NEW YORK:Thruway Looks at Alternative Finance

The New York State Thruway chairman Lou Tomson said Feb 15 they’d look for “alternative financing” to toll increases.

How about encouraging more Canadians on stuff like a 37 month waiting list for knee surgery to buzz down the Thruway to a hospital in Brooklyn NY where they’ll happily do the op on three days notice? The Thruway police troop could well be reduced and pose less of a threat to cigarette traders between New Jersey and Quebec. And that ‘underground railroad’ for irregular Chinese immigrants from Ontario south. Surely there must be ‘adult’ business of some kind that would make heavier use of Thruway facilities – especially the service plazas and rest areas – that would make the Thruway a more lively tourist attraction and increase traffic volumes at no expense to the Thruway.

Truly innovative solutions along these lines would involve some public-private partnerships and revenue sharing arrangements with all these entrepreneurs. All with a singleminded focus on what would help the Thruway get more revenue without increasing toll rates.

The Thruway might be eligible for a federal grant for a demonstration project in innovative finance with such ‘thinking outside the box,’ as the PR flacks at USDOT would term it.

We can’t vouch for the fact that chairman Tomson and his fellow board members have been presented with suggestions as innovative as this by the Thruway staff, but we’re sure they are leaving no stone unturned in the effort to do the bidding of the state governor, George Pataki. He told the Thruway early February he wanted every possible alternative studied to toll increases. What is a toll road supposed to do to generate more revenue if it is told to find an alternative to toll increases?

Heck here’s another one. The Thruway has great in-house expertise in coinage and metallurgy. Combine that with the a regular supply of nickels, dimes etc passing through the Thruway system, and there’s an innovative business to be had by the Thruway turning small change into crisp new ‘golden’ Sakagawea dollars that are in such hot demand. The US Mint can’t cope with the rush on the Sakagaweas. Such Thruway alchemy would surely serve the Governor’s wishes, help out the Mint, and keep Thruway patrons happy as well.

A ‘win-win-win’ proposition.

BACKGROUND: Back in January the New York State Thruway board decided on a new construction cost indexed scheme for annual adjustment of toll rates. The Board announced Jan 27 that toll rates would rise June 1, 2000, and each subsequent June 1 in line with the Construction Cost Index (CCI) for the previous year, but with tolls increasing no more than 3% in any year. Toll rates would stay constant if the CCI declined. On the trip toll or ticket parts of the Thruway toll rates for each segment would be rounded to the nearest nickel (5c). At the barrier plazas at the ends of the Thruway where they point-toll they’d round to the nearest quarter (25c) to suit the coin machines.

The CCI is computed by the ENGINEERING NEWS RECORD and is based on a 20-city weighted average of construction material and labor costs. Tolls would have increased 2.2% annually the past three years if such a CCI-linked toll plan had been in effect.

“This commonsense plan” as Thruway chairman Tomson called it was going to avoid the need for periodic “massive hikes” in toll rates while providing service providers, contractors and the Thruway with some basis on which to plan.

The “indexed toll adjustment” plan would enable the Thruway to support an addition of $1.0 billion to make a $2.6b capital plan over the next 6-years. The Thruway announced it was making an immediate start on $275m of new projects including:

• bridge rehab and 4th laning between ICs 53 and 54 (I-190) in the Buffalo area

• improvements to the North Grand Island bridge

• roadway work MP-404 to MP-417

• Stewart Airport Access road work

• improvements Spring Valley (MP-24) to Suffern (MP-29)

• work on I-287 Hudson River to IC-8 in Elmsford

• painting of the Tappan Zee bridge

• Rehab of IC-34A with I-481 in Syracuse

• bridge replacement at IC-32 at Rome

• improvements MP-86 to MP-93 in the Kingston area

• work on the Berkshire spur (to the Mass Tpk)

In addition the Thruway board announced a $67m plan for high speed electronic toll lanes with construction to start in 2001. The most spectacular plan the Thruway has for electronic toll express (ETX) lanes is in the Albany area at IC-24 where there is a complex and often congested IC between the Thruway (I-90 west and I-87 south) and the so-called Northway (I-87) to Montreal and I-90 east.) Here a large elevated bypass ramp system is in design to take express ET traffic right over the top of the congestion at manual toll plazas and their connections. It is the most spectacular and expensive ETX facility so far in the US.

All this was debated and discussed and a Board decision announced Jan 27. Now it has all been put on hold by the Governor’s intervention. Chair Tomson says the Thruway is responding to the Governor’s request that it look for “alternatives to toll increases” while allowing the Thruway to proceed with its capital improvement program. A spokesman told us one idea is to hand the old Erie Canal back to the state Parks and Recreation department. The Canal, an economic lifeline of the state 150 years ago, is now only used by a few pleasure craft. It is an expensive historic artifact and recreation facility to maintain, costing the Thruway a net $60m/year.

The Thruway was also lumbered by the state in the 1980s with funding the maintenance of the Cross-Westchester Expressway (I-287) and a section of I-84 near Newburgh. But it was denied the right to levy any tolls there to pay for that expense. Free roads, surely, are state DOT business, so another way of supporting the Thruway’s finances would be for the Thruway Board to say to the state legislators: “We’re in the tolling business. If you’ll let us toll I-287 and I-84, we’ll toll ‘em and support ‘em. Otherwise guys, they’re yours. We’re out of here.”

Readers may have other toll-alternatives suggestions for the Thruway, which we’ll be glad to pass on – tollroads@aol.com