NJ Toll Collection Privatization Update

Last December the New Jersey Turnpike Authority announced a request for proposals (RFP) from private firms interested in five-year contracts to provide toll collection services on the New Jersey Turnpike and Garden State Parkway. The Turnpike Authorityâ??s RFP includes several detailed requirements for private operators, such as retaining state control over toll rates and minimum $10-$12 hourly wages for employees.

The Turnpike Authorityâ??s privatization effort is motivated in part by an October 2010 audit released by the Office of the State Comptroller, which identified over $43 million in wasteful spending. In the audit’s press release State Comptroller Matthew Boxer says, “While tolls are going up, the Turnpike Authority is overpaying its employees, overpaying its management, overpaying for its health plan and overpaying for legal services.” More recently, State Transportation Commissioner Jim Simpson argued in an Assembly meeting that toll collectors are overcompensated with an average salary of $65,000 plus benefits making them nearly twice as expensive as toll collectors in neighboring states. (For more background on this story, see here.)

According to , in the past week International Federation of Professional and Technical Engineers unions representing toll collectors for both the Turnpike and Garden State Parkway have worked to thwart privatization. Local 196 (representing toll collectors on the Garden State Parkway) has been engaged in negotiations with the Turnpike Authority. Yesterday Local 194 (representing toll collectors on the Turnpike) submitted a series of concessions that were not publicly disclosed, though Local 194 president Franceline Ehret claims their concessions would save the Turnpike Authority $35 million over four years. (Edit: An Associated Press article published after this was originally posted says union concessions would only save the Turnpike Authority up to $12 million).

The Turnpike Authority will decide whether or not to pursue privatization when the agency board votes next Wednesday.

For Reason Foundation’s latest work on public-private partnerships and privatization in transportation, see Reason’s 19th Annual Highway Reportâ??which calculates New Jersey has the sixth least cost-effective roads in the nationâ??and Reason Foundation’s Transportation Research Archive here.