New Government Report: New Jersey Transportation Fund Is Broker Than Broke

New Jersey's Transportation Trust Fund is coming up against its bond cap | Chart: New Jersey Office of Legislative Services

Years of borrowing and a failure to raise the gas tax for over 20 years has led New Jersey’s Transportation Trust Fund (TTF)—established in 1984 to fund transportation capital projects—to be engulfed in debt payments. Yet even with this transportation crisis looming, the state of New Jersey has not acted to shore up its long-term transportation finances. Instead, last year, Governor Christie announced a five-year transportation funding plan for the fiscal years 2012-2016 that has been widely criticized as unsustainable.

Now, a new Office of Legislative Services (OLS) report has given the patchwork funding plan’s critics even more credibility: the paper, composed by a nonpartisan government entity, outlines four unresolved issues for the future of New Jersey’s transportation funding:

  • The Transportation Trust Fund needs its bond cap raised: TTF legislative authorization to raise the bond cap is necessary before fiscal years 2013-2016 of the five-year plan can be completed. According to the TTFA funding plan for the fiscal year 2013, $986 million in TTF Authority bonding credit is needed to meet the year’s budget needs, but only $326.3 million in bond authority remains from the last reauthorization of the TTF in 2006.

    Chart: New Jersey Office of Legislative Services

  • There is a lack of dedicated revenues: The current five-year program relies heavily on general fund transfers without identifying new dedicated revenue sources. As a result, transportation funds are not protected against “redirection or reduction” and are subject to budgetary action each year. This means that funding from the general fund can only be assumed through the 2016 fiscal year.
  • New Jersey’s plan for its transportation network keeps capital program expenditures at their current levels: Since 1984, the TTF has never gone more than five years without increasing the size of the capital program. The current capital program keeps appropriation at a constant level of $1.6 billion/year for 10 years (2007-2016), instead of increasing it to meet the rising costs of projects.  Failing to increase the size of the capital program actually means that the state will be contributing less in real dollars to its transportation system because $1.6 billion in 2016 dollars is significantly less than $1.6 billion in 2007 dollars.
  • Funding is not assured after 2016: The five-year capital program’s funding comes from a variety of sources, including toll hikes from the New Jersey Turnpike Authority meant for the cancelled Access to the Region’s Core project and one-shots from the Port Authority of New York and New Jersey for certain projects. Neither of these two sources are permanent commitments that will last beyond 2016, which will leave a funding gap of at least $692 million. For the 2017 fiscal year and beyond, New Jersey will have to find a way to come up with new money simply to maintain current funding levels. Unless new dedicated funding is introduced, there will be an even heavier reliance on unstable, unpredictable general fund transfers.

6 Comments on "New Government Report: New Jersey Transportation Fund Is Broker Than Broke"

  1. Good story –

    Illustrates how CHristie’s ideological stance against both government and new revenues (tax or fees) harms the interests of the entire state of New Jersey.

    And not just transportation is at stake – cars and trucks pollute the air and cause NJ to fail federal ozone and fine particulate standards set to protect public health.

    Additionally, cars cause about a third of greenhouse gas emissions.

    We gotta get people out of cars and onto public transit – and that will cost money!

  2. tim sevener | April 27, 2012 at 8:06 pm |

    The reality is that New Jersey miles driven has declined by over 5% so why is Christie increasing highway spending by 12% for more highway expansion. The reality is we are in the age of Peak Oil and Limits to Growth – if you think $4 per gallon gas is high wait until it hits $6 and $7!
    Yet New Jersey should be the leader in Green Transit – we are the most densely populated State, more densely populated than China and we already have 996 miles of Rail.
    Yet since 2006 when former Gov Corzine cut Morris Line Hoboken weekend service by 50%, then cut Hoboken weekday service in 2008 by 30% and Gov Christie continued cutting 7 more trains in 2010 we are cutting trains on lines already built and paid for! We have the Boonton Line with no weekend and off-peak service, Gladstone Branch with 3 1/2 hour service gap from 5 to 8:30 PM weekdays, etc.
    The cheapest thing we can do is run the trains and make the best use of the capital spent on the Rail lines and cars.

  3. Who cares about the transportation fund in 2016? I’ll be running for President by then.

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