Bond Raters Suggest A Toll Hike On Atlantic City Expressway In 2019
NEW YORK, NY (CBS) -- Drive on the Atlantic City Expressway? There's a suggestion from bond holders that tolls might have to go up to make sure those bonds are paid off. But not anytime soon.
Fitch Ratings, in a report to the South Jersey Transportation Authority last month, said current revenues on the toll road are fine. But that might not be the case by 2019.
It all comes down to covering payments on capital bonds. They need to make sure revenues come in at one and a half times the rate of the cost to cover those obligations.
"It's the promise to bond holders to basically maintain your contract to assure that they will be paid off," transportation analyst Tony Marino explained in an interview with KYW Newsradio. Marino worked for more than 2 decades at SJTA.
Fitch believes a hike of up to 50 percent might be needed by 2019, if current usage and toll revenue trends continue.
Marino doesn't necessarily agree. He believes the agency could cut costs or slow down improvements on the road or at the Atlantic City Airport. The local economy could even turn around.
But he does suggest a change at the agency.
"Local politicians and state politicians as well as some local private entrepreneurs who are calling on SJTA as a veritable cash cow to fund everybody's pet project in South Jersey, I think they need to understand that SJTA is not in the position to do that," Marino said.
For its part, the agency insists there are no toll increases planned in 2016. The last one, in 2008, saw tolls go up 50 percent.