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Whither the Discussion on New Jersey’s Transportation Trust Fund Debt?

nj-gas-tax-shrinkingThe legal term, Res ipsa loquitur, or “the thing speaks for itself,” posits that “one is presumed to be negligent if he/she/it had exclusive control of whatever caused the injury even though there is no specific evidence of an act of negligence, and without negligence the accident would not have happened.”

Under this legal doctrine, one could conclude that Governor Christie has been negligent in regard to New Jersey’s current transportation funding crisis.

New Jersey’s transportation funding strategy has been reliant on debt for some time, but the problem has become especially dire under the current administration. In 1984, Governor Tom Kean created the Transportation Trust Fund (TTF) with the intent to not only create a “stable and predictable” funding source for transportation projects, but also to keep that funding sheltered from the annual budget process. Under Governor Kean, 77 percent of transportation funding came from pay-as-you-go (PAYGO) financing, but when Governor Jim Florio took office in 1991, that percentage took a nosedive. This trend continued with each subsequent administration, and debt has become the primary source of funding transportation in New Jersey ever since. Today, under Governor Christie, PAYGO accounts for less than 3 percent of transportation financing.

It’s no wonder the state’s current five-year capital plan will run out of funding a year early. At a recent budget hearing in Trenton, NJDOT Commissioner James Simpson put the 2016 funding gap at $620 million with no funding source identified. A report issued by the non-partisan Office of Legislative Services warned that “if the size of the transportation capital program does not increase after 2016, it is possible that recent improvements that have been realized in the condition of the state of transportation infrastructure will be reversed.”

This pressure is further exacerbated by the $692 million funding gap expected in 2017 after the expiration of temporary Turnpike Authority and PANYNJ contributions.

But it doesn’t stop there.

Over the past few years, the PAYGO revenue from the Turnpike Authority has been used to plug General Fund deficits due to overly optimistic state revenue projections. In light of reports of this year’s $807 million revenue shortfall it appears additional revenue will also need to be identified for the General Fund to avoid more borrowing or cuts – something State Treasurer Andrew Sidamon-Eristoff has said the State would need to consider.

Which brings us to the gas tax. New Jersey’s gas tax – now the second-lowest in the nation since Wyoming passed a 10-cent gas tax increase in 2013 – has not been increased in 26 years and, when adjusted for inflation, is shrinking every year. Assemblyman John Wisniewski has long been a supporter of raising the gas tax, but is unwilling to push the issue unless the Governor would support it. Assembly Speaker Vincent Prieto has also been vocal about the need to raise New Jersey’s gas tax and says state leaders need to have an “honest discussion” about transportation funding. And State Senator Raymond J. Lesniak introduced S1865, which calls for a 15 cent gas tax increase over three years, the projected revenue from which would be roughly $750 million ($50 million for every 1 cent increase), but it barely makes a dent in the $1.23 billion that’s needed to service the TTF’s 2015 debt.

Unfortunately, the Governor’s continued inaction on identifying a sustainable transportation funding source ensures that current and future projects are in jeopardy.

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[…] behind it. It also makes clear that similar issues exist at the state level and likewise, must be addressed. While President Obama and the Senate Environment & Public Works Committee have released […]

orbit7er
orbit7er
9 years ago

It is utterly foolish for New Jersey NOT to take the benefits of an increased gas tax. New Jersey has the rest of the country “over an oil barrel” – whether traveling North South in the Northeast Megalopolis or East West along I80 and I78 freight trucks and others have to cross New Jersey or go way out of their way. By not increasing our gas tax we are denying the revenues we could get from all this traffic and ironically actually having to pay for the
increased maintenance for Interstate traffic crossing our State.
We should enact automatic rolling gas tax increases of about 20 cents until
it hits $1 per gallon and then invest that in Green Transit saving the millions for snow removal, potholes, and all the costs of Auto Addiction only transit options.

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[…] Jersey has once again literally paved the way for another lesson in legal terminology. Sua sponte, which means “of one’s own accord,” seems to accurately […]

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[…] there aren’t enough public works employees to keep up with patching the roads, and given the $807 million state budget gap, the town’s request for $2.5 million in state aid to reconstruct 19 streets likely […]

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[…] long term, New Jersey’s elected officials must find the stable revenue sources to address the Transportation Trust Fund crisis and prevent future fare hikes and service […]

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[…] next year will depend on the state’s ability to deal with a forecasted transportation funding shortfall and the will of Congress. Pennsylvania’s new transportation authorization can serve as a […]

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[…] New Jersey Governor Chris Christie – The governor signed a $32.5 billion budget for the fiscal year 2015 without addressing the state’s transportation funding crisis. […]

Ted L
Ted L
9 years ago

Come on, he’s running for President. What do you expect? and when the Pulaski funding farce plays out……………

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[…] Village program has garnered national acclaim and recognition, but the state’s budget woes and bankrupt Transportation Trust Fund dim the possibility of increasing the program’s $1 million annual budget allocation to meet the […]

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[…] be a “feel-good process done for appearances sakes,” said Speaker Prieto. “Nothing about our current state of transportation affairs should make anyone feel […]

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[…] new revenue streams to replenish the state’s Transportation Trust Fund. New revenue should be sustainable, long-term, dedicated, and not a source of one-shots or […]

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[…] statewide transit ridership increasing at such an encouraging rate, the state would be wise to prioritize a sustainable funding source for transportation projects. Thankfully it seems there is growing momentum to help push this issue in the right direction, […]

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[…] Governor Christie has repeatedly said about his plan to secure funding for New Jersey’s Transportation Trust Fund (TTF) after his current five-year plan failed pretty much right out of the gate. But what exactly […]

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[…] Governor Christie’s five–year Transportation Capital Program might have looked like his “best laid scheme” when it was announced in 2011, but something has clearly gone awry since then. Tri-State had little confidence that Christie could live up to his promise to pay for transportation with more cash and less debt without identifying new and sustainable revenue sources. And with each year that passed, that little confidence has disintegrated into a complete lack of faith. […]

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[…] plan in 2011. While it looked great on paper, without dedicated revenue to support it the plan was DOA. The entire plan, which was set up to rely less on debt and increasingly more on PAYGO, was […]

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[…] but problems with the TTF’s solvency have grown deeper with each passing administration since it was created in 1984. Governor Christie’s 5-year capital program promised more reliance on cash and less on debt, […]

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