Coming down the 'pike

Dwelling as we do alongside the New Jersey Turnpike, Teaneck residents have extra reason to be interested in the outcome of deliberations over the future of that major highway. Among the many ideas being kicked around Trenton by elected officials is a sale or lease of the Turnpike to a private owner/operator for a large upfront cash payment. Similar deals elsewhere have raised significant sums, providing quick cash for governments to apply toward other pressing obligations and freeing them of the responsibility for maintaining and improving transportation infrastructure.

Given that New Jersey faces numerous well-chronicled financial difficulties and that it happens to own one of the toll roads most coveted by private investors, the temptation to realize the value of the New Jersey Turnpike (estimated by some to be in the neighborhood of $20 billion) is hard to resist. Could the fact that private investments in toll roads have become wildly popular at the same time that state legislators have stalled in their efforts to resolve New Jersey's fiscal problems represent some extraordinarily good luck for New Jerseyans?

I'm not so sure. Put aside the fact that the first thing a private investor will do is jack up prices on New Jersey drivers. While this might create hardships for some (and is certainly at the heart of popular opposition to any move to sell or lease the Turnpike), those who use and benefit from a particular thoroughfare should indeed bear the cost for it.

The real problem with this potential fix to New Jersey's budget woes is that it would allow our Governor and state legislators to wriggle out of the promises they made to enact reforms that would fix a broken system. With $20 billion to fund property tax credits, state assistance to local schools, and other important priorities, the incentive to compel municipalities and school boards to merge or share services will diminish. The urgency with which changes to the education funding formula is being reworked will fade. The will to take unpopular but necessary belt-tightening decisions (for example, reducing benefits for state employees) will evaporate, too. Of course, there is also the question of whether a government that has failed to balance its budget for six straight years can be trusted with a large sum of unallocated money in the first place.

We can only sell the Turnpike once (at least in our lifetimes). With the astronomical sums other public assets are attracting these days, now might be a good time to do it from a financial standpoint. It is far less clear that it is the right time to do it from a policy perspective.