Explainer: Legislators in Two States Push to Reform the NY-NJ Port Authority

Meir Rinde | February 17, 2015 | Explainer, Transportation
Working on parallel paths and with identical bills, lawmakers struggle to bring transparency and accountability to the agency that gave Bridgegate to the world

Credit: WHYY/NewsWorks
george washington bridge toll plaza
State legislators in New Jersey and New York have been trying for three years to pass laws that would increase transparency and accountability at the Port Authority, the bistate agency that controls the George Washington Bridge, a half-dozen airports and other vital transportation infrastructure, and the World Trade Center site.

But despite widespread support for their efforts — and widespread criticism of the Bridgegate scandal, large toll hikes, cronyism, and other problems — the reformers have been largely stymied by gubernatorial vetoes, most recently in December. The bill sponsors in New Jersey are now trying to drum up enough votes to override Gov. Chris Christie’s veto, while the New York sponsors have reintroduced an identical bill that Gov. Andrew Cuomo rejected.

What’s in the bills

To make changes at the Port Authority, the states of New Jersey and New York must approve two identical laws. Last year both legislatures unanimously passed two reform bills, with a combined vote tally of 612-0.

The first bill, S-2183 in New Jersey and S-6178 in New York would require the Port Authority to follow both state’s public records statutes — New Jersey’s Open Public Records Act (OPRA) and New York’s Freedom of Information law (FOIL). People whose record requests were denied could sue the agency and win enforceable court rulings. Cuomo signed the bill and Christie asked for minor changes. The bill is expected to become law when the New Jersey Legislature makes those changes.

Until the bill is signed, the Port Authority remains exempt from either state’s law, although the agency has had a Freedom of Information Code since 1977 and says many records are subject to disclosure, with a number of exemptions. In October, as the state Legislation neared passage, the authority’s commissioners updated the code to say that the agency will follow OPRA and FOIL, and that people whose information requests are denied can appeal to an agency panel and then to an independent arbitrator.

Critics still say the voluntary code is insufficient, since courts can’t enforce it and it could be changed at any time by a vote of the commissioners.

The second bill, titled S-2181 in New Jersey and S-07721 in New York aims to improve accountability and transparency by creating a number of new rules not subject to the commissioners’ discretion.

For example, while the commissioners do have bylaws requiring some meetings to be open to the public, the bill would make them subject to both states’ court-enforceable open-meeting laws. Commissioners would also be required to sign an oath affirming “their fiduciary duties,” meaning that they must do “what’s good for the Port Authority and the people who depend on it,” as former New York Assemblyman Richard Brodsky wrote, rather than what is politically expedient.

The agency’s financial statements would have to be certified by its top officials and its auditors would be subject to conflict-of-interest rules. Commissioners could not discuss or vote on matters in which they might have a conflict. Officials and employees would be required to report any suspected corruption, fraud, crime, or conflicts of interest to the agency’s inspector general. Again, many such rules already exist in some form — the Port Authority already requires employees to report fraud and crime, for example — but they do not have the force of law.

The proposed bills would establish a whistleblower program, require the agency to record officials’ contacts with lobbyists, and mandate submission of financial disclosure statements by commissioners and top officials. . The commissioners would have to adopt a code of ethics, create a governance committee, and, for the first time, appear before state legislative committees at either legislature’s request. The bill is seen as introducing some legislative control over the agency and diluting gubernatorial authority, which the governors can exercise in part by vetoing commissioners’ votes.

“We don’t follow the Port Authority on a regular basis until something hits the paper, and then we scramble and investigate it. What we need is ongoing oversight,” said state Sen. Bob Gordon (D-Bergen), a reform bill sponsor. “We don’t diminish the governor’s powers to veto the minutes, but we need another set of eyes following the Port Authority.”

The authority’s annual report would have to include audited financial statements, the capital budget, and pay figures for officers and managers, and the agency would issue an annual list of sold properties, particularly those sold at below market value. Toll increases would be preceded by a needs assessments and public hearings in both states.

A brief history of the bills

New York’s Legislature approved the two bills in June and New Jersey followed in November. The Saturday after Christmas Cuomo and Christie announced they were vetoing the accountability bill and released the recommendations of their Special Panel on the Future of the Port Authority, which they said they preferred.

The reforms in the legislative bill “necessarily lack the insights and extensive analysis contained in the Special Panel’s report, resulting in ideas that are too narrow, and lacking in the changes needed for reform,” Christie wrote in his veto.

“The governance structure and other accountability measures recommended by the Special Panel will do a better job of improving accountability, but will also make the PA more fiscally responsible,” Cuomo said.

Those advocating for reform denounced the vetoes and called the panel recommendations an inadequate “whitewash.” Without the new legislative oversight envisioned under the vetoed bill, the Port Authority and its multibillion dollar budget would remain under the sole control of the governors, they said. Unchecked politically influenced hiring could continue. Whistleblowers would not have statutory protections from retaliation. The agency could force through more toll hikes without conducting the independent assessments and extensive public hearings the bill would require. And it still would not be subject to state open-meeting laws and financial disclosure mandates.

Above all, any rules adopted by the commissioners would lack the force of law and could be changed at any time. If the agency failed to follow its own rules, citizens would have little recourse beyond complaining to Port Authority employees like the inspector general, who work for the commissioners.

“While the Port Authority can implement a number of these reforms now, and they are under Chairman John Degnan, those reforms can be negated with a majority vote of the commissioners present,” Gordon said. “What we need is the force of statute. While the team in place today may be doing the right thing by implementing these reforms, a few years from now there could be another team in there and they could just disregard them, as has been the history.”

What the panel recommended

The Special Panel consists of Port Authority Chairman Degnan, a former New Jersey attorney general; Vice Chairman Scott Rechler of New York; Commissioner Richard Bagger, a former Christie chief of staff; and lawyers for the two governors.

Perhaps most significantly, the panel’s report recommends changes to the Port Authority’s bifurcated system of governance. Under current practice, the executive director and board vicechair are chosen by the governor of New York, and the deputy executive director and board chair are chosen by the governor of New Jersey. That arrangement has been criticized for allowing the New Jersey officials to orchestrate the Bridgegate lane closures in Fort Lee without the knowledge of the executive director, a New Yorker.

The panel recommends that the agency hire one CEO instead and that the board either have cochairs or an annually rotating chairmanship.

The panel endorses records disclosure, open meetings as much as possible, a new code of conduct, and creation of a chief ethics officer position. The report says the board has already moved to increase transparency through steps like taking individual roll call votes in public rather than blanket consent-calendar votes, and informing the public of recusals from voting.

However, most of the report is a strategic plan rather than a reform plan, concentrating on the need to refocus the Port Authority back on its original mission of building and managing transport facilities. The recommendations include restarting planning of additional trans-Hudson transit options — presumably a tunnel like the Access to the Region’s Core (ARC) project Christie canceled — and shutting down a fund that allowed governors to use authority revenues for pet projects like a clam purification plant at the Jersey Shore. Some $600 million in these so-called regional development funds would instead be used for transportation improvements more central to the Port Authority’s mission.

The report recommended an eventual selloff of a large part of the agency’s real estate holdings, including the World Trade Center site, and use of a wider variety of financing schemes such as public-private partnerships.

Other priorities in the report include updating the capital plan, improving the airports, building a new bus terminal in Manhattan, and cutting the cost of the PATH train service, possibly by having a private company or another agency take it over.

Parts of the strategic plan, such as the call for a new trans-Hudson tunnel, were welcomed by transportation experts. Martin Robins, the Port Authority’s former planning director and the director emeritus of Voorhees Transportation Policy Institute at Rutgers University, also praised the proposals to change the governance structure and end the pet-projects fund.

But reformers said the recommendations did not provide any new outside oversight by state legislatures and courts, or guarantees that major decisions like future toll hikes would be undertaken in a more transparent manner.

Gordon also said he thought the governance recommendations may have only been included in the panel report for public-relations purposes, since he doubted Christie would ever actually allow such changes. The senator said he wrote another bill that would address governance but didn’t even bother introducing it because he was sure it would bring a veto. He described the panel recommendations as “the status quo cloaked as reform.”

What happens next

In January, Gordon and Sen. Loretta Weinberg (D-Bergen) announced that Democrats would seek to override Christie’s veto, despite the failure of previous override attempts on many bills. They would need a total of 27 votes in the Senate to succeed.

Sen. Michael Doherty (R-Warren) said he would vote to override, but in addition to him and all the Democrats, the effort would need two additional Republican votes. In the Assembly it would need all the Democrats and six Republicans. Assemblywoman Holly Schepisi (R-Bergen), who cosponsored the reform package, appeared unenthusiastic, saying last month that she didn’t “anticipate that a veto override will occur.”

A vote had been scheduled for March 5, but Doherty will be out of town on that date so the override attempt may end up being delayed.

Gordon said he is in the process of meeting with each of his Republican colleagues individually to lobby them for their support. He argued that Christie’s popularity has fallen and he may not be able to block widely popular reforms forever.

“This is affecting a lot of people. There’s a lot of pent-up anger with the Port Authority from people who are paying these tolls or experiencing a great deal of discomfort using the Port Authority bus terminal,” Gordon said. “Some of these other issues that have been the subject of override attempts … they don’t affect a large number of households. The Port Authority is different. The polling numbers show that it’s off the charts.”

“I’ve had Republican colleagues tell me, if you can get those two votes that you need, I think you’ll get five or six. No one wants to be number 27, but I think the Republican caucus is not happy with the way this is working out,” he said.

In New York, the bill expired at the end of last year but was reintroduced in January. Though successful overrides are also rare in New York, if the bill passes and is vetoed again the Senate and Assembly may be more likely than their New Jersey counterparts to push one through, said Nadine Lemmon, the New York and federal policy coordinator at the Tri-State Transportation Campaign.

New York has already made similar reforms at other public authorities in the past decade, she said.

“I don’t think this is about Democrat or Republican. I think both Democrats and Republicans see the value of reform. They see the value of these bills. And both Democrats and Republicans are grumpy that the governor vetoed this,” Lemmon said.

However, political considerations could prevent an override if the majority in the Republican-led New York Senate decides not to risk alienating Cuomo, she said.

“The Republicans are more likely to not challenge the governor,” Lemmon said. “He’s had a good working relationship with the Republicans, and they need to work together to get the budget done and get legislation done. Politics is very much of a dance, and there’s some horse-trading that goes on.”

Further complicating the bill’s future is the recent ouster of former Assembly Speaker Sheldon Silver (D-Manhattan) after he was charged with taking bribes and the selection of a new speaker, Carl Heastie (D-Bronx), with different priorities.

“The dynamic really might change with the (change) in the speakership,” Lemmon said. “It’s all topsy-turvy here in New York.”

How we got here

The Port Authority controls the George Washington Bridge and five other tunnels and bridges between the two states; six airports, including JFK, LaGuardia, and Newark; the PATH train; the World Trade Center site; Manhattan’s two bus terminals; and marine ports and real estate developments. It has a 2,000-member police force and a 2015 budget of $7.8 billion.

The agency was created in 1921 to end jurisdictional disputes over the Hudson River and to make port development more efficient. According to “Empire on the Hudson,” Jameson Doig’s definitive history of the Port Authority, its establishment was delayed for years as political leaders resisted giving up extensive planning and hiring powers to an independent entity, and local officials fought what they saw as a power grab by state officials. New Jersey Gov. Edward Edwards actually vetoed the unanimously passed bill creating the Port Authority, but the legislature promptly overrode him.

Doig has written that the agency was designed to be “insulated from patronage demands and other short-term political pressures generated by mayors, legislatures, and the governors themselves.” Each governor appoints six of the 12 commissioners, but their six-year terms meant that new governors could not simply replace them with cronies.

While critics have described the agency as undemocratic since it was established, Doig says that its autonomy worked well for 75 years. The commissioners allowed the executive director to focus on ambitious infrastructure projects, such as building the George Washington Bridge, while fending off politicians’ demands for patronage hiring. However, in recent years the governors have directly imposed their own choices for executive director (from New York) and deputy director (from New Jersey), creating managerial confusion, and made them hire politically connected, sometimes underqualified employees, Doig says. He argues that the commissioners must start exercising their powers, “ending their recent tendency to be simply obedient assistants to the governors.”

The debate over the agency’s powers sprung to the forefront again in 2011, when it sparked a huge outcry by announcing a series of bridge-toll hikes over five years with almost no public input. The cash toll for the George Washington Bridge, for example, just went up to $14 for motorists this year and to $114 for tractor trailers.

New Jersey legislators responded by passing a transparency accountability bill, S-1761/A1011,
which Christie vetoed, saying reforms should target all public authorities. An override failed and the reform effort was stagnant until Bridgegate, the scandal touched off by closing lanes and creating four days of traffic havoc at the George Washington Bridge in September 2013.

For critics, Bridgegate further illustrated the Port Authority’s secrecy and the governor’s politicization of the agency.

The scandal also brought to the surface a range of other questionable practices, including misleading justifications of large toll hikes, diversion of agency funds to non-Port Authority projects, accumulation of tax-exempt properties, and the awarding of contracts to political allies.

Christie’s 2010 canceling of the $8.7 billion ARC project, which would have built a badly needed rail tunnel under the Hudson River, and his diversion of its funding to other transportation needs, also came in for renewed criticism.

“The governors took advantage of their really sole oversight of the agency, using it to solve other problems,” Gordon said. “New Jersey’s running out of money for infrastructure improvements? Well, the governor tapped into a little pot of money so he wouldn’t have to raise tolls or the gas tax. The public just doesn’t know what their money is being spent on.”

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