Why NJ had to increase tolls in an economic downturn?

The tolls on New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway will all increase before the end of this year. In an economic downturn, with high unemployment rate in the horizon, why did Gov. Corzine push for a toll hike?

One of the primary reason is to secure funding for THE Tunnel project. This project will build a new passenger rail tunnel under the Hudson river connecting New Jersey and New York.

The Asbury Park Press reports that the cost of this tunnel is estimated to be $7.5 billion. Construction is scheduled to begin in 2009 and completed in 2017. Funding for this project is shared amongst the States of New Jersey and New York, the Port Authority of New York and New Jersey and the Federal Transit Administration (FTA).

Federal funding is critical for the success of this project. By law, the FTA can provide funding for a project only when the states can come up with its share of money. To keep this tunnel project on schedule, the state of New Jersey had to come up with its share either by raising gas tax or by leasing the turnpike or by raising the tolls.

In an election year, raising gas tax is almost impossible. Gov. Corzine tried leasing the turnpike...but was unsuccessful. So the last option was to raise the tolls on the turnpike and the parkway.

The proceeds from the toll hike will enrich the state transportation trust fund and provide necessary backup to secure federal funding for the tunnel project.

New Jersey also has plans to widen the turnpike between interchanges 6 and 9 at an estimated cost of $2.5 billion. The parkway will also be widened between interchanges 30 and 80 at an estimated cost of $800 million. But these project schedules are not as important as the tunnel project schedule and hence the big push for toll hike in an economic downturn.

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