Updated 12/15/02

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Plan for the Progressive Elimination of Parkway Tolls
and the Pay-Down of Parkway Debt.

This is in response to Senator John O. Bennett's request for additional information relative to his interest in our plan to eliminate Garden State Parkway tolls as per our meeting on Sept. 9, 2002. This plan is one of several such plans.


This is a plan in which everyone wins - The state wins by getting a plan which works to eliminate the massive Parkway debt while motorists win by getting a plan which works toward eliminating the costs and hazards of toll collecting.

Brief Summary

On January 1, 2003, the plan provides for a temporary increase of all tolls to 50¢ and the elimination of the hazardous Raritan toll plaza. This would result in excess revenues of $82 million to be applied to debt reduction.

On January 1, 2004, plaza tolls would be temporarily increased to $1, while ramp tolls would remain at 50¢, and the Essex toll plaza would be eliminated. This would result in excess revenues of $271 million to be applied to debt reduction.

In 2005, five more plazas will be eliminated leaving four plazas with tolls of $1 (candidates for the four remaining would be Hillside, Union, Asbury Park, and Egg Harbor). Half of the ramp plazas will be eliminated. This would result in excess revenues of $162 million to be applied to debt reduction.

In 2006 all tolls will be eliminated.

General Comments

This plan, of course, is only a structured outline. Details will be developed by a transition planning committee. Likewise, the massive debt, plus E-ZPass debt, which has accumulated over the past 50 years cannot be eliminated overnight by waving a magic wand. However, this plan addresses how the debt will be eliminated by 2006. Some bonds with a no-call feature will be replaced with pro-refunded bonds. Presently the parkway has budgeted $18.4 million annually for debt reduction - this amount would be additive to the debt reduction herein.

As tolls are progressively removed, there will be less and less need for Parkway administrative and collecting personnel associated with toll collecting. The plan allows for ample lead time so that down-sizing can be accomplished in an orderly manner. Surplus assets, such as the three story Parkway headquarters building, and furnishings, can be progressively disposed of, producing additional funds.

It is not anticipated that the plan will result in any layoffs as a result of a three step downsizing plan. Step 1 would reassign personnel to other available toll collecting openings, e.g. the NJ Turnpike. Step 2 would provide training for other jobs openings, while step 3 would provide out-placement services. In the event excess personnel still remain, adequate separation pay would be provided based on length of service. During the transition period, only part-time (temporary) personnel would be hired.

Questions may arise as to toll increases, however the size of the Parkway debt is a burden that motorists have to address. The increases, which will be dedicated to pay down the debt, can be compared to what was an open-ended mortgage, to one which now has a time limit of 2006! In addition, no additional debt may be incurred between this date and the ending of toll collecting.

Demolition costs will be minimal as the FHA will provide funds to keep lanes whole.

Without tolls, the Parkway becomes eligible for federal funds for capital needs. It should be noted that all estimated figures used are on the conservative side to allow for any downturn in revenues and also do not provide for growth in revenue. It is highly possible that revenues during this period will exceed forecasts due to traffic growth.

Ample lead time provides for any revenue shortfall which can be accommodated in the general budget. Such was the case for the Atlantic City tunnel ($300 million), the auto inspection system ($500 million), and the Rt. 80 bridge collapse.

Operational costs are cared for from existing revenue streams through income from restaurants, gas stations, etc. which presently total about $20 million annually. Imaginative planning can increase these revenue streams by at least 20%.

Added benefits resulting from the elimination of tolls are reductions in pollution, wasted fuel, wear and tear on vehicles, accidents (average 1.4 per day at plazas), fatalities (2 so far this year at plazas), and economic loss. Improvements in the quality of life will also result from the elimination of "plaza rage". (The Parkway presently exceeds environmental standards for pollution and global warming).

Data contained herein was obtained from the Parkway's Public Affairs Department in a letter dated Sept. 20, 2002. Where actual data was not available, such as for individual ramps, benchmark data was projected.

Citizens Against Tolls stands ready to meet with you to move forward on the plan and to answer any questions you may have. Plan details are attached hereto.

Raymond G. Neveil, President

Plan for the Progressive Elimination of Parkway Tolls
and the Pay-Down of Parkway Debt.

2001 Parkway Toll Revenues

Total plaza 35¢ toll revenues $151,000,000
Total ramp 25¢ toll revenues 44,000,000
Total 2001 toll revenues $195,000,000

Toll Elimination Plan - First Year (2003)

Temporarily increase all tolls to 50¢ and remove the Raritan Toll Plaza.

Plaza tolls will increase by $65,000,000 (42.8%) to a total of $216,000,000
Ramp tolls will increase by $44,000,000 (100%) to a total of 88,000,000
Total toll revenues at the end of 2003 $304,000,000
Less lost revenue from elimination of Raritan tolls (29,000,000)
Plus savings from 48 collectors, supervisors, and benefits 2,000,000
Total Adjustments (27,000,000)
Adjusted toll revenues at end of 2003 $277,000,000
Total toll revenues for 2001 $195,000,000
Difference between 2001 and 2003 toll revenues (applied to debt) $82,000,000

Elimination of tolls - Second Year (2004)

Temporarily increase plaza tolls to $1 and ramp tolls to remain at 50¢. Remove the Essex Plaza.

Plaza toll revenues $432,000,000
Ramp toll revenues $88,000,000
Total toll revenues at end of 2004 $520,000,000
Less lost revenue from elimination of Raritan and Essex toll plazas ($58,000,000)
Plus savings from 96 collectors & Supervisors. $4,000,000
Adjusted toll revenues at end of 2004 $466,000,000
2001 toll revenues were $195,000,000
Difference between 2001 and 2005 $271,000,000

Elimination of Tolls, Third Year (2005)

Plaza tolls remain at $1 and ramp tolls remain at 50¢. Remove five plazas and half of ramp plazas.

Estimated toll revenues $466,000,000
(same as 2004)
*Less lost revenue from 5 plazas ($70,000,000)
*Less lost revenue from half of ramp tolls ($44,000,000)
*Plus savings from less ramp collectors $5,000,000
Adjusted toll revenues at end of 2005 $357,000,000
2001 toll revenues were $195,000,000
Difference between 2001 and 2005 $162,000,000
*As tolls are phased out over the year, revenues are based on half of the income

Elimination of Tolls, Fourth Year (2006)

Remove all remaining Parkway tolls. No revenues projections have been made for 2006 as any remaining funds will be used to remove all remaining toll collecting installations and applied to debt reduction.

Surplus Revenue Summary (For Debt Retirement)

2003 Surplus $82,000,000
2004 Surplus $271,000,000
2005 Surplus $162,000,000
Total surplus at end of 2005 $515,000,000

Note: Debt repayment of $18.4 million is currently included n the Parkway budget and will further reduce outstanding debt accordingly. Current interest payments of $35.7 million annually will also be reduced and make additional funds available for debt reduction.