PANYNJ:A political conglomerate

But no. Turns out the air terminals aren’t classified by the PANYNJ as interstate transp. So far as the PANYNJ is concerned, the only thing that is ‘interstate transp’ is stuff between two states of the union, namely NY and NJ. So GORTITN is tolls on the NY/NJ crossings plus fares on its NY/NJ transit operations (rail, bus terminals).

Guys why not just call it ‘Tolls and Fares’? Or is it the intent of the PA to be incomprehensible?

Probably. This bistate, multi-modal agency is whipsawed between the motorists and airline lobbies which feel their constituencies are being fleeced by the PANYNJ, and the transit, port, and ‘economic development’ interests that live parasitically off the PANYNJ’s toll and airport profits. The PANYNJ’s political exposure is reduced a mite if its accounts are so confusing that any citizen who might be inclined to try and understand them at the kitchen table at night is driven by obscure language and oddball classifications back to watching the soaps on the box.

It takes some work on the PANYNJ annual accounts statement to even sort out toll revenues from GORTITN (remember in English that is “Tolls and Fares”.) No way can the bus station at the Geo Wash Br be disentangled from tolls, but fortunately it’s small beans. And PATH (Port Authority Trans Hudson subway system) and most bus operations can be extracted from the GORTITN with grunt work on a calculator.

For calender 98, the latest report, tolls are $524m out of GORTITN’s $626m, 84% of total revenue. The PANYNJ crossings, the Geo Washington Bridge and the Lincoln and Holland tunnels under the Hudson river and the three Staten Is-NJ bridges toll only eastbound, so we doubled their toll number (121.4m) for annual toll trips of 243m. Toll per trip is $2.15, expenses $1.28 for a profit of 87c, a profit margin of 68%.

The Geo Wash Bridge (GWB) is hugely profitable according to the PANYNJ accounts – $241m tolls to $100m expenses (including interest and depreciation and everything) for a 141% profit margin. The Bayonne Br manages to lose money ($6m) and the Lincoln and Holland tunnels don’t do much more than break even. The NJ Turnpike to Staten Is bridges, the Outerbridge and the Goethals, however are real moneyspinners like the GWB with 200% profit margins.

The PANYNJ is of course a giant political slush fund, or to put it in more sociological terms, an engine of income redistribution.

Most of the seaports of the PANYNJ run at a loss. Port Newark, Brooklyn, Red Hook, Howland Hook, and Oak Point port facilities all lose money. The only financially viable operations are Elizabeth Marine terminal and Auto Marine. The NYC Passenger Ship Terminal which takes rich people on cruises is thankfully a small operation, but the PANYNJ most egregious racket. It earns no revenue at all but costs $7m to operate and makes no depreciation allowance.

Overall losses for the NY/NJ seaports were booked at 25% of revenue. Is this fair trade? Does it comport with world trade rules on non-subsidization? It seems doubtful.

Other political operations run by the PANYNJ include an Essex County dump called a Resource Recovery station that lost $14m on revenues of $43m, and an industrial park in Yonkers with revenues of $3m and expenses of $24m and a loss making Newark Legal and Communications Center which the PANYNJ calls “economic development.” At least the World Trade Center is now profitable.

The US Congress, which is quick to advise foreign governments to get their house in order by putting such state businesses on a commercial footing, indulges the PANYNJ. It recently promised hundreds of millions for deepening the shipping channels to the PANYNJ’s loss-making ports. The PANYNJ port charges are inevitably influenced by political contributions from port interests and the people in charge at the board level are patronage appointments..

By contrast with the port interests, the airlines do not apparently play NY/NJ politics well. They pay the PANYNJ $1230m for services that cost it $973m, so the airports earn PANYNJ profits of $257m - greater in absolute terms now than the toll profits ($211m), but at 26%, a lower profit margin than tolls’ 68%.

Nowhere in page after page of self-congratulatory verbiage in its annual report does the PANYNJ address why it runs operations that lose money year after year. It doesn’t have even a hint of any rationale for these huge cross-subsidies.

This is too sensitive an issue for public discussion. Sad truth is: it is the other way around. The taboo-to-discuss cross-subsidies are themselves the political rationale for perpetuating such redistributionist agencies as the PANYNJ. Through such a multi-modal conglomerate as the PANYNJ the politically weak - dispersed and difficult to organize constituencies like motorists and airline passengers are quietly exploited by the politically strong – at the docks and in transit – to the detriment of the regional and national economy. And to the detriment of tolling?

Now, none of this is a reflection on the guys who work there. Within the constraints of the system, they do a pretty good job of serving the public. Outside the political box they could do so much more.

Change may be on its way. Apparently major decisions on the port have become politically gridlocked because of poor relations between the politicians on either side of the Hudson. Devolution of its assets and power may be the only way to move forward. (www.panynj.com)

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Transit operated by the PANYNJ costs more in aggregate than the toll facilities ($368m vs $313m) yet it supports only about half the number of trips (122m vs 243m). Toll trips are vehicle trips and represent at least 1.5 persons/trip so the better comparison would be 122m vs 364m. The toll trips constitute substantial freight movement too, versus zero by transit. Toll payers are paying more than twice the costs for the use of facilities that are often congested, indicating strong unsatisfied demand.