TOLL INCREASES:NJ Turnpike to Give ET and Off-Peak Break for Cars

The proposed peak period toll increases will be 8% in 2001 for ET-users and 10% in 2003 for an 18.8% total increase (1.08 x 1.10) compared to a 5% (zero 2001 and a 5% 2003) increase for off-peak weekday rates. By our calculation that means the off-peak discount will be 11.6% for ET users and 25% less than cash customers will pay off-peak. Weekend rates rise by the same amount as peak weekday rates. The cash toll for cars will rise 40% (20% and 17%).

For trucks the Turnpike proposes a smaller break for ET use – a 16.6% increase in two installments of 8%, versus the cash increase of 27.7%. There will be no time-of-day differential for trucks.

The NJ Turnpike operates a trip toll system registering entries and exits and the current rates are indicated on a copy of a ticket (see p2) from the northern most entry (18W) to the system coming south from the Geo Washington bridge.

The Authority says that the new toll increases are equivalent to two flatrate increases of 10% in toll rates. A memo to the board from Ed Gross CEO said the variable prices should be implemented because of “the implementation of electronic toll collection and the need to encourage the use of the turnpike in off-peak hours.”

The memo continued: “The conversion of cash customers to ET customers is beneficial to the Authority and to the customers we serve. By paying tolls electronically customers will experience a reduction of toll plaza congestion, save time, wear and tear on their vehicles, reduce air pollution and reduce their fuel consumption. The Authority will reduce its operating expenses and serve more traffic without the need to expand toll plazas. Accordingly it is recommended that (we) offer a toll discount to customers paying tolls electronically. With the exception of the morning and afternoon commuter periods the road is underutilized.... Thus where feasible, it is appropriate to encourage greater use of the road in off-peak hours. Accordingly the proposed toll adjustment coupled with an off-peak pricing program is desirable.”

WSA, traffic consultants to the NJTA estimates that 68% of trips will be made by motorists with ETC following the first set of toll increases and their discount for ETC use Jan 1 2001, and 72% after the second round Jan 1, 2003.

The NJTA has announced the new toll rates – which are subject to public comment and review – as central features of a major package of measures to strengthen the financial position of the Turnpike, which has been downrated in recent years because of the failure to follow through on 1995 toll increases promised to the financial community.

Projections

Under the plan announced Dec 6, toll revenues will grow from a projected $391m in 2000 11.7% to $437m in 2001, and by nearly 10% in 2003, and by nearly 6% in 2004 to $519m. See below:

Toll Revenue Projections

1999 $369.3m — -

2000 $391.0m 5.9%

2001 $436.8m 11.7%

2002 $446.4m 2.2%

2003 $490.8m 9.9%

2004 $519.5m 5.8%

2005 $533.5m 2.7%

2006 $547.1m 2.5%

2007 $554.9m 1.4%

2008 $561.5m 1.2%

2009 $568.7m 1.3%

2010 $574.6m 1.0%

Total toll transactions are scheduled to increase from 575k/day in 1998 to 795k/day in 2010 representing an annual average increase of 2.8%. Commercial vehicle tolls are expected to rise from 74k/day to 103k/day and passenger cars from 501k/day to 693k/day. The proportion of toll revenue from commercial vehicles rises slightly.

The Turnpike has made substantial reductions in operating costs in recent years and downsized its workforce from 1900 to 1575 fulltime equiv employees (a 17% reduction). In 1998 it gained the agreement of its union IFPTE to accept weekday use of temporary toll collectors to reduce the labor force through attrition in anticipation of ETC. It reduced, but continues to have, what it calls a ‘structural operating deficit’ and debt service coverage has declined. Moreover the NJTA makes no provision in its accounts for depreciation of its roadway.

Toll increases are designed to support a restructuring and refunding of the Turnpike’s debt, and to support a capital works program of $917m over the next 5 years. The Turnpike also wants to eliminate its structural deficit, improve its credit ratings, maintain a reserve balance at $30m, and improve feeder roads to the turnpike.

The 5 year capital program consists of :

(1) NJ-92 Spur to US-1: $309m

(2) Secaucus Interchange: $215m

(3) Interchange-1 Relocation: $40m

(4) Bridge Improvements: $140m

(5) Service/Truck Area Improvements: $50m

(6) New/ Relocated Interchanges: $60m

(7) Southern Widening/Interchange: $20m

(8) Sound Barriers: $20m

(9) Environmental Projects: $15m

(10) Building Facilities Improvements: $8m

(11) Misc Operational/Safety

Improvements: $40m

(Contact www.state.nj.us/turnpike)