A debate over the legality of funding the Access to the Region’s Core (ARC) rail tunnel with toll revenues is raging in NJ. In order to secure federal funding for the project, NJ must demonstrate that it will have a $1.5 billion local match ready when construction rolls around (see MTR, April ’08: “Are NJ Funding Woes Threatening ARC?“). Finding all of the money has proved difficult in NJ – not a state known for either fiscal responsibility or financial daring.

The NJ Turnpike Authority has offered one funding source: increasing tolls on the NJ Turnpike and Garden State Parkway three times over the next 15 years. The increases would also cover debts and bondholder commitments, unsupported widenings of the toll roads, and a small amount of NJ Transit’s fuel costs.

State Republicans have called for a timeout, claiming that the Turnpike Authority’s authorizing statute (NJSA 27:23 -1 et seq.) only allows the allocation of toll funds for “highway projects,” i.e. just those directly and physically connected to the toll roads themselves. They point to section 5(g) of the statute, which reads (in part), “No toll revenues derived from the New Jersey Turnpike or Garden State Parkway shall be used or available for any transportation project other than a highway project.”

However, in statutory interpretation, as exact a science as astrology, the devil resides in the details. And the details here do not favor the Republicans.

The statute defines two types of projects, “highway projects” and “transportation projects.” A “transportation project” is basically any project that furthers the mission and goals of the Turnpike Authority. “Highway project” would seem to be a narrower category, but as defined this does not seem to be the case. The relevant section of the statute reads, in part:

“Highway project” means the [operation, construction, maintenance, and other functions] of the New Jersey Turnpike and Garden State Parkway… and shall include but not be limited to all bridges, parking facilities, public highways, feeder roads, tunnels, [14 other explicitly listed types of project,]… and other structures directly or indirectly related to a transportation project…

The state points out that the text of this definition actually connects the two, in effect nesting “transportation projects” in the “highway project” definition. Given the expansive list of projects that can be considered “highway projects” and its inclusion of projects “directly or indirectly related to a transportation project,” this is a reasonable conclusion. Furthermore, the statute specifically permits “transportation projects” to receive funding by toll or bond.

It appears that the final determination rests on whether the ARC Tunnel can be viewed as fulfilling the mission and goals of the Turnpike Authority, which are to maintain the efficiency and safety of the toll roads. If toll revenues are to fund the ARC Tunnel, it must be clearly demonstrated that traffic on one or both toll roads will drop as a direct result of the tunnel. According to NJ Transit, the ARC Tunnel will reduce trans-Hudson traffic by 22,000 daily car trips. Many of these will likely come from the overburdened Northern sections of the Turnpike, though it is unclear exactly how many.