps to blunt the impact of the Republican's use of this wedge issue. If the sale or lease of our toll roads to a for-profit corporation or foreign operation were to take place, what would it mean to our residents? What problems could arise?
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Sat Feb 24, 2007 at 12:54:09 PM EST
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Bloomberg has a fascinating article on a financial disaster for New Jersey consumers. This one was called "securitization," not "monetization." But I think the lesson is that these consultants, banks, and Wall Street firms are quite happy to set up deals with the state that enrich themselves. If they don't benefit ordinary citizens, too bad. While I'll mention the details below, look at this conclusion about the loss of $201 million by PSE&G:
The full loss wasn't disclosed at the time. The prospectus for the bond sale said that $125 million of the proceeds went toward financing costs, which included underwriting fees, legal expenses and about half of the charge on the swaps. The rest is still being paid by consumers.
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Sat Feb 03, 2007 at 12:32:48 PM EST
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( - promoted by JRB)
In the Legislature's pursuit of property tax reform, we have heard a great many ideas. Some, like the need for a new school funding formula, are real winners and get the support they deserve while others are so bad that we cannot forget them quickly enough.
Unfortunately, one of the worst ideas presented during this debate has managed to survive even in the face of broad public opposition. The idea of selling the New Jersey Turnpike was a dud from the beginning, yet it refuses to die.
Any plan to sell or lease the Turnpike, the Garden State Parkway or the Atlantic City Expressway puts the people of New Jersey at risk, both economically and security-wise, and simply changes how New Jerseyans are taxed, rather than getting to the core reasons for our high property taxes.
Any attempt to sell the New Jersey Turnpike or other major highways is simply a quick fix to our current financial woes. It embraces a "live for today" mentality and jeopardizes the long-term well being of our state's residents.
The Turnpike is both literally and figuratively the backbone of New Jersey. Many of our leading industries - shipping, oil refining and tourism - rely on safe, affordable, and easily accessible roads like the Turnpike to survive.
Without our highways, the Newark-Elizabeth port complex would not be the busiest port in the Northeast and New Jersey would not serve as the major gateway between the United States and the rest of the World.
Without our highways, visitors would not have easy access to the Jersey Shore, Atlantic City and all of New Jersey's natural wonders and beauty.
Without our highways, tens of thousands of jobs and billions of dollars would be lost to New Jersey's economy.
The New Jersey Turnpike belongs to the people of New Jersey. Our money, our homes and even some of our lives went into its construction. It makes little sense to put it at risk on a scheme that has failed to show success in Indiana and Chicago.
We are at a point where the need to develop a comprehensive transportation plan has become abundantly clear. Such a plan is not only essential to our future economic security, but also our homeland security. Abdicating control of the Turnpike to a foreign company would severely hamper our ability to make the type of infrastructure improvements we need.
We need control over our highways so that the State can be sure that the Turnpike grows and adapts to meet the constantly changing needs of the people of New Jersey. There is no guarantee that these updates will be made if we hand over the reins to a foreign corporation.
In many ways, plans to sell or lease our highways sound a lot like efforts for Dubai Ports World to take over port terminals in Newark and Elizabeth. I strongly opposed that deal just as much as I oppose any plans to lease the Turnpike - because New Jersey can't afford to have its major assets controlled by a foreign company.
No amount of money is enough for us to put the nation's homeland security at risk by letting foreign companies out for a profit manage the security threats that face our highways and ports. And in those cases where the safety of our people is threatened, we must have control of our major highways so that evacuations can be conducted quickly and efficiently. This is one area in which we can never be too cautious.
In the end, my greatest concern is the impact that leasing the Turnpike will have on toll rates.
Tolls are for the most part a hidden tax that people must pay simply to get to work every day. Without a doubt that tolls will go up under any lease plan, because there is no way for a private corporation to make a profit on current toll rates. New Jersey's working families can't afford this sort of shell game.
When you really consider the possibility of selling the Turnpike, it begs one question - what is the corporation going to do to make the road profitable and what is stopping us from taking those steps to see that profit on our own?
The Turnpike is already a financial boon to the State, taking no taxpayer money to run and contributing $12 million to the Transportation Trust Fund each year.
If there are ways to make the Turnpike more efficient and more profitable, then we should implement those changes immediately. But if this is just a way to raise tolls on our highways without having to take the blame for raising tolls, then we must pass on the idea.
Governor Corzine should heed the calls of the people of New Jersey to scrap any plan to sell our roads. What might seem like a good idea at Goldman Sachs isn't always in the best interests of the public. The quest for property tax relief shouldn't lead us to make horrible decisions that our grandchildren will pay for even when they are grandparents.
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