New Jersey’s major toll roads will see an automatic increase in tolls as the new year begins for the second year in a row.
Tolls on the Garden State Parkway, New Jersey Turnpike, and Atlantic City Expressway will all go up by 3 percent on January 1 due to operating budgets approved in recent weeks.
The agencies’ controversial new policy, allowed in 2020, allows toll-road operators to increase rates by up to 3 percent each year without holding additional rounds of public hearings.
The first of the policy’s annual automatic adjustments, which went into force on all three toll roads earlier this year, will go toward funding operating budgets and ongoing capital investments. As an illustration, the current 3% hike means a rise from an average turnpike toll for passenger cars of $4.95 to $5.10.
Currently in Its Third Year Running
These hikes followed even steeper toll increases implemented at the beginning of 2022, about the same time that proposals for substantial additional capital investments were being made. That means New Jersey drivers should expect higher tolls in 2023 for the third year in a row.
By allowing annual incremental toll hikes, toll road operators are given more leeway to make sure annual revenues meet or surpass annual expenses and debt payments. Specifically, this was mentioned in a recent examination of a bond issue by the New Jersey Turnpike Authority by a prominent Wall Street credit-rating agency.
According to the turnpike authority’s financial reports, the total amount of money collected in tolls at the end of September was close to $1.6 billion. According to the authority’s financial records, the toll money generated in 2019 was almost $2 billion, which was higher than the $1.4 billion generated in 2020.
However, while allowing the automatic hikes may be good policy for toll road operators and investors, it is not without its critics. To prevent the New Jersey Turnpike Authority from imposing annual hikes, a bipartisan bill was proposed to the Legislature earlier this year. It has been argued by both advocates and detractors that the automatic hikes are unfair to New Jerseyans, who are already trying to make ends meet in the face of high inflation.
As part of an ambitious capital plan that includes funding for major highway expansion projects and a series of other long-term improvements, the turnpike authority raised tolls during the first year of the COVID-19 programme. The turnpike’s tolls increased by 36% and the parkway’s by 27% in September 2020.
The South Jersey Transportation Authority, which manages the Atlantic City Expressway, likewise increased tolls in 2020, and both agencies at that time laid the groundwork for the automatic 3% annual hikes to take effect on January 1, 2022.
Another cost rises
Many New Jersey drivers will also see price increases at Hudson River crossings run by the Port Authority of New York and New Jersey, coinciding with the latest round of automatic increases. Similar price hikes at the Holland and Lincoln tunnels, as well as the George Washington Bridge, are set to take effect on January 1.
Even as New York City officials go on with plans to levy a “congestion toll” to drivers entering Manhattan’s central business area, drivers in New Jersey are waiting to see what happens next.
New Jersey’s state senate and assembly have just passed symbolic resolutions opposing a scheme that would make New York City the first in the country to impose congestion charging.
Fitch Ratings analysts noted earlier this month that allowing the modest annual hikes to go into effect would “eliminate the need for periodic substantial rate increases” on New Jersey’s toll roads. This was in conjunction with Fitch’s “A+” rating of the turnpike authority’s bond issue.
Desiring a Reversal
But the bicameral legislation that was submitted earlier this year has a different perspective. It prohibits automatic yearly increases and advocates for a reversal of the 50 cent rise in turnpike and parkway tolls that was implemented in 2020.
As part of the same package, the turnpike authority would be prohibited from increasing tolls “until beyond December 31, 2024.” This is because the authority’s income have been used to finance New Jersey Transit’s operational budget in recent years.
One of the people protesting the new automatic toll increases is Republican U.S. Rep. Jeff Van Drew (R-2nd), a former state legislator.
Inflation has been at or near record highs, as pointed out by Van Drew in a recent press release, so the price hikes will be felt keenly. Further, he laid the blame on Democratic Governor Phil Murphy, who may block toll road decisions if he so chooses.
While other governments are coming up with solutions to help their citizens weather the economic storm, Van Drew claims that New Jersey Governor Phil Murphy and the state of New Jersey are making things worse by raising transportation costs.