Speak Out: What do you think about the possibility of the state leasing or selling the turnpike to a private company?

Jan, 29, 2007
Jeremy Quattlebaum, Staff writer
New Jersey Student Voices

Topics: Budgets, Development, Economy and Jobs, State Government, Taxes, Transportation

With a six-year-old budget deficit, a call from the voters to reduce the high property taxes, and a reluctance to cut spending on schools and other social programs, the New Jersey government is looking at a way to generate revenue without raising taxes.

One of the proposals calls for leasing or selling the New Jersey Turnpike to a private company, putting the company in charge of operation and maintenance. The company would assume all of the expenses but would also receive all of the profits generated. The public would continue to drive on the road and pay tolls as usual.


Treasurer Bradley Abelow confirmed in an Associated Press interview that the state is looking cautiously into the possibility of leasing or selling state property like the turnpike as a way to generate money. In Governor Corzine’s annual State of the State speech on January 9, 2007, he also brought up the possibility of selling state assets as ways to free up much needed money for schools and tax credits.

Selling or Leasing the Turnpike

If the state were to lease the turnpike, it would follow action taken by other states like Indiana, which signed an agreement with an Australian-Spanish company for a 75-year lease worth $3.8 billion. In the deal, the state will have an extra $3 billion to pay for transportation upgrades. In exchange, the company that leases the turnpike manages the road, pays for the maintenance and upkeep, pays all the tollbooth workers, and receives all the profits from the road. Nothing would change for residents, however, as the public would continue to drive on the turnpike and pay tolls like they do today.

According to officials, if the state were to sell the turnpike, it could get up to $20 billion for the road. The yearly payment for leasing the turnpike is dependent on the specifics of the lease such as who would employ the turnpike’s staff and the length of the lease. In December 2006, the governor announced that he had started the process of determining whether a sale or lease is feasible. Gov. Corzine emphasized in his State of the State address that the possibility of selling or leasing the turnpike is one of the issues that can solve the state’s need for money. "Of all the issues before the administration, the Legislature, and the public, this one bears the greatest potential - if not the greatest complexity - in allowing us to achieve a multitude of policy goals," Corzine said.

He continued by saying that leasing or selling the turnpike has the potential to pay off much of the state’s debt and leave more money for essential services. “The potential is that we literally restructure the state’s finances by paying down billions of dollars of debt and, in turn, free up billions of dollars of cash flow for capital investment,” Corzine said.

One of the major factors that the state is considering in a possible business arrangement is the fate of the New Jersey Department of Transportation (NJDOT) employees that staff the turnpike and work on the road. Officials have said that they would not approve a deal that results in massive layoffs or pay reductions of the former employees of NJDOT (who would be working for the turnpike’s management company). Abelow said in an Associated Press interview, “If someone comes in with a proposal that says, 'We can pay you a lot more because we're going to cut the wages in half of people working on the turnpike,' that's going to be a nonstarter.”

Legislator Raymond Lesniak drafted a proposal on January 31 that would lease the NJ Turnpike and the Garden State Parkway for 75 years for $15 billion. The proposal also restricts toll increases and protects turnpike employees. Turnpike employees would remain state employees for at least six years, protecting them from immediate layoffs.

Many legislators have already expressed their concerns over selling or leasing the turnpike. Sen. William Gormley of Atlantic County said in an Associated Press interview that he sees selling the turnpike as a quick fix that will have long-term negative consequences.

Other state legislators also say that selling the turnpike is a bad decision and should not be done as a means to generate revenue. State Senator Tom Kean of Union County said in an Associated Press interview, “I think it’s the wrong move. Simply selling to have a short-term gain is myopic.”

Turnpike workers fear that even if the state initially protects their jobs, in the long run they will be subject to lay-offs. Franceline Ehret, president of Local 194 of the International Federation of Professional and Technical Engineers – the turnpike workers union - said in a Bregen Record interview, “We would be begging for our jobs.”

What Do You Think?

Do you think the state should sell or lease the New Jersey Turnpike? What factors do you think the government should weigh more heavily in deciding if they should sell or lease the turnpike? Are there other government properties that should be looked at being sold or leased? Join the discussion and let us know!

Related Links

• Gov. John Corzine’s State of the State - Office of the Governor

 
 
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