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Embattled Port Authority Still Fighting Toll Hike Lawsuit

But the Port Authority backed off that tack in its response to the AAA lawsuit, insisting that no toll money would be going to the World Trade Center project. The authority asserted that its interstate transportation network, which includes the money-losing Port Authority Trans-Hudson (PATH) rail line, operates at an overall deficit, even with all toll revenue from the six bridges and tunnels included, and therefore no toll money is being diverted to the World Trade Center.

However, that was before Port Authority officials acknowledged that the cost of the World Trade Center project had ballooned from $11 billion to $15 billion -- a massive increase considering that Christie cancelled the Access to the Region’s Core (ARC) rail passenger tunnel project in 2010 because he feared that cost overruns could hit $3 billion.

U.S. Magistrate Judge Richard Holwell declined to issue an injunction blocking the toll hikes in February 2012, but allowed AAA to proceed with its lawsuit. That was 23 months ago; the lawsuit is still bogged down in discovery motions; and Holwell himself has retired, passing the case on to U.S. Magistrate Judge Henry Pitman and to Judge Richard K. Eaton of the United States Court of International Trade

Port Authority officials did not respond to requests for comment over the weekend concerning the lawsuit, its capital plan, and the impact of the substantial World Trade Center cost overruns.

“That $4 billion cost overrun is going to have to be paid for somehow,” said Martin Robins, director emeritus of Rutgers University’s Alan M. Voorhees Transportation Policy Center. “The Port Authority is now saying that the World Trade Center will be paid for out of bonded indebtedness, but that restricts the amount of transportation capital projects that can be done out of debt in the future. It means a smaller capital program on the transportation side.”

Christie diverted $1.8 billion of the $3 billion the Port Authority originally set aside for the ARC Tunnel to provide some of the matching funds he needed to underwrite a five-year $8 billion Transportation Trust Fund plan without raising gas taxes in 2011.

But it is unclear where the other $1.2 billion originally set aside for the tunnel will be going, Robins said, and it is unclear that the Port Authority will have the resources to serve as a matching-fund piggybank again in 2016 when the Transportation Trust Fund again comes up for renewal. Compounding the Port Authority’s fiscal headache in the short term is the fact that toll revenue from its bridges and tunnels has failed to meet expectations in the wake of the toll hikes, Robins said.

The Need for a Capital Plan

Robins agreed with Doig that it is virtually impossible to project the Port Authority’s ability to meet the bistate region’s future transportation needs without a capital plan.

Carol Kellermann, president of Citizens Budget Commission, a New York City-based watchdog group that made a series of recommendations last July to improve the Port Authority’s fiscal-reporting practices, noted that the agency said at the time that its “soon-to-be-released capital budget” would lay out the agency’s long-term strategy and vision.

Six months later, Kellermann said, “There’s still no capital plan. Nothing. Zero. They’re still approving capital projects on a piecemeal basis.” Kellermann said she was flabbergasted by the Port Authority’s decision, at Christie’s request, to take over the operation of Atlantic City’s airport, which is located far south of the Port region, defined as within a 25-mile radius of lower Manhattan. “What can I say?” she asked rhetorically.

Genovese noted that the Port Authority referenced a long-range $25.1 billion capital plan almost two-and-a-half years ago in its August 2011 press release announcing its plan to seek a major toll increase, then said no capital plan existed.

It was not until four months later -- after approval of the five-year phased-in toll hike by Christie and Cuomo -- that the Port Authority adopted a capital plan for 2012.

That was more than two years ago, however. Following the disclosure of the World Trade Center cost overruns, the Port Authority adopted an operating budget, but no capital budget, for 2013 at its December 2012 board meeting. Last month, for the second year in a row, the Port Authority again failed to adopt a capital budget, Kellermann pointed out.

“The Port Authority’s capital plan is a tradeoff between what New York gets and what New Jersey gets, and there seems to be a lot of internal jockeying going on,” Kellermann said. “The nature of the power struggle between the two states seems to be particularly acute now, and the failure to adopt a capital plan is just the most obvious symptom.”

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