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.
- 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.