At both a March 31 Assembly Budget Committee hearing and an April 13 Senate Budget Committee hearing, legislators have grilled NJDOT Commissioner Jim Simpson over the Christie Administration’s plans to fund transportation. What’s come to light so far has not been pretty.

The Transportation Trust Fund, which pays for most state transportation projects, was designed to be self-financing using state gas tax revenue. But because the fund has been borrowed against so heavily, and the state gas tax has remained flat since 1988, debt payments will engulf 100% of the revenues by this July.

Earlier this year, Governor Christie announced his 5-year transportation funding plan, which includes contributions from the general fund beginning with $76 million in 2012, increasing to $605 million in 2016.  Where will New Jersey find this money year after year without new revenue? Unfortunately, the question remained unanswered after both hearings.

Don’t even ask about life after 2016. During testimony before the Assembly Budget Committee, when pressed about funding sources 5 years from now, Simpson answered, “we will have to find new revenue sources after 5 years… user fees, taxes, toll increases.”  He didn’t explore the issue further, saying the conversation would be better had “3 years from now.” This sentiment was echoed during the Senate Budget Committee hearing in response to Chairman Nicholas Sacco’s line of questioning. Simpson said that “based upon history, something is going to have to give — cut spending or find new revenue.”  In the meantime, he insisted the current 5-year plan should be viewed as a “long-term solution.”

To an unprecedented degree, Gov. Christie’s plan relies on Port Authority funds for projects like the Pulaski Skyway, Wittpenn Bridge, and Routes 1&9 in Hudson County, diverting at least $343 million in PA funds each year for the next 5 years.  At its March board meeting, the PANYNJ passed a resolution (page 8) that authorizes its executive director to “effectuate the Port Authority’s participation” in these projects — or in “suitable replacement projects mutually agreed upon with NJDOT.”  However, sources tell MTR that this does not mean the PANYNJ has officially committed or approved funding for these projects. Both funding and project selection remain up in the air.

Simpson said “there is a true nexus” between the PANYNJ and these projects, which Gov. Christie is relying on to assure funding for these projects.  Senator Steven Oroho asked Simpson whether this was a one-time deal or whether Simpson saw similar future negotiations.  Simpson said he “sees this happening in the future as well.”

What about the $271 million bill from the federal government sent to Governor Christie for the money spent on the ARC tunnel?  Where does the DOT propose to find the money should NJ not prevail in its current lawsuit challenging the obligation to pay back the funds?  Simpson’s response was that “we are hoping we are successful.”

NJDOT Promises to Restore Transit Villages — Next Year

As reported in two prior MTRs, the 2012 Capital Program eliminates funding for the Transit Village program, which incentivizes municipalities to develop around transit, and which has been praised by Gov. Christie because it “spurs sustainable economic growth, maximizes the value of our transit investments and benefits the environment.” During separate testimony before both the Assembly and Senate Budget Committee, Simpson said the decision to defund this program was a “dumb thing to do” that was “sending the wrong message,” and assured committee members that funding would be restored next year.

Senator Barbara Buono, whose district includes Metuchen, a designated Transit Village, applauded the program and questioned the decision to eliminate funding, “What do I tell mayors who ask me where to find similar funding?” Simpson said he would direct interested municipalities to Local Aid. When Senator Buono pressed Simpson as to which specific programs,  he said he would contact her directly.

As to the status of this year’s funding, Sen. Buono said she was “sorry to see it go.”  But there doesn’t seem to be any reason why the program can’t be restored this year. Tri-State is not throwing in the towel.