“The future is going to happen.”

That was NJDOT Commissioner Jim Simpson’s response when asked how New Jersey is going to fund transportation in the years following the expiration of Governor Christie’s 5-Year Capital Program. “About a year to 18 months before the end of the program [FY2016] is when everyone needs to get engaged,” Simpson explained at Wednesday’s Senate Budget Committee hearing. But starting the conversation then may be too little too late.

In 2011, Governor’s Christie introduced a 5-Year Transportation Capital Program which, over the course of the program, was designed to decrease reliance on debt — something Governor Christie had criticized former Governor Corzine for exacerbating during his administration.  Tri-State had been leery about the ability of the State to fund the plan from the get-go, calling for the identification of a sustainable revenue source at the outset of the plan.  However, due to a lack of political will, that conversation has yet to happen in Trenton.  As a result, New Jersey continues to pay for transportation with new debt.

This year’s planned $375 million in PAYGO is being replaced with a one-time shot of $250 million from higher than expected proceeds for previous years’ transportation bond sales (premium bonds) and an emphasis on advancing capital projects with a higher share of federal funding.  Both slight-of-hand moves may prove detrimental to New Jersey. No analysis has been released showing how the sale of these premium bonds will affect future debt payments. All that is known is that taxpayers will be stuck footing the bill.  (Also, advancing projects based solely on funding source seems like a haphazard approach to transportation planning.)

“Are we going awry?” asked Budget and Appropriations Chair Senator Paul Sarlo as he emphasized that $702 million of expected PAYGO has been replaced with debt. Commissioner Simpson instead held legislators in suspense as he deferred the answer to State Treasurer Andrew Sidamon-Eristoff who will be testifying Monday in front of the same committee. Sarlo, who supports an increase in New Jersey’s gas tax (which has remained unchanged since 1988 and is the third lowest in the nation), further pressed Simpson about funding alternatives, to which the Commissioner responded, “borrowing has to be a big part of it.”

Compounding the reliance on debt and gimmicks is that New Jersey’s revenues continue to fall well below projections. According to David Rosen from the nonpartisan Office of Legislative Services, Governor Christie’s revenue projections for the remaining three months of the current budget year remain overly optimistic, resulting in a $637 million shortfall by the end of the coming budget year that begins July 1. Given that the intended PAYGO next year is $490 million, New Jersey may once again struggle to fund transportation projects — especially if Governor Christie diverts PAYGO toward plugging general fund holes for a third consecutive year.