The End of the Port Authority – Next City

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The End of the Port Authority

Bridgegate Isn’t the Smoking Gun — Tolls Are

Story by Dax-Devlon RossTwitter

Photography by Alan Chin

Published on Mar 17, 2014

Yoel Weisshaus had a habit of chatting up toll collectors on the George Washington Bridge. At one point he even inquired about a job. Usually, though, the college student and holder of odd legal assistant jobs struck up conversation because he was short on cash and didn’t qualify for an E-Z Pass, since he didn’t have a bank account or credit card. The sticklers wrote Weisshaus tickets, but the compassionate ones waved him through.

“Even when the price was $6, it wasn’t easy on me,” said Weisshaus, a 32-year-old resident of New Milford, N.J., referring to toll prices prior to 2008. “It was $6 in gas, $6 going over the bridge. But I could manage it.”

In 2008, gas prices surged and the toll price ticked up to $8. The average middle-class commuter could shave a buck here or there and absorb the bump, but for a man getting by on minimum wage gigs, $2 represented a real cost with real implications. “I had to think about it and realize the impact it was having,” Weisshaus said.

He learned that yet another hike was on the way during one of his routine toll-collector encounters in August 2011. The new toll would rise to $12, including a $2 dollar penalty for cash users like him. Compounding matters, the tab would keep rising until, in 2015, it would hit $15, nearly double the minimum wage in New York and New Jersey. Weisshaus, a Bergen Community College accounting student — you may know him, in fact, as the Hasidic American Apparel model — did the math. Between 1967 and 2001 the toll had increased by 600 percent. Between 2001 and 2015 it would shoot up by 375 percent, outpacing consumer inflation nearly threefold.

What was driving such rapidly escalating costs? Barely three years had passed since the last toll hike and the country was still recovering from a financial collapse. Last fall, roughly 640,000 vehicles crossed the six Port Authority of New York and New Jersey bridges and tunnels daily, each forking over extortionate fees rivaled only by nearby MTA-owned bridges. All totaled, the agency’s bridges and tunnels alone produced upward of $500 million in profits each year.

Until then, Weisshaus hadn’t thought much about the agency collecting the toll. “It didn’t seem like a critical factor in my life,” he said. Once he started doing his homework, though, he stumbled across a Port Authority press release indicating that the tolls would subsidize a $33 billion capital campaign. It wasn’t bridges or roads that commuters would help pay for — it was the billion-dollar rebuild of the World Trade Center site.

“I got upset,” Weisshaus said. He was so upset he filed a federal lawsuit against the Port Authority.

He had no problem with the Port Authority rebuilding the World Trade Center. He just didn’t understand why it was his responsibility, as a commuter, to pay for it. The buildings wouldn’t change travel routines or make his ride any easier. Aside from being part of the agency’s vast and ever-expanding asset portfolio, the new office towers seemed to have little to do with moving people and goods around New York Bay — which, after all, is the Port Authority’s core job.

Eight days after Weishauss’ suit appeared on the docket, AAA of New York and AAA of North New Jersey raised the same question. On behalf of the chapters’ 2 million members, AAA filed a separate legal action against the tolling. While Weishauss’ claim centered on the amount he would have to pay, the nation’s oldest and largest auto association honed in squarely on the World Trade Center.

“The Authority is attempting to burden commuters and travelers with public expenditures that are in no way related to transportation,” AAA New York vice president Marta Genovese said in a statement announcing the suit. The lawsuit’s aim was to roll back the toll to the 2008 figure, a rate based on transportation needs that had nothing to do with trophy real estate in Lower Manhattan.

It wasn’t bridges or roads that commuters would help pay for — it was the billion-dollar rebuild of the World Trade Center site.

A bi-state agency with $37 billion in assets including New Jersey’s largest waste treatment facilities, seven ports and terminals, six extremely high-trafficked bridges and tunnels, three international airports, and the beleaguered 16-acre World Trade Center site, the Port Authority is a regional powerhouse on par with few others. It directly employs nearly 7,000 people and indirectly supports another 550,000 regional jobs generating $23 billion in annual wages and $80 billion in annual economic activity. Its shipping ports can reach 20 percent of the country’s people within eight hours. Looking beyond its practical functions, the agency — created by Congress in 1921 as a Progressive-era solution to political corruption — is a massive political machine, evidenced most recently by New Jersey Gov. Chris Christie’s Bridgegate scandal in which Port Authority traffic controllers were used to exact political revenge on the mayor of Fort Lee.

Indeed, if you live anywhere on the East Coast or buy any mass-produced objects that pass through there, the Port Authority is a part of your life — and more pointedly, a largely invisible line item in your budget. While most of us begrudgingly pay the tolls today, how will we feel in 2015 when the rates go up again? How about in 2021, when a new capital plan takes hold and there is another increase? How long will we will able to afford to keep the Port Authority?

“The Subsidizer Is Becoming the Subsidized”

At first glance, Weisshaus’ complaint against the Port Authority appeared utterly preposterous. He had no lawyer and no money. Not even one other bridge-and-tunnel commuter joined his crusade. His initial complaint — the toll restricted his constitutional right to freedom of movement — was flimsy at best. But he did have one thing going for him: genealogical chutzpah.

Yoel’s paternal grandmother, Gizella Weisshaus, was an Auschwitz survivor and the original plaintiff in a lawsuit against Swiss banks back in the 1990s. She accused the financial establishments of failing to return money and valuables deposited by her father during World War II. A successful merchant, he’d planned to use the money to rebuild after the war. But when he didn’t make it through, the banks refused to help Gizella recoup his deposits since she didn’t have an account number. Eventually, more than 3,000 other survivors joined Gizella in a class action suit to return wealth derived from Holocaust victims and Nazi plunder. She later made headlines for opting out of the settlement for ethical reasons and suing her lawyer, who was later disbarred, for theft. In early 2012 an appeals court dismissed the 82-year-old’s final complaint against her lawyers. By then, her grandson’s suit against the mighty Port Authority had appeared.

Yoel Weisshaus became the perfect foil for the Port Authority’s scheme. He spoke his mind yet supported his criticism with facts, dates and documents. When the agency slammed him in the press for owing hundreds in unpaid tolls, he justified his transgressions as the outcome of an unsustainable tolling policy that stemmed from mismanagement. Moreover, he had a story. His octogenarian grandparents relied on his visits to Brooklyn. Sure, getting to them by mass transit was an option, just not a realistic one. The commute took three hours each way and wound up, on balance, as expensive as driving his dented Subaru.

New Jersey residents like Weisshaus account for more than 55 percent of the Port Authority’s toll revenue. They get pinched every time they cross the Hudson to go to work, visit family or take in a show. In contrast, the average New Yorker’s contact with the authority tends to be more obscure and indirect, but no less expensive. At airports, the authority’s fees burrow into plane ticket prices, parking fees, shuttle fees, car rental fees, the bottled water you buy in the convenience store, and the car service that whisks you back to your apartment. Since virtually nothing sold in New York is made in the city anymore, locals also pay pass-through costs for all the goods and services they consume. To put it more succinctly: New Jersey pays the agency for access to New York, and New York pays it for access to the world.

Yoel Weisshaus brought a one-man federal lawsuit against the Port Authority after he realized that tolls on the George Washington Bridge will hit $15 in 2015.

Consider your iPad. It’s built in China and then placed on a ship bound for the authority’s Port Newark-Elizabeth Marine Terminal, the third-largest container port in the U.S. Once it arrives, the shipper offloads the container with the iPad and takes it to a warehouse or distribution outlet. Either way, a truck has to carry it across a Port Authority-owned bridge to get it to New York. The authority ostensibly gets paid twice for your shipment: Rental fees charged to the shipping company at the port, and a trucker toll at the bridge. Naturally, those costs are passed on to the consumer. Even if we buy a product online that’s flown in to JFK, the airline has to pay a fee to the Port Authority.

The agency’s ubiquity calls to mind Frank White’s dictum in the 1990 cult classic, King of New York: “Nothing goes down unless I’m involved. No blackjack, no dope deals, no nothing. A nickel bag gets sold in the park, I want in.”

When ratings firms like Moody’s and Fitch rubberstamp the agency’s sturdy credit rating or endorse its latest bond offering despite billions in outstanding debt and imminent capital expenditures, they cite its “near monopolistic control over critical transportation infrastructure” and its “High Degree of Rate-Setting Flexibility.” The banks that lend the Port Authority money do it with the understanding that if the agency is having a tough time with its bills, it can always ask for a few more shekels from the people who depend on its open lanes.

Which isn’t to say that the dependency isn’t an issue on more fronts than merely the political. Between 2007 and 2012, crossings on Port Authority bridges and tunnels declined by 8.5 percent. In the two months after the 2011 hike, roughly 890,000 fewer cars (4 percent) crossed the Hudson River. Meanwhile, ridership on the PATH commuter train between New Jersey and Manhattan bumped up by 560,000 (3.7 percent) during that same two-month stretch.

Although the authority’s 2008 toll hike provoked a similar reaction before stabilizing, the year following the 2011 hike was on pace to set records. A 4 percent rise in ridership between January and July 2012 led to estimates that PATH would see more than 78 million riders by the year’s end, a number it may have reached had it not been for Hurricane Sandy. The trend held true for MTA crossings and subways as well. Over the five-year span, MTA bridge and tunnel use sank by 7 percent while city subway use climbed by 0.8 percent. More riders used the subway in 2012 than they had in 62 years. On October 24, the MTA shattered its single-day ridership record with 5,985,311.

In theory, this is the world we all hope to live in. More mass transit riders means less fossil fuel dependence, a smaller carbon footprint and a healthier environment, not to mention less traffic on the streets and a greater quality of life. But for the Port Authority, the migration of the bridge-and-tunnel crowd to the subways is nothing short of an existential crisis. As AAA spokesperson Robert Sinclair put it, “The real problem is that the subsidizer is becoming the subsidized.”

Back in August 2011 no one in Manhattan, Trenton or Albany wanted to talk about the Port Authority’s delicate financial condition. It was the eve of the 10-year anniversary of 9/11, yet the memorial museum still wasn’t finished. (It would wrap up on September 12 of that year.) One World Trade Center, the most expensive skyscraper ever built in the U.S., had just two tenants — the second of which, Condé Nast, had only signed on after the authority agreed to take over its midtown lease for the remaining five years. The PATH station reconstruction, anchored by an exquisitely over-budget Santiago Calatrava corridor, had long since hit the realm of embarrassingly expensive. Concrete and carpenter unions had walked off the job on two separate occasions in early August and were threatening a full-on strike if they didn’t get new contracts.

With so much debt already on its books, cost overruns at every turn, unions breathing down its neck and the ratings firms busy downgrading U.S. credit for the first time in history, the agency faced a choice: Risk its own financial stability, or that of the faceless millions like Yoel Weisshaus who relied on the bridges and tunnels to carry out their lives.

New Jersey pays the agency for access to New York, and New York pays it for access to the world.

By early September the unions owned handsome new contracts and Port Authority toll collectors were prepping for the impending hike. A week after the new rates went into effect the authority announced a $1 billion, 40-year bond sale to finance construction at Ground Zero. When the dust settled, the agency owed bondholders more than $30 billion and was paying well more than $800 million a year in interest fees alone. Bondholders owned first liens on the agency’s reserve fund and all income from its transportation network. Anyone who bothered to put one and one together could see who’d been selected to pick up the tab.

Weisshaus and I spoke in late 2013, shortly after his latest appeal to the Supreme Court had been denied. He said he was finalizing an amended complaint for resubmission to the District Court by the end of the month. All in all he and the Port Authority had been at it for more than 25 months. They had submitted a combined 162 court documents and each entered multiple court appearances.

“To be honest, they won’t let me go with that lawsuit too far,” acknowledged Weisshaus, whose first language is Yiddish. “I have been going with it further than anyone could have imagined. I’m pro se going against a big agency. I’m faced with a lot of restraints. But I wanted my grievance to be in the public record.”

AAA also remains embroiled in its lawsuit, with the Port Authority battling to block the release of internal communications leading up to the 2011 decision to increase the rates. “The Port Authority is a public agency, but it doesn’t feel it has to answer to the public,” Marta Genovese, AAA New York’s vice president and in-house counsel, told reporters earlier this year.

A Drop in the Bucket

Tullo Truck Stop sits on the westbound side of U.S. Route 1-9 Truck in Kearny, N.J. It’s a full-service 24-hour truck stop complete with convenience store, weigh station, a lounge with WiFi and plenty of parking for truckers who need to catch some shuteye. For less than $15 you can wash your clothes, grab a shower (though the hot water may not work) and eat some decent arroz con pollo at the diner. If you’re in a hurry or don’t fancy Latin American food, there’s a Subway restaurant.

On the mid-December day I visited Tullo, I watched dozens of baggy-eyed, caffeinated men spanning the age and ethnic spectrum — though most of them were Latino — pump gallon upon gallon into the hulking machines with which they plied their trade. Others milled around the parking lot, oblivious to the deafening rumble of their respective rigs.

The Port Authority-owned Port Newark-Elizabeth Marine Terminal is a nine-minute drive south of Tullo. Thousands of the trucks that line up at the ports to receive a container are bound for New York City, Long Island and Connecticut. Those trucks have two options to complete their task: Take the 1-95 toll road, better known as the New Jersey Turnpike, or the older, slower 1-9 Truck. Either way, they have to cross the George Washington Bridge. Trucks account for 86 percent of all freight moving through the New York metropolitan area — twice the national average — and roughly 20 percent of the bridge’s 280,000 daily crossings. Exactly two weeks before my visit, another $8 to $10 had been added to each trucker’s toll. Depending on the size, time of day and whether the driver has E-Z Pass, the largest trucks now pay between $69 and $102 just to cross the Hudson River. By 2015 that figure will have reached $126.

“People always talk about the cars,” Sinclair, the AAA spokesperson, noted in our conversation, “but the truckers are being gouged.”

New Jersey Gov. Chris Christie canceled a trans-Hudson rail tunnel and diverted the money instead to his state’s Department of Transportation, which used the funds for repairs on the Pulaski Skyway.

Jimmy Gathers is one of those truckers. Tall, broad-shouldered and with hands that seemed to swallow mine when he took off his gloves to greet me, Gathers looks like he could have played defensive end for the Giants 20 years ago. Now in his late 40s, Gathers, like three-quarters of the port truckers, is in business for himself. And like all of his peers, he’s feeling the brunt of the hike.

Self-employment may sound like the American Dream, but when it comes to trucking, and particularly port trucking, it’s anything but. Independent truckers like Gathers net an average of $28,000 a year, which in a 12-hour day amounts to less than $10 an hour, according to a 2009 report from Demos, a D.C. think tank.

A typical port trucker makes two or three 70-mile trips per day and spends roughly $5,000 on monthly expenses including repairs, maintenance, road taxes, health insurance, truck insurance, traffic fines, radio bills, gas and, of course, tolls. Put differently, one Port Authority toll could erase a trucker’s entire daily profit.

Gathers wouldn’t tell me exactly how much he made, so I asked him if he was middle class.

“What do you consider middle class?” he asked.

“Forty or fifty thousand,” I answered.

Gathers shook his head. He must not have been middle class, he told me. He looked around and said that he didn’t believe anyone else at the truck stop was either, for that matter.

“It’s hard,” the trucker said when I asked how the toll increases were affecting his bottom line. “We have to pay for everything. We get no help.”

After Gathers wheeled out of the truck stop, I was left staring up at the decrepit Pulaski Skyway a half-mile to my north. Back in 2010, Christie had nixed a trans-Hudson rail tunnel that would have connected thousands of New Jersey commuters from Secaucus Junction to New York-Penn Station. The rail, he said, would have saddled New Jersey with 70 percent of the construction bill and cost $3 billion more than estimated. Two years later a U.S. Government Accountability Office report discredited both of the governor’s claims, but by then the Port Authority, at Christie’s behest, had forked over $1.8 billion earmarked for the commuter rail to the New Jersey Department of Transportation, whose road repair fund was drowning in debt from billions in its own bond issues.

NJDOT put those funds toward fixing the Pulaski. Unfortunately for Gathers, truckers can’t use the Pulaski. To get from the Port Authority-owned port to the Port Authority-owned bridges (Goethals, Bayonne, Outerbridge and George Washington), trucks have to take the turnpike or the Hackensack River Bridge a half-mile east of Tullo.

“People always talk about the cars, but the truckers are being gouged.”

In fairness to the embattled New Jersey governor, he was merely carrying on a tradition. The Pulaski renovation was hardly the first non-Port Authority project paid for with Port Authority toll money. Route 80 in New Jersey, the Verrazano-Narrows Bridge in Staten Island, and the Throgs Neck Bridge connecting Queens and the Bronx were each built with authority revenues in the 1960s. In the 1980s, former New York governor Mario Cuomo and New Jersey governor Tom Kean directed billions in Port Authority money to community development projects in Newark, the South Bronx and elsewhere that were at best marginally transportation-related.

Then there was Ground Zero. “Every dime that was spent to build the World Trade Center was assessed in the Port Authority Board room as a New York contract for which the New Jersey members wanted equal value,” former New York governor David Paterson told WNYC back in 2012.

All things considered, Christie could rightfully argue that the Pulaski money was a drop in the bucket compared to what the authority had already been spent on New York soil.

Who Should Pay?

“It makes me mad that people who work at a mall can’t get to work and the authority treats it like it doesn’t matter,” Jonathan Peters told me as he drove through an Outerbridge Crossing toll lane en route to the College of Staten Island, where he teaches finance. Peters, who also holds a post at City College’s University Transportation Research Center, specializes in studying the negative impact tolls have on local economies — Staten Island’s in particular.

“We should have a much more open discussion about who should pay and who should be a beneficiary,” he said of the authority’s tradition of spreading losses to everyone rather than exclusively among those who use the money-losing facilities.

A year ago, Staten Island Assemblywoman Nicole Malliotakis forced the Port Authority to hand over an economic impact study on her borough’s Howland Hook Marine Terminal. In 2011 she had filed an amicus brief in the AAA case asserting that the tolls violated the Commerce Clause by hampering Staten Island’s local economy, but didn’t have the proof to back it up. She figured the impact study might provide the ammo she was looking for.

After getting her hands on the study Malliotakis handed it off to Peters, who ran his own data analysis. His findings contradicted the Port Authority’s assertions by offering the first hard evidence of tolls causing economic hardship on Staten Island. Truckers heading to and from the Howland Hook terminal spent $83.34 on the 20-mile trip, 144 percent more than the national average. The data didn’t make a direct link between tolls and shipping revenues, but Howland Hook typically does only a fraction of Port Newark-Elizabeth’s business despite its New York City address.

“Anybody thinking about setting up a new factory looks at us and says, ‘That’s a big cost, especially if you’re moving cargo or goods,’” Peters said. “You look at the prices and you say, ‘You can’t be here.’”

Malliotakis has since handed Peters’ findings over to AAA. Whether they demonstrate enough of an impact on Staten Island to trigger a Commerce Clause violation and cause the Port Authority to roll back the toll increases remains to be seen. What’s clear is that it may not really matter in the long run. The freight industry already appears to be responding to the tolls.

Between 2007 and 2012, truck traffic on the bridges dropped by 13 percent. With New York City expecting to add about 700,000 people by 2040, this could be the beginning of a legitimate economic issue. Those new residents will need housing, food and jobs. They will want goods and services delivered to their groceries stores and doorsteps. But if companies have to pay an additional 200 percent just to move goods across the river — a conservative projection at the current pace — and New York ports remain structurally uncompetitive, living costs for the average New Yorker could choke the city’s economic vitality. At some point the authority’s economic model, one it has always proudly called “self-sustaining,” will become unsustainable. Then what? The tolls go up to $25 or $30 to satisfy bondholders? The authority is forced to sell off assets to pay back the banks? The bridges and tunnels get privatized?

According to AAA spokesperson Robert Sinclair, the situation at the Port Authority is a case of “the subsidizer becoming the subsidized.”

“The Port Authority should be broken up,” Peters said when I asked what he thought should be done to turn things around. “People should pay for the services they are provided. The people who want bridges, shipping, airports, mass transit should pay for it. That way the authority can focus on providing the services.”

He went on to offer a kind eulogy to an agency that once merited its Progressive-era pedigree. “They had a program and facilities that were 50 years ahead of our needs,” he said. “And then they got involved in WTC the first time. Yes, they adapted to new technologies — the container port in 1968. But I’m 51. I’ve lived in and around New York City all my life and I’ve never seen any new infrastructure. The way it is today is the way it was 50 years ago.”

As Peters and everyone else I spoke to pointed out, the early Port Authority earned its stripes. When train executives repelled the authority’s attempts to rationalize the railroads into a cooperative network in the 1920s, it evolved itself into bridge- and tunnel-building juggernaut to facilitate the coming automobile age. In 1931 alone the agency completed the George Washington and Bayonne bridges, both under budget and both months ahead of schedule. After World War II, it convinced officials on both sides of the Hudson to hand over their airports, bus terminals and piers for a song, and then turned them into world-class transportation hubs. At different junctures in its first 50 years it outlawyered Franklin D. Roosevelt’s administration, outlasted the airline giants and outplanned the titan of transportation himself, Robert Moses.

Now, however, those past feats of glory are propping up its existence. In this regard the Port Authority is a victim of its own successes. It did and does make money — too much for ambitious governors looking to fund big projects without raising taxes to leave untouched. But that constant dipping into the pot has created entrenched practices, policies and people reliant on drivers to subsidize gaudy projects that have nothing to do with moving around people and their stuff. Worst of all, the arrangement upon which the entire house of cards has been erected may already be collapsing under the weight of debt and shifting transit patterns.

In early February I caught an unexpected glimpse of the old Port Authority. An overnight snowstorm had buried roads, disabling much of the New York area. Schools across the region were shut down and train services were delayed or suspended. Governors Cuomo and Christie issued state of emergency alerts, and New York City’s Office of Emergency Management advised people to stay off the roads.

I wasn’t so lucky. A meeting in the city was still a go, so I dug my way out of my driveway and puttered along a series of shoddy roads, just hoping that I didn’t slide into a ditch. As I neared the George Washington Bridge, a pit formed in my gut. I braced myself for closed-off lanes and a sea of taillights inching across a sheet of ice. When I got to the bridge the Hudson had indeed disappeared in a white fog, but the driving lanes were pristine. Not a spec of snow. It was a humble, dutiful accomplishment — the Port Authority at its best. Not building another office tower, not buying another airport, but clearing a grand old bridge for safe passage on a snowy day. For that I gladly paid my toll.

Our features are made possible with generous support from The Ford Foundation.

Dax-Devlon Ross is the author of five books and has written essays and articles for a range of publications, including Time and the New York Times. He is a non-profit higher-education consultant and the executive director of After-School All-Stars NY-NJ. You can find him at daxdevlonross.com.

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Alan Chin was born and raised in New York City’s Chinatown. Since 1996, he has worked in China, the former Yugoslavia, Afghanistan, Iraq and Central Asia. Domestically, Alan has followed the historic trail of the Civil Rights movement, documented the aftermath of Hurricane Katrina and covered the 2008 presidential campaign. He is a contributing photographer to Newsweek, the New York Times and BagNews, an editor and photographer at Newsmotion and a photographer at Facing Change: Documenting America (FCDA). Alan’s work is in the collection of the Museum of Modern Art.