Debt Makes a Jersey Comeback

New Jersey has announced plans to redirect $260 million in cash that was previously allocated towards the state's transportation needs. Above, the funding sources of the old transportation capital funding plan are shown next to those of the new one.

Grab the needle and thread—it looks like New Jersey is adding a new swatch to its patchwork transportation funding plan. In recent testimony before the Senate Budget Committee, State Treasurer Andrew Sidamon-Eristoff announced that $260 million of state funds, originally allocated to 2013 transportation projects, would now go to plug a revenue shortfall in New Jersey’s overall budget. The state will now need to borrow a whopping $1.2 billion to round out the second year of Governor Christie’s five-year transportation capital program funding plan. This completely eliminates what the governor once touted as his program’s chief benefit: increasing cash spending while decreasing debt.

This announcement comes barely a month after the state’s Office of Legislative Services released a report revealing just how bleak the future is for transportation funding in New Jersey. Assuming the adoption of the treasurer’s plan, 100% of the state’s transportation capital funding would be coming from debt and unpredictable “one-shot” fund transfers from other agencies, like the Port Authority of New York and New Jersey and the New Jersey Turnpike Authority.

While Sidamon-Eristoff said that this redirection of transportation funding was “a one-year initiative,” the maneuver undermines confidence that the state will continue to adhere to Governor Christie’s patchwork transportation funding plan in coming years, since it relies on increasing cash transfers from the general fund. From the start, the plan was criticized by Tri-State as unsustainable due to its heavy reliance on general fund transfers, one-shot revenue transfers, and its failure to identify new, sustainable revenue sources for transportation.

This development further complicates transportation funding in New Jersey past the expiration of Governor Christie’s five-year plan. In response to New Jersey Senate Budget Committee Chairman Paul Sarlo’s question about the future of the state’s transportation funding after Governor Christie’s program, New Jersey Department of Transportation Commissioner Jim Simpson reassured lawmakers that transportation funding in 2017 would start with at least $600 million in cash. With transportation funds already being raided in 2012, the state’s actions offer little reassurance that it will be able to provide transportation funding beyond 2016 without identifying new revenue sources.

New Jersey’s failure to identify new revenue sources has clearly put the future of its aging transportation system in jeopardy and threatened construction jobs. It is imperative that Trenton’s leadership demands answers to this transportation funding crisis now, not in 2016. Not addressing the problem only kicks the can down the road for the next generation.

2 Comments on "Debt Makes a Jersey Comeback"

  1. Where is gas tax revenue in that graph? Is it going entirely to debt service?

  2. Just think how bad NJ Transportation finances would be if the state continued construction on the ARC Tunnel, as Tristate wanted.

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