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Breaking Up PA Would Solve Christie's Transportation Trust Fund Problem

Tapping Port Authority toll revenues would enable the governor to avoid racking up massive debt or raising the gas tax -- two bad moves during the 2016 presidential primaries

christie
Credit: Governor's Office/Tim Larsen

Gov. Chris Christie’s proposal to dismantle the Port Authority of New York and New Jersey in order to give each state control more than $1.3 billion in annual tolls would solve his biggest fiscal headache: where to find $1.6 billion a year in state revenue to renew the Transportation Trust Fund (TTF) without adding massive state debt or raising gas taxes right in the middle of the 2016 presidential primaries.

New York's Gov. Andrew Cuomo's statement this weekend that he might support Christie's proposal to break up the Port Authority caused consternation among transportation experts, who believe that splitting the agency in two would lead to more dysfunction in transportation development and less long-term regional thinking and planning.

Bailing Out

For Christie, splitting the Port Authority in two would provide the same sort of bailout as his decision to cancel the Access to the Region’s Core (ARC) rail passenger tunnel and shift $1.8 billion in Port Authority revenues and $1.3 billion in New Jersey Turnpike Authority toll money earmarked for the tunnel to provide the pay-as-you-go money needed to renew the TTF in 2011 without raising taxes.

But if the bistate agency was dismantled, Christie would have full control over New Jersey’s share of revenues and New Jersey project decisions without having to worry about the PA's lawyers or New York's representatives -- a very real threat.

Port Authority documents obtained by The Record showed that even as Christie was announcing that PA money earmarked for the ARC Tunnel would be used to repair the Pulaski Skyway and other Jersey bridges and highways, PA officials were objecting behind the scenes, saying it was an illegal use of PA funds. After months, the two sides finally reached a compromise, but Christie’s gamble with ARC had been in danger of not paying off.

For Christie, being able to earmark $500 million a year or so in Port Authority revenue for New Jersey highways and bridges as pay-as-you-go projects as part of the next Transportation Trust Fund, without having to ask PA officials or New York’s Democratic governor for permission, would eliminate a political and fiscal nightmare.

Without that money, Christie would either have to persuade the Democratic Legislature to allow him to borrow virtually all of the $1.6 billion in state matching funds needed to pay for highway, bridge and mass transit construction projects for Fiscal Years 2017-2021 – which is unlikely. Or he could go along with Democratic calls for an increase in the state’s gas tax, which is the third-lowest in the nation, and which Sen. Raymond Lesniak (D-Union) and Assembly Speaker Vincent Prieto (D-Hudson) have already been pushing.

Either option – adding $8 billion in state debt or breaking his “no new taxes” pledge -- would be anathema to Republican primary voters, and Christie would have to announce the decision in his February 2016 budget speech in the middle of the presidential primary season. That’s why fiscal policy experts have been predicting privately that if Christie decided to run for presidency, he would resign by the fall of 2015 to run as a full-time candidate and leave the TTF problem to Lt. Gov. Kim Guadagno. Being able to plug in the Port Authority money would enable him to refinance TTF at reasonable debt levels without a gas tax hike, and eliminate the need to resign.

Family Feud

Citing a history of conflicts at the Port Authority between New York and New Jersey interests, Christie announced during a Statehouse press conference Friday that he was “particularly intrigued by the idea of dismantling the Port Authority operations from under one roof to two.” Christie added, “The best way to deal with this is to take the Hatfields and McCoys and move them to separate homes, because they haven’t been able to get along, despite my best efforts and the best efforts of Gov. Cuomo.”

Given the legal and logistical difficulties of disentangling a 93-year-old bistate agency with joint ownership of six bridges and tunnels, three airports, a major port, a bus terminal, the World Trade Center and the PATH rail line, Christie’s statement was dismissed initially by some as a diversion from the Bridgegate scandal and the resignation of embattled Christie ally David Samson as Port Authority chairman.

But New York Gov. Andrew Cuomo’s statement to New York budget reporters Saturday that he is also willing to consider putting an end to the bistate agency alarmed transportation advocates who have been calling for Port Authority reforms.

“What’s horrendous here is that Cuomo seems to be taking advice from Christie rather than from his own commissioners, who understand the need for an authority having regional responsibility for long-term transportation needs,” said Jameson W. Doig, a Dartmouth University professor whose Empire on the Hudson is the definitive history of the Port Authority.

“The basic problem is not the structure of the agency, but leadership, with Cuomo being passive and Christie being aggressive in stacking the agency with his patronage appointees and pushing to get what he wants,” Doig said. “The problem wasn’t too much conflict. It was that for too long, Cuomo and his commissioners were not willing to engage in the level of conflict that was needed to preserve the integrity of the agency.”

Transit expert Martin E. Robins said he was incredulous that Christie was arguing that the Port Authority should be dismantled because it “has been riven by rivalry when it was his appointees who set up the war room to map out how to mislead the public on the toll increase and it was his appointees who blocked off the George Washington Bridge access lanes, and in both cases hid it from executive directors who were appointed by New York.”

Robins, the director emeritus of Rutgers University’s Alan M. Voorhees Transportation Policy Institute, called the proposed dismantling of the Port Authority “a very serious mistake that would lead to short-term state budget needs taking priority over the long-term transportation needs of what is truly a regional economy.”

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