Easing COVID-19 Restrictions Could Boost Beach Traffic, Bump Up Badly Needed Toll Revenue

New Jersey residents never thought they’d want to see more traffic, but with April’s turnpike and parkway revenues down 60%, more cars could play a part in the state’s economic recovery
Credit: Dougtone via Creative Credit CC-BY-SA 2.0
End of the Road: Cape May exit on Garden State Parkway

New Jersey’s major toll roads took a huge revenue hit during the worst weeks of the coronavirus pandemic, but a reopening of the state’s beaches has come just in time for the Memorial Day holiday, boosting the potential for a big weekend of toll receipts.

Cash collections on both the New Jersey Turnpike and the Garden State Parkway resumed earlier this week, following more than a month of E-ZPass and invoice-only tolling that was implemented in late March as COVID-19 brought on strict-stay-at home orders.

But some of those restrictions are starting to be lifted as the rate of new COVID-19 infections has begun to slow. That easing of the pandemic, for example, has allowed beaches to be open across the state through the Memorial Day weekend.

Hoping for holiday traffic

Traffic on the toll roads has already begun to pick up, said Diane Gutierrez-Scaccetti, the commissioner of the state Department of Transportation, during an online news conference that was organized on Thursday by the International, Bridge, Tunnel and Turnpike Association. Still, an uptick in travel during the Memorial Day holiday could generate additional traffic even as social-distancing precautions remain in effect.

“While I’d really like to see strong traffic performance, I don’t want to see strong traffic performance (come) at the expense of anybody’s health,” Gutierrez-Scaccetti cautioned during the news conference.

And while the toll roads themselves have yet to make any major budget revisions, it remains to be seen what will happen to New Jersey’s gas tax, which is a major source of funding for capital projects on many roadways that aren’t supported by toll collections. State lawmakers reworked the formula that’s used to set the gas-tax rate in 2016, and sagging consumption could trigger a tax hike later this year.

Heading into the onset of the pandemic, a relatively mild winter had helped boost toll revenues for the New Jersey Turnpike Authority, the agency that operates both the turnpike and the parkway, said Gutierrez-Scaccetti, who serves as chair of the NJTA’s board of commissioners.

Staying off the roads

But turnpike and parkway revenues plummeted by more than 60% during the month of April as strict stay-at-home orders were in effect, and as the NJTA switched to strictly E-ZPass and invoice tolling, Gutierrez-Scaccetti said.

Over the first four months of 2020, revenue was down nearly 22% compared with the same period last year, she said. For the Atlantic City Expressway, revenue was down 23% year-over-year during the same period.

So far, the toll roads have not had to make any major budget adjustments, although the NJTA is planning a bond refinancing issue to free up some cash in the short term, Gutierrez-Scaccetti said. Plans to hike tolls to support new capital projects have already been proposed by the boards of both the NJTA and the South Jersey Transportation Authority, which operates the expressway. But no final votes on those proposals have been scheduled as the pandemic has raged on.

The upcoming Memorial Day weekend has also provided some grounds for optimism in New Jersey as Gov. Phil Murphy has begun to loosen economic restrictions that have been enacted during the pandemic. That includes opening the beaches, offering hope that Shore tourism, which is a major part of New Jersey’s economy, can help lead the state’s recovery.

“I think people are very excited that the Jersey Shore is going to be available to them for the Memorial Day weekend, and we are hoping for strong traffic performance,” Gutierrez-Scaccetti said.

But the commissioner also suggested the optimism comes with a caveat.

Staying focused on social distancing

“We’re looking for strong traffic performance, but we really want people to remain very focused on social distancing, wearing face coverings (and) doing what is right, not only to keep them safe, but to keep those around them safe,” she said.

Also remaining a concern for motorists in the coming months is whether the state’s current gas-tax rate of 41.4 cents per gallon will need to be boosted later this year to ensure compliance with state law.

A bipartisan compromise that was reached in 2016 to extend the life of the state Transportation Trust Fund, which is a capital account that pays for road, bridge and mass-transit projects across the state, increased the per-gallon gas-tax rate at the time by 22.6 cents.

Total annual capital spending was also boosted from $1.6 billion a year to $2 billion, and language was inserted into the TTF renewal law to provide automatic gas-tax hikes if fuel consumption doesn’t produce enough revenue to keep the annual capital-spending plan in balance.

Other language written into the TTF law requires the state treasurer to meet every year “on or before August 15” with the top budget official from the nonpartisan Office of Legislative Services to determine whether revenue collections have met the minimum amount needed to avoid running a deficit.

Last year, the state avoided another increase following the enactment of a 4.3-cent per-gallon hike in 2018 that helped plug a $170 million shortfall.

While it’s too soon to say for sure what will happen this year, recent state revenue reports suggest another increase could be looming, and some have begun urging state lawmakers to intervene so motorists won’t have to face a tax hike in the middle of a pandemic-fueled recession.

Asked to address that issue on Thursday, state Department of Treasury spokeswoman Jennifer Sciortino said “it’s no secret that gas-related revenues have plummeted, like most other revenue sources, due to the pandemic.”

“We plan to revisit the issue the way we normally do each year, by analyzing the data and conferring with the Legislative Budget Officer in August, as required by law,” she said.