For the second year in a row, tolls on New Jersey’s major toll roads automatically increase at the start of the new year.
Increases totaling 3% will go into effect on the Garden State Parkway, the New Jersey Turnpike and the Atlantic City Expressway on Jan. 1, according to operating budgets adopted in recent weeks by the respective toll road agencies.
Toll road operators can raise tolls by as much as 3% annually without new rounds of public hearings under a controversial new policy the agencies approved in 2020.
Earlier this year, the first automatic annual adjustments allowed by the policy went into effect on all three toll roads to help support operating budgets and ongoing capital improvements. For example, the average passenger car toll will increase from $4.95 to $5.10 in the latest 3% increase.
The third year in a row
The increase in 2022 follows a more significant toll increase that was implemented in 2020, as well as a major new capital investment proposal. This makes the 2023 increase the most recent to occur in just a few years.
Allowing tolls to increase automatically each year should give toll road operators more flexibility to ensure that revenues meet or exceed annual expenses and debt service. That’s what a major Wall Street credit rating agency noted in a recent review of the New Jersey Turnpike Authority’s bond issue.
According to the agency, at the end of September, the highway’s revenue from tolls amounted to almost 1.6 billion dollars. The authority received about $2 billion in toll revenue last year, on top of $1.4 billion in 2020, according to the agency.
The latest automatic hikes come as many New Jersey motorists also face price hikes at Hudson River crossings operated by the Port Authority of New York and New Jersey.
But while it may be good policy for toll road operators and investors, the practice of allowing automatic increases also has its detractors. A bipartisan bill introduced in the Legislature earlier this year would bar the New Jersey Turnpike Authority from giving annual raises. Some sponsors and other critics have suggested that the automatic increase would pile new costs on New Jersey residents, when many are already struggling to make ends meet during a period of high inflation.
During the first year of the COVID-19 pandemic, the authority increased tolls to support an ambitious capital plan that will fund major highway expansion projects and a number of other long-term investments. Overall, in September 2020, tolls increased by 36% on the road and by 27% on the boulevard.
The South Jersey Transportation Authority, which operates the Atlantic City Expressway, also raised tolls in 2020, and both agencies at the time also set the stage for automatic 3% annual increases starting Jan. 1, 2022.
Other fare increases
The latest automatic hikes come as many New Jersey motorists also face price hikes at Hudson River crossings operated by the Port Authority of New York and New Jersey. Planned increases on the George Washington Bridge and the Holland and Lincoln Tunnels are also set to go into effect Jan. 1.
And New Jersey motorists are still waiting to see what happens next as officials in New York City plan to impose “congestion fees” on motorists entering Manhattan’s central business district, including from the New Jersey side of the Hudson River.
“While other states are looking for ways to help their people through this economic crisis, Governor Murphy and the state of New Jersey are making this terrible situation worse by making travel more expensive.” — U.S. Rep. Jeff Van Drew (R-2nd)
In recent weeks, both houses of the New Jersey Legislature have passed token resolutions expressing opposition to a plan that would make New York the first in the nation to implement so-called congestion pricing.
When it comes to New Jersey’s toll roads, implementing a modest annual increase should “eliminate the need for periodic large rate increases,” Fitch Ratings analysts said earlier this month when they assigned the barrier’s bond issue an “A+” rating. .
Looking for a rollback
However, a bipartisan bill introduced earlier this year takes a different view. It calls for repealing the 50-cent toll increase passed in 2020, in addition to banning automatic annual increases.
The same measure also bars the city body — whose revenue in recent years has increasingly been used to subsidize New Jersey Transit’s operating budget — from passing another fare increase “until Dec. 31, 2024.”
Republican U.S. Rep. Jeff Van Drew (R-2nd) — himself a former state lawmaker — is among those who spoke out against the latest automatic toll hike.
In a recent news release, Van Drew noted that the increase would come at a time when inflation is at or near historic highs. He also placed the blame on Democratic Gov. Phil Murphy, as the governor has the power to veto actions taken by toll road operators.
“While other states are finding ways to help their people through this economic crisis, Governor Murphy and the state of New Jersey are making this terrible situation worse by making travel more expensive,” Van Drew said.
