TRENTON — Gov. Jon S. Corzine’s administration has already spent about $7.3 million of taxpayer funds preparing his toll road plan, according to the Treasury Department.
The amounts include $3.9 million for law firm Skadden, Arps, Slate, Meagher & Flom, LLP, $1.6 million for engineering consultants the Halcrow Group, nearly $900,000 to Steer, Davies, Gleave, which studied traffic flow, and about $800,000 for lawyers at Hawkins, Delafield and Wood, LLP, Treasury spokesman Tom Vincz said Friday.
Up to $380,000 more could be spent on professional services if his plan goes through.
(And don’t forget the “roughly” 1% fees related to the actual offering – and yes: we’re talking roughly $380 million – and that’s a conservative “1%”)
Corzine hopes to raise up to $38 billion, through sharp toll increases, to halve state debt and fund decades of transportation projects. The costs of borrowing that much money could be up to 1 percent of the final deal, although Corzine aides have said they hope to keep it lower, possibly down to one-quarter of 1 percent. (too bad Governor Corzine has no credibility)
The toll plan could last up to 99 years under the draft legislation unveiled by Corzine’s office Monday. The 80-page bill says the deal, which would give control of the toll roads and toll revenue to a new, independent, nonprofit organization for 75 years to start, could be extended for up to 24 years more.
The plan calls for sharp toll hikes starting in 2010 and continuing every four years through 2022, and then inflationary increases later. The inflationary bumps would be at least 2 percent a year and capped at 5 percent a year, under the proposed legislation.
Corzine has proposed the deal as part of a large fiscal restructuring proposal. He has also called for limiting government spending and giving voters’ more oversight on public borrowing.
Assemblyman Richard Merkt, R-Morris, said, over time, the plan could give the new independent agency control of $196 billion in toll revenue. Merkt, citing an analysis by the nonpartisan Office of Legislative Services, said giving up control of so much money amounts to “stealing from future generations.”
“Given the enormous amount of money involved, the opportunities here for massive political corruption, fraud, waste, and mismanagement are unprecedented,” Merkt said in a news release.
Corzine has said there would be tight controls over the toll revenue collected by the new “public benefit corporation” that would run the roads. After the PBC pays its debt service, operational costs and funds projects on the toll roads, any excess money would come back to the state for other transportation needs, keeping “profits” in public hands, Corzine has said.
(Two thoughts: School Construction Corp., Transportation fund: both loaded with cash at the start, and close to bankrupt – with nothing to show for it)
Corzine and his aides have said there would be state oversight of the spending, some of which is spelled out in the bill. The PBC would be subject to federal accounting laws. Any information it gave to the state would be subject to public disclosure laws. Most types of contracts would be publicly bid. It would have 10 to 15 directors and would be subject to fines for failing to meet state-imposed standards.
Government would not have a direct hand in running the PBC, but a citizens’ oversight board, with seven members from government and eight from the private sector, all appointed by the governor, would vote on the directors of the PBC, giving some indirect say in how it operates.
Also Monday, Republican U.S. Senate candidate Anne Estabrook and Steven Lonegan, executive director of the conservative Americans for Prosperity, each announced advertising campaigns opposing the toll road plan.
On the other side, Corzine picked up his second endorsement from a sitting congressman as Rep. Rush Holt, D-Hopewell, backed the plan.
(Senator Holt – you’re next to go. Enjoy your last term!)
Jonathan Tamari: firstname.lastname@example.org