As MTR has previously lamented, the main pot of money that feeds New Jersey’s transportation capital program, the Transportation Trust Fund, is expected to dry up by summer 2012.
At the TransAction conference in May, a Transportation Trust Fund Authority board member cautioned that the fund could run out of money much sooner than that, in 2010. NJDOT Commissioner Stephen Dilts has since promised that the TTF is financially stable, and will stay solvent until summer 2012. However, NJ’s slipping revenue collection and credit outlook could put the Fund under additional financial stress.
In 2006, Governor Corzine and the State Legislature missed an opportunity to put the Fund on solid ground. Instead, they chose to take on more debt to replenish the Trust Fund, saddling future generations with more debt instead of raising the gas tax, tolls, or other transportation fees (see MTR # 521).
That move set the Trust Fund on a course to have 100% of its state revenues, about $895 million a year, funneled to debt service starting in summer 2012. Recent numbers from the Transportation Trust Fund Authority illustrate the step-by-step stroll to bankruptcy. Of the $895 million, 78% and 85% will go toward debt service in 2009 and 2010, respectively.
Given elected officials’ inability to raise new transportation revenue in the prosperous year of 2006, the shrinking state budget (the budget passed in June was $2 billion smaller than in 2006) does not bode well for the future of the Transportation Trust Fund.
