Expert says Newark airport tax would generate money for city

By Naomi Nix | NJ Advance Media for NJ.com
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on March 19, 2015

NEWARK — During his first state of the city speech, Newark mayor Ras Baraka talked about a number of ways the city could recoup more revenue through the Port Authority of New York and New Jersey properties in Newark.

NJ Advance Media talked to Columbia University economics professor Daniel O'Flaherty about the effectiveness of some of the potential methods for the city to generate money.

A tax on large storage containers that are brought in through the city's seaport

O'Flaherty: "That probably doesn't have a great economic impact: 5 to 10 million depending on how things go," he said. "That's been a favorite of people for about 10 years."

O'Flaherty continued to say five to 10 million is a lot of money and the final figure would depend on the amount of goods being shipped through the seaport.

A tax on passengers flying in and out of Newark Liberty International Airport

O'Flaherty: "There's been talk about it for about 30 years and the feds don't allow it," he said. "Passenger facilities charges for unrelated activities are not possible."

O'Flaherty continued to say the current version of the lease the Port Authority of New York and New Jersey has with the city says the agency must pay the city a fee that is proportional to its revenue collection. The Port Authority — like other airport operators — doesn't charge airlines per passenger it charges them when the planes land in the airport and for use of the gates.

"Newark collects a share on that so you could think of that as a tax," he said.

A tax on goods sold at the Newark Liberty International Airport

O'Flaherty said airports have a captive audience and passengers are not expecting a good deal on what they buy. Therefore, an extra tax on goods sold at the airport would be lucrative for Newark.

"I think it would be a good source of revenue if it were legally possible," he said. "I don't know how much it would be. There would be quite a few stores in there."

The Bayonne Bridge project

The project, which is slated to be completed by 2017, will allow larger ships to pass under the bridge. The Bayonne Bridge project is occurring because the Panama Canal is expanding which will allow bigger ships, particularly from Asia, to come to the East Coast, O'Flaherty said.

"Every port on the East Coast believes it will have a bananza as a result of this," he said.

But Newark's port is the biggest on the East Coast and therefore there will likely be gains in traffic and blue collar jobs in the city, according to O'Flaherty.

Finally, O'Flaherty said the mayor is right to focus on generating more revenue for Newark to address its budgetary problems.

"Revenue is the main issue," he said. "It's good that he's concentrating on the main issue."

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