It appears as if NJDOT will dedicate less funding for road and bridge expansion projects than in previous years. But will this shift in priorities be short-lived?
The New Jersey Department of Transportation’s 2015 draft Transportation Capital Program, which lays out the agency’s planned transportation investments for all roads, bridges and transit in the state, dedicates a lot less funding for road and bridge expansion projects than in previous years. But will this shift in priorities be short-lived?
Two of 2014’s largest expansion projects—the Route 72 Manahawkin Bay Bridge, which received $36 million in the 2014 capital program* and Route 295/42 Direct Connect, which received almost $79 million in the 2014 program—are not in the 2015 proposed document, but will be in future capital programs.
TSTC reached out to NJDOT regarding the Direct Connect project and learned that because the agency funded earlier contracts in their entirety, the next contract is scheduled for 2016. In addition, according to the draft capital program, contracts for the Manahawkin bridge project will resume in 2016 at $22 million, with plans to spend nearly $145 million on the project from 2016-2024.
The silver lining is that the 2015 draft capital program shows what future capital programs could look like if NJDOT were to focus on maintaining existing assets and cut back on large-scale expansion projects. According to TSTC’s analysis**, there are nine road or bridge expansion projects comprising about 3 percent (approximately $54 million) of this year’s proposed capital program funds, as compared to nearly 10 percent ($185 million) of the 2014 program funds.
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As the clock ticks down on the Highway Trust Fund’s (HTF) solvency and the threat that the US Department of Transportation will slow down and lower reimbursements to state departments of transportation hangs in the air, the National Economic Council and the President’s Council of Economic Advisers have released a new report showing just how [...]
New Jersey Democrats tried and failed to pass a “millionaires tax” despite Governor Chris Christie’s promise to veto any tax increases. So why hasn’t there been a serious attempt to raise the gas tax?
New Jersey Assembly Transportation Committee Chair John Wisniewski, a proponent of raising the state’s gas tax, stated earlier this year that “until the governor shows a willingness to tackle the [transportation funding] problem it would be quixotic for Democrats to propose a tax that would face not only the governor’s veto, but his wrath as well.”
It’s a rational argument — why try when failure is certain? But the threat of the governor’s veto hasn’t stopped New Jersey Democrats from trying to advance other tax increases.
Governor Chris Christie has been very vocal about his determination to veto any tax increase that is sent to him, so it came as no surprise when he vetoed a tax increase on millionaires before signing the $32.5 billion state budget this week. What’s surprising is that legislators sent them to the governor anyway. In fact, Democrats in the legislature have tried on several occasions to pass a “millionaires tax” despite Christie’s inevitable veto.
So why have legislators stayed away from seeking a much-needed gas tax increase? It’s not as if legislators don’t realize the state has a transportation funding crisis.
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In March, MTR reported that the Highway Trust Fund (HTF), which is supported by the federal gas tax and which pays for almost all transportation projects across the U.S., is anticipated to run dry by the end of the month.
Unfortunately, with less than a month to go, the situation has changed little since March. In a recent letter to heads of state DOTs, Transportation Secretary Anthony Foxx termed it “dire”, and many local electeds would agree that that is the case.
Though an agreement has not been reached on how to fund the HTF, it is not for lack of proposals from our leaders:
Corporate Tax Reform
President Obama’s GROW AMERICA Act– the Administration’s surface transportation reauthorization proposal—calls for “pro-growth business tax reform” to fund transportation infrastructure. According to the Administration, this will generate $150 billion. Streetsblog has called thisa “progressive and thoughtful” proposal “dead on arrival, even though it had support from the Republican chair of the Ways and Means Committee, Dave Camp.”
Corporate Tax Holiday
Senate Majority Leader Harry Reid (D-NV) proposed a corporate tax holiday to fund the HTF. As The New York Times describes the plan, “American multinationals would escape taxes on 85 percent of their profits currently held in tax-deferred foreign accounts, provided they bring the money to the United States in the next year.”
The Times notes that after creating $20-$30 billion in two years, a corporate tax holiday would “lose money — by one government estimate, a simple tax holiday would lose $96 billion over 10 years — because the low tax rate would be applied to profits that would have been brought home over time anyway.” Senator Reid’s proposal is a bit more complicated than “a simple corporate tax holiday” – his office claims that the proposal is structured to earn $3 billion over 10 years. However, as The Times points out, these kinds of policies encourage “the hoarding of profits in tax-deferred foreign accounts in anticipation of future tax holidays.” The Obama administration has made it clear that it does not support Senator Reid’s plan.
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