As toll hikes meet resistance, PA faces tough choice

New York /
Jul.July 26, 2012 03:00 PM

The Port Authority of New York & New Jersey is facing a difficult choice: forge ahead on unpopular toll increases or risk a lower credit rating. The Port Authority’s costs have been skyrocketing of late, as overruns at several development projects, most notably the World Trade Center Transportation Hub, have ate away at its budget. When it turned to bridge toll hikes to fund these projects last year, the American Automobile Association sued to overturn the increases, which it said could only be used for transportation projects.

“If all of a sudden the Port Authority were to decide to delay these planned toll hikes, then you put at risk the credit ratings for the bonds,” Phil Villaluz, head of muni strategy at regional bond brokerage Sterne Agee, told Reuters.

The Port had planned on raising tolls for motorists by 75 cents each of the next four Decembers and raising the PATH fare by 25 cents each of the next four years. There’s also a planned 45 percent increase in tolls for commercial vehicles on the New York State Thruway.

Without these increases, the agency’s credit rating would suffer, according to Moody’s. The Port has become increasingly dependent on revenue from bridges and tunnels, as revenue from airports is expected to decline over the next five years.

“Maintaining strong credit ratings is critical to financing the over $25 billion in capital projects we are executing over the next 10 years and the tens of thousands of jobs they represent,” a Port spokesperson said. [Reuters]


Related Articles

arrow_forward_ios
The vacancy rate for regional and superregional malls is at an all-time high.  (Getty)
Mall vacancy rate hits all-time high
Mall vacancy rate hits all-time high
CBRE CEO Robert Sulentic and One World Trade Center (CBRE, iStock)
Port Authority taps CBRE to manage WTC
Port Authority taps CBRE to manage WTC
(iStock/Illustration by Kevin Rebong for The Real Deal)
Office sector to keep sinking until 2024, Moody’s predicts
Office sector to keep sinking until 2024, Moody’s predicts
Silverstein Properties’ Larry Silverstein and Brookfield’s Brian Kingston (Getty/Illustration by Kevin Rebong for The Real Deal)
Port Authority taps Silverstein, Brookfield to build 5WTC
Port Authority taps Silverstein, Brookfield to build 5WTC
Douglas Durst of the Durst Organization, Port Authority Executive Director Rick Cotton, and Conde Nast CEO Roger Lynch. (Getty)
Condé Nast isn’t paying rent at 1WTC amid lease dispute
Condé Nast isn’t paying rent at 1WTC amid lease dispute
The bus terminal was built in the 1950s and designed to serve one fourth of the riders it sees today. (Getty)
Port Authority to raze, replace “hell on earth” bus terminal
Port Authority to raze, replace “hell on earth” bus terminal
More investors are factoring climate risks into their decision-making
Fire and rain and real estate: Investors take closer look at climate risk
Fire and rain and real estate: Investors take closer look at climate risk
TRD's Erik Enguist and Port Authority's Rick Cotton
Port Authority, out $3B, has waterfront land to sell
Port Authority, out $3B, has waterfront land to sell
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...