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Thread: New Jersey Subsidizes New York's Economy

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    Default New Jersey Subsidizes New York's Economy

    So New York wants New Jersey to pay even more to their economy. Currently it's the Hudson Rail tunnel which will be used to support New York's businesses while leaving our cities struggling economically or risk becoming mere bedroom communities where people just live.

    Now Bloomberg wants to charge people $8 for entering NY from NJ. Here goes more of New Jersey's hard earned money going to the coffers of New York. Also, if this does go through, I see a dim future for our cities around New York. Parking garages will pop up all over the place in New Jersey cities, not to serve the local businesses, but solely as parking spaces for people going to Manhattan. It already costs $6 to take the bridge or tunnel into New York, plus a hell of a lot to park in Manhattan and on top of all that now - New York wants $8 as an entrance fee.

    These are only TWO ways New Jersey is being asked to subsidize New Yorks economy. Have you ever noticed the license plates on the rental cars out of New Jersey's Newark Liberty International Airport? You'd think that since they're in NJ they would have New Jersey plates - right? Well you'd be wrong - they have NY plates and pay New York registration fees.

    According to a NJ Parks employee - the merchandise at Liberty State Park is taxed with NY taxes and the money goes to New York - NOT New Jersey.

    Why do our politicians keep wanting to subsidize New York while short changing New Jersey? It's no wonder why New York is in the black while New Jersey is awash in red ink. Our politicians don't support our cities, I haven't heard of one New Jersey politician who is against the one way tunnel to New York (by the way - it's called ARC - "Access to the Regions Core", the name says it all)

    This was in the Star Ledger today...

    Jersey must dig deeper for Hudson tunnel
    BY PHILIP BARBARA
    Philip Barbara, a senior editor in Washington for Reuters, writes about New York regional commuter rail issues. He may be reached at phbarbara@aol.com.

    NJ Transit’s new trans-Hudson rail tunnel and the Long Island Rail Road’s East Side Access project have long shared a kinship. Both were born conceptually decades ago but got off the drawing board only in the early 1990s. Both will give commuters improved access to Midtown Manhattan, and both will cost more than $7 billion each.

    But they’ve developed at different paces. New York flexed its political muscle to obtain federal funds earlier, and last year the LIRR project got a federal funding agreement for $2.7 billion, or about 36 percent of its $7.36 billion cost. That $2.7 billion set a record. New York will pay the rest.

    After fits and starts, the new Hudson tunnel, better known as the Access to the Region’s Core project, has picked up unstoppable momentum. Every level of government in both states supports it. Engineering work is on track, the public expressed enthusiasm at just-completed hearings and NJ Transit will confidently seek bids this spring for custom electric-diesel hybrid locomotives that will run through the tunnel.

    In a mere 12 months, NJ Transit plans on applying for those all-important federal funds. And yet the faster the ARC advances, the closer it comes to a looming crisis, one only Trenton can meet head on: a funding gap of at least $1 billion, and likely $2 billion, in the state’s share of the project’s cost. Honest discussion of this gap has been done privately, for no one wants to be seen as a killjoy. The Federal Transit Administration requires that all local revenue streams for a project like the ARC be secured before it will even consider an application for funds. The LIRR project obtained the FTA commitment only after New York approved a big transportation bond issue.

    How much in federal funds will the Hudson tunnel get? In a recent project status report, NJ Transit said it will seek 48.6 percent of the tunnel’s $7.38 billion cost. But if comparisons with its kin are instructive, the ARC will get a more realistic 35 to 40 percent. In fact, NJ Transit is doing contingency planning for a contribution down to 35 percent. It’s not that federal transit officials in New York are not sympathetic, for they know the tunnel will give 100 more New Jersey towns direct rail service to the city.

    But FTA officials in Washington are closer to Capitol Hill, whose occupants clamor for a piece of the funding pie for new projects back home. ‘‘We continue to have very productive discussions with the FTA about progressing this project to a full funding grant agreement,’’ said Richard Sarles, NJ Transit’s executive director.

    As of today, the tunnel project has $2.5 billion in funds committed: $2 billion from the Port Authority of New York and New Jersey and $500 million that Gov. Jon Corzine will direct from state coffers. That leaves the state billions of dollars short for this project alone — not to mention how cash-strapped it is for other road and rail initiatives — and therefore it must come up with a funding package. There are few options. Last week, New York Mayor Michael Bloomberg made a splash with his ‘‘congestion pricing’’ transportation plan that theoretically could direct $3.5 billion to the tunnel.

    But this is fool’s gold, for it must be approved in Albany. ‘‘That’s a tough sell. Already people are lining up against the plan,’’ said Jeffrey Zupan of the Regional Plan Association. ‘‘To persuade people, Bloomberg will say, ‘You’ll get this, you’ll get that.’ So there’ll be less money for New Jersey.’’ It is also unthinkable that Albany lawmakers would give $7 for every $1 Trenton spends on the project when it is widely perceived as mainly benefiting New Jersey.

    The tunnel could receive federal homeland security money to pay for design features required in this age of terrorism, but any such funds would be incremental. And at the Port Authority, officials are already concerned they will be asked to cover the shortfall. So the state must find far more than $500 million.

    One way already in the works, Corzine’s plan to sell or lease toll roads or air rights to generate revenues, could help pay for the tunnel, his preferred new project.

    But two other ‘‘retail’’ sources have to be strongly considered in any package: a surcharge from a dime to a dollar on anyone crossing the river by any means — buses, cars, ferries and trains. The amount could depend on the mode of travel and the total needed from this revenue stream.

    Then there’s the state’s exceedingly low 10.5-a-cent-agallon gas tax. With pump prices jumping around between $2 and $3 a gallon, Trenton legislators should announce they are going to grab a nickel per gallon, do it and then move on. In short order, that nickel will be lost among fluctuating prices.

    Barring an economic cataclysm or a major war, the tunnel will be built, with groundbreaking planned for 2009. Its economic and social benefits will radiate throughout NJ Transit’s expanding rail network. The project will be two-thirds subsidized, but in 12 short months, the state has to come up with an airtight plan to pay for its share
    I personally hope this tunnel falls apart. Instead of New Jersey spending billions of dollars to take New Jerseyans to their jobs in New York, we can be giving tax incentives so the businesses come to the workers in New JERSEY! If corporations invested in Newark, Jersey City, Bayonne and all of the other northeastern New Jersey cities, we wouldn't need this New York tunnel.

    As I have asked in other threads - when will our politicians start working for New Jersey?
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    J.D. In last Sundays (April 29) Perspective section of the Star Ledger there was an article about Mayor Bloombergs transportation and environmental plan. The title was "Curbing traffic in N.Y.C. will help N.J. economy". This charge would be for workday access to central Manhattan, I dont work there so it doesnt affect me. It was interesting and made sense. It ended by saying "the congestion charge , designed to improve N.Y.s economy , will contribute to N.J.s economic success as well". If you can I suggest you read it. I would post it but I dont know how to. As far as merchandise at Liberty State Park in N.J. having N.Y. sales tax and N.Y. getting the money I think this park employee was busting your horns. I for one dont believe that for a second! I recently read N.Y. has more public debt than N.J.,we are 5th in the nation now behind N.Y., California, Mass, and one other state that escapes my memory at this point.
    Last edited by NJPRIDE; 05-02-2007 at 06:28 PM.
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    Quote Originally Posted by NJPRIDE
    J.D. In last Sundays (April 29) Perspective section of the Star Ledger there was an article about Mayor Bloombergs transportation and environmental plan. The title was "Curbing traffic in N.Y.C. will help N.J. economy". This charge would be for workday access to central Manhattan, I dont work there so it doesnt affect me. It was interesting and made sense. It ended by saying "the congestion charge , designed to improve N.Y.s economy , will contribute to N.J.s economic success as well". If you can I suggest you read it. I would post it but I dont know how to.
    Here is the article you are referring to -

    For whom congestion tolls
    Curbing traffic in NYC will help N.J. economy
    BY JAMES W. HUGHES AND JOSEPH J. SENECA

    Adoption of New York Mayor Michael Bloomberg’s comprehensive 25-year transportation and environmental plan, announced last week, would mean fundamental changes to the broad metropolitan economy, including New Jersey.

    The centerpiece of the proposed 127 initiatives is the establishment of an $8 congestion charge for cars ($21 for trucks) for workday access to central Manhattan. The goal of the charge is to reduce congestion and its many economic costs, improve public health and safety, increase the economic viability of the city, and generate significant revenues for important transportation investments, including a $3.6 billion contribution toward the proposed $7.2 billion second Hudson River rail tunnel linking New Jersey and New York.

    None of that is harmful to the Garden State, and in fact could boost the economy here as well.

    Today, Manhattan is the engine pulling the economies of the Connecticut, New Jersey and New York tri-state region, a role that New Jersey performed so ably during the 1980s and 1990s.

    The spillover economic benefits from a surging Manhattan are now crucial to New Jersey’s economy and office markets. The continued prosperity of New York City is a long-established pillar of New Jersey’s future economic success. Improved direct infrastructure linkages to Manhattan and reduced costs of congestion will help ensure this.

    But in an increasingly competitive global economy, there is no part of our region whose future is totally guaranteed, particularly as growing regional congestion produces sustained increases in the costs of doing business. Other nations and other states are furiously investing in the economic infrastructure of the future.

    Today’s successful global economy requires a comprehensive, multimodal transportation grid. If New Jersey and the tri-state region fail to invest in their component of that transportation grid, our region will cease to be a competitive player in the global economy.

    Thus, business as usual is no longer an option.

    The fiscal choices of the past — selecting current consumption over long-term investment and deferring costs to the future in order to minimize shortterm pain — cannot be the protocols of the future if the region does not want to be eclipsed on the global stage.

    Congestion pricing represents a dedicated and significant source of funding to make those public investments so necessary for private economic success.

    Critics, such as officials from the outer boroughs and the trucking industry, have immediately seized upon the congestion charge as regressive and likely to deter economic activity in central Manhattan. However, congestion charges, long championed by economists, have proven the opposite in major cities such as London and Singapore.

    There, charges have significantly reduced travel times and congestion, improved air quality and increased the economic attractiveness of the central business district. London and Singapore are now expanding global financial centers that have the potential to seriously challenge New York and northern and central New Jersey.

    A key response to the criticisms that the congestion charge will add to transportation costs is the realization that current (and projected) levels of congestion already impose large (and rising) costs on the economy. These costs take the form of enormous amounts of lost time, health and property damages from pollution, and deterred business and employment.

    Moreover, these costs are likely to be regressively distributed across income categories. A recent Texas Transportation Institute report estimated that the annual costs of highway congestion in the tri-state region were $6.7 billion in 2003, up 61 percent since 1996.

    This total was the second-highest of the 85 geographic areas covered in the report. If congestion costs continue to increase, the competitive position of the regional economy will worsen. Already, despite Manhattan’s resurgence, employment growth in the three states lags considerably behind the nation.

    From New Jersey’s perspective, the charge would add $2 to the current $6 toll to enter New York City by car via the tunnels and bridge over the Hudson River. The current inflation-adjusted equivalent to the original 50-cent toll that was charged when the Lincoln Tunnel opened in 1937 is approximately $7.25, not that far from the proposed $8 charge.

    So, in constant dollars, the increased toll would be just slightly higher than it was 70 years ago.

    And yes, the charge would increase the cost of travel from New Jersey into Manhattan for New Jersey residents and businesses, and divert spending flows that would accrue to other sectors of the economy.

    But the increase in toll revenues would be reinvested into the economy to fund new infrastructure. The higher toll would also provide a significant incentive to use public transportation. NJ Transit would benefit with increased ridership and revenues to complement its planned improvements in the quality and access of service to New York and the city’s high-paying jobs.

    We have estimated that New Jersey currently has a net benefit of approximately $29 billion in total personal income annually coming from New York City. That income bolsters New Jersey’s residential markets, state and local tax revenues, and the overall economy.

    Thus, the congestion charge, designed to improve New York’s economy, will contribute to New Jersey’s economic success as well.
    There are certain problems I have with this article. For one, although the headline says "will help New Jersey's economy", the article states - "could boost the economy here [New Jersey] as well." I find it very interesting how New York centric this article is. It doesn't talk about businesses moving into New Jersey and contributing to our economy directly - instead it merely mentions how New Jerseyans will be able to get to their jobs in Manhattan easier. We wouldn't need a second rail tunnel under Manhattan if we had a vibrant business community in Newark, Jersey City, Bayonne, and the other northeastern cities.

    I don't disagree that New York is currently the powerhouse of the region, but the thing is - why is New Jerseyans happy to just be the location of where people live? All the towns - such as Plainsboro, Princeton, etc - talk about rateables (entities or businesses that contribute to the tax base without contributing to increased infrastructure needs). Well - New York is getting all the rateables - while we get all the entities (citizens) that require more infrastructure. We get stuck with a limited tax revenue from citizens, while we need to build more schools, more roads, etc. New York meanwhile doesn't need to build more schools or hospitals - since they're attracting the businesses and people are merely commuting in from New Jersey. It's very lopsided and New Jersey's coffers are being sucked dry by New York.

    As far as merchandise at Liberty State Park in N.J. having N.Y. sales tax and N.Y. getting the money I think this park employee was busting your horns. I for one dont believe that for a second!
    It wasn't merely an employee - it was a regional director. I don't like to name names since I don't want to get him in trouble for telling me. I have discussed this with him several times.
    I recently read N.Y. has more public debt than N.J.,we are 5th in the nation now behind N.Y., California, Mass, and one other state that escapes my memory at this point.
    New York State or New York City? It may be New York City that I heard is in the black. New York City is the one that benefits financially form New Jersey, more than New York State.
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