The meltdown of the national subprime mortgage lending market sparked an economic recession that has created ripples across our entire economy, increasing everything from interest rates on loans, to the price of produce at the grocery store, to the price of a gallon of gas.
Amidst these national concerns, New Jersey also is wrestling with an austere state budget and a need for billions of dollars in funding to maintain our transportation network.
Fortunately, there is good news. We are doing what we can at the state level to help minimize the effect of the recession on New Jersey residents. We have cut $2.9 billion out of this year’s budget, making it only the fourth budget in the last 57 years that has spent less than the year before. Moreover, we are attempting to balance the budget while continuing to provide record levels of property tax relief, all without relying on a single new tax.
Even with all these efforts, our transportation network is still in need of a cash infusion if it is to stay viable.
The biggest problem facing our transportation network is that our state’s once-model Transportation Trust Fund (TTF) is currently running on the fumes of a five-year extension that was put in place to give us the time needed to create a permanent transportation funding solution.
Another very serious issue is that there is virtually no way to continue funding our transportation infrastructure at the levels necessary to maintain its health, safety, and federal matching funds without increasing revenues.
To address these problems, I have crafted a proposal that would fund our transportation needs for a generation while leaving the door open for a plan to significantly reduce state debt, all without severely impacting the state’s 5.9 million drivers.
In fact, my plan to fund the state’s transportation network can be financed in part starting with just 10 cents a day for the average driver.
It starts by adopting the first three elements of the Governor’s fiscal restructuring proposal, with some minor changes. Under my plan:
1. State spending would be frozen at 2008 levels, requiring between $2.5 billion and $3.5 billion in cuts to the budget;
2. Future spending increases would only be permissible when accompanied by a recurring revenue source, with further savings to be found by encouraging adoption of the remaining recommendations from the 2006 special legislative session on property tax reform; and
3. The state constitution would be amended to require:
1. any and all future borrowing to be approved by voters;
2. restrictions on the creation of governmental and quasi-governmental agencies with bonding authority so that voter approval of debt cannot be directly circumvented; and
3. restrictions on the length of newly issued debt so that the debt payments do not exceed the useful life of the capital improvements being funded.
This would put our own fiscal house in order. However, we would still need to finance the state’s continuing transportation needs, which would be accomplished through a combination of toll and motor fuels tax increases.
There are capital needs on both the New Jersey Turnpike and the Garden State Parkway. These needs should be met with modest toll increases on each roadway sufficient to pay for the necessary work.
To finance the state’s TTF, the plan would implement an 18-cent gas tax increase at a rate of 6 cents per year over three years, constitutionally dedicated to the TTF. Thereafter, the gas tax would be adjusted annually for inflation, based on the Consumer Price Index. It also would require increasing the rent for all toll road rest stop gas and concession stations, as well as exploring the possibility of selling or leasing the air rights along all three toll roads.
These measures would create a recurring revenue source in excess of $1.6 billion annually, which would allow the TTF to fund projects on a 60/40 split between pay-as-you-go and bonded revenue.
And it can all be accomplished starting with just 10 cents a day for the average driver. Fully implemented, my TTF proposal would amount to just 30 cents a day for the average driver – less than the price of a first class stamp. With just 30 cents a day we can fund our transportation needs in New Jersey for a generation.
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