Transportation Trust Fund Problem Needs Long-Term Solution

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Last week Governor Christie announced his solution to replenish the dwindling Transportation Trust Fund (TTF), which is projected to be insolvent by June 2011.

That solution – refinancing the fund to generate up to $800 million will cover costs for one more year. This quick fix does not solve New Jersey’s transportation problem, but pushes it off until next year.

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AAA Clubs of New Jersey represent more than two million motorists on New Jersey’s roadways, which continue to fall further into disrepair because the TTF continues to fall short. As advocates for New Jersey motorists, AAA believes that the only long-term solution to this problem is a stable, sustainable funding source. It is our hope that this year’s refinancing is merely an interim measure to allow for a serious conversation between the Governor, the Legislature and the public about how we can best achieve that.

For more than a decade AAA has conducted biennial surveys to gauge opinions on a variety of issues, including road conditions and transportation funding. Unsurprisingly, this year’s study found that few drivers (5 percent) believe their commute has gotten better over the last two years.

The perception of road conditions is a major factor in the commuting experience. Over the last seven years our survey has found that the poor rating for local roads continues to grow – up to 20 percent in 2009. Local governments depend on funds allocated from the TTF for repairs; the dwindling pot leaves little for local roads.

AAA has proposed a variety of options when it comes to creating a stable, sustainable funding source. The first option is always an unpopular one – raising the gas tax.

While unpopular, it should be noted that not only does New Jersey have one of the lowest gas taxes in the nation, but most residents believe it is much higher than its current 10.5 cents. A 2005 AAA survey found that a majority of motorists (61 percent) believe the tax is 15 cents or more, followed closely (45 percent) by 25 cents or higher. Raising the gas tax to the level at which most people already believe it is would go a long way to solving the funding problem. Given the current economic climate, AAA understands that a gas tax may not be feasible, which is why we have proposed alternative methods of funding:

Restore some original funding to the TTF, including:

  • New Jersey Turnpike Authority and South Jersey Transportation Authority: $24.5 million.
    – Less than half of that has been deposited in recent years.
  • Heavy Truck Fees: $30 million.
    – Zero since 2002.
  • Good Driver Surcharges: between $48.5 and $80 million.
    – Zero since 2001.

Constitutionally dedicate MVC fees to the TTF.

  • MVC collects $1.1 billion a year from motorists, with slightly more than a third going towards its operations, the remainder goes to the general fund.
  • These are fees paid by drivers for the privilege of driving and if any funds properly belong in the TTF, these most certainly do.
  • Even if only $500 million of those MVC dollars are dedicated to the TTF, it’s roughly equal to an 11-cent gas tax increase, all from existing funds that motorists already pay.

Stop using TTF money for salaries, overhead and operational costs.
The TTF should be used to fund needed infrastructure projects, not everyday DOT operations.

Index the gas tax to inflation
The current gas tax has not been raised in years, by indexing it to inflation it would at least guarantee minor increases in revenue as costs rise.

Each of these solutions represents real money that has been lost to the TTF over the last decade. Restoring these funds to the TTF should be the first step in creating a stable, sustainable funding source to ensure that our transportation infrastructure can support all of New Jersey’s motorists.

New Jersey cannot continue to refinance its way into solvency – we must have an honest, serious discussion with the public about how to fund our transportation infrastructure. AAA looks forward to working with the Administration and the Legislature in finding a solution to create a stable, sustainable funding source.

Fred Gruel
Chairman, AAA Clubs of New Jersey
President & CEO, AAA New Jersey Automobile Club


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