Christie Proposes Five-Year Transportation Capital Plan

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Gov. Chris Christie

TRENTON – Gov. Chris Christie introduced a five-year capital plan for the state’s transportation infrastructure. The plan does not include any new taxes or tax increases. Instead, it continues to rely on borrowing, though more projects will be paid for on an “as you go” basis than under the previous plan crafted by Gov. Jon Corzine.

“Today, we are continuing to put New Jersey on the path towards fiscal health and proposing a sensible and responsible plan that prioritizes vital transportation projects, while limiting the already-heavy debt burden carried by the taxpayers of our state,” said Christie.

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“After years of mismanagement and the failure to soundly plan for New Jersey’s transportation future, we were left with an unacceptable situation – a system teetering on the edge of failure, without the ability to fund a basic, core function of government. Today, we begin to end that practice by putting forward a Transportation Capital Plan that meets our infrastructure needs and responsibly manages the debt incurred by taxpayers.

The Christie Plan over five years consists of cash contributions from the General Fund and the New Jersey Turnpike Authority, bonding and $1.8 billion in projects requested by the Governor to be undertaken by the Port Authority of New York and New Jersey in conjunction with the State Department of Transportation. As a result, the state will be able to provide $1.6 billion each year for five years for transportation projects throughout New Jersey, including $672 million for New Jersey Transit capital needs and $200 million per year for local government projects.

New Jersey Sierra Club Director Jeff Tittel was critical of the governor’s proposal. “It’s the same problem we have seen in previous administrations: borrowing money from other pots instead of raising the gas tax,” Tittel said. The environmental activist also lamented the governor’s decision to cancel the ARC tunnel project, which would have increased passenger rail capacity between New Jersey and Manhattan. Money from that project was reallocated to the governor’s new transit plan.

“Killing the ARC tunnel project to raid funds to replenish the TTF is irresponsible and bad transportation policy,” Tittel said. “New Jersey still needs a tunnel to New York City and a long term solution for transportation funding”.

Assembly transportation committee Chairman John S. Wisniewski (D-Middlesex) said, “The governor’s plan to keep the TTF afloat calls for issuing billions of dollars in new bonded debt, all without voter approval…. The governor’s plan to keep the TTF afloat calls for using Port Authority money that had been earmarked for the ARC project, which relies on the cooperation of New York’s governor and will likely result in higher tolls at Port Authority bridges, tunnels and transit….New Jersey residents – and especially motorists – deserve better.”

“The proposal presented by the Governor today begins to head in the right direction,” said New Jersey Future Executive Director Peter Kasabach. “It addresses the immediate need to replenish the Trust Fund, moves away from excessive reliance on debt and back toward the ‘pay-as-you-go’ model on which the fund was founded….

“This is not, however, a sustainable solution to the Trust Fund. At the end of its five-year timetable, it will leave New Jersey taxpayers burdened with a higher level of debt than they face today. It also relies on sources of funding that may or may not be forthcoming,” he said.

Others were pleased with Christie’s announcement.

“New Jersey’s residents and economy rely heavily on a safe transportation network. Maintaining our roads and transit system is of paramount importance to the people who live and work here,” said Assembly Republican Leader Alex DeCroce (R-Morris.) “The governor’s plan is a win-win and should be embraced for achieving the dual goal of investing in a critical need without increasing taxes or borrowing endlessly.”

“I certainly don’t envy the enormous budget difficulties this Governor faces,” said Sal Risalvato, executive director of the New Jersey Gasoline, Convenience, Automotive Association. “Though additional borrowing to cover the shortage in the Transportation Trust Fund (TTF) is not a lasting long-term answer, I do appreciate his creativity in offering a solution to the problem.”

“With Garden State residents already paying excessive taxes and fees, we applaud the Governor for reaffirming this promise today and saving state commuters an additional financial hardship [by not raising the gas tax],” Risalvato said.

The former transportation capital plan, which is about to expire, began in Fiscal Year 2007 and provided $8 billion ($1.6 billion per year) for transportation projects, including $200 million per year for local government projects. This plan relied on a stable $895 million annual General Fund appropriation that became almost entirely devoted to making debt payments, instead of funding current transportation needs. Ultimately, the only way to continue paying for projects was for the state to incur debt. As a result, the former plan allowed the fund to run dry, while nearly all the money spent on current projects was borrowed.

Over each of the next five years the Christie Plan will increase cash contributions used to fund transportation projects while at the same time decreasing the use of borrowing. The Christie Plan includes approximately $1.8 billion in “pay as you go” cash contributions growing from a nominal amount under the former plan to over $600 million by the end of the five-year term.

Over the plan’s five year period, the Christie Plan provides almost 37 percent pay as you go funding in contrast to the former plan’s five-year PAYGO composition of 10.6 percent.

The Christie Plan will include the sixth successive reauthorization of the Transportation Trust Fund. Trust Fund borrowing is backed by state appropriations from constitutionally dedicated revenue streams (from the Motor Fuels Tax, the Petroleum Products Gross Receipts Tax, and the Sales and Use Tax). Since the voters approved the constitutional dedications, there is no legal requirement for additional voter approval under the Debt Limitation Clause. Instead, the Legislature establishes bonding authority (i.e. authority to borrow up to a specified amount) and makes annual appropriations from constitutionally dedicated revenues.


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