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Budget Stalemate Threatens 2018 Transportation Projects Worth $4B

As governor and Democratic leaders remain at odds over state budget, $4 billion in Transportation Trust Fund spending also hangs in the balance

Christie TTF
Credit: Governor's Office/Tim Larsen
Governor Chris Christie on Tuesday met workers at an Interstate 95 project in Mercer County that is being funded by the Transportation Trust Fund.

Gov. Chris Christie and lawmakers remained in a stalemate yesterday over the next state budget, moving another day closer to the date when the state constitution would require a government shutdown if no deal can be reached.

But also hanging in the balance as the wrangling over the annual budget continues in Trenton is nearly $4 billion in Transportation Trust Fund spending that has been proposed for the 2018 fiscal year.

Since each fiscal year’s TTF program is typically approved along with the annual appropriations act, if the budget stalemate persists into July, the FY2018 TTF spending would likely have to be put on hold until a new state spending plan can be passed.

The threat that the budget standoff poses to the TTF spending comes even as Christie has been holding a series of events at TTF-funded projects in recent weeks to highlight ways those projects are helping to improve commutes and at the same time boost the state economy. It also comes on the heels of last year’s messy gridlock over the renewal of the TTF, which saw a prolonged shutdown of state-funded transportation projects as Christie initially resisted, but then ultimately agreed to pass, a 23-cent gas-tax hike.

Confident things will work out

And while this year’s budget talks right now are being snagged by proposed legislation involving changes Christie is seeking to force on Horizon Blue Cross Blue Shield, New Jersey’s largest health insurer, legislative leaders said yesterday they are confident the differences can be worked out, and that TTF projects won’t ultimately become a tool to coax votes from any holdouts on the budget.

Under an eight-year TTF reauthorization that Christie signed into law last year along with the gas-tax hike, annual state spending on road, bridge, and rail projects was boosted by $400 million to $2 billion. The state funds also draw a significant federal match — though it’s not always on a dollar-for-dollar basis — pushing the estimate for total spending on New Jersey transportation projects near $32 billion over the life of the eight-year reauthorization. In fact, lawmakers earlier this year passed a $400 million supplemental appropriation to ensure the full $2 billion in state dollars for the 2017 fiscal year would be spent before that fiscal year closes on June 30.

The state Department of Transportation has also already drafted a TTF capital plan for the 2018 fiscal year that calls for another $3.67 billion in TTF spending, counting both state and federal dollars. But now, that spending plan is on hold thanks to the ongoing gridlock in Trenton over the state budget.

The state constitution requires that a new state budget be in place each year by July 1, which is the start of the state’s fiscal year. If a deal on a balanced budget can’t be reached by the constitutional deadline, a state shutdown is triggered. The last shutdown occurred in 2006, when then-Gov. Jon Corzine sought to raise the sales tax, a plan that was initially resisted but ultimately accepted by lawmakers at the time.

Christie wants to garnish $300M from Horizon

This year, Christie, a second-term Republican, and Democratic legislative leaders have been trying to negotiate a series of issues along with the new budget, which measures close to $36 billion. They include proposed revisions to the way the state distributes aid to local school districts, and legislation that’s designed to help ease the public-employee pension system’s serious funding problems by using revenue generated by the state Lottery. But the biggest snag that has emerged in the ongoing budget talks seems to be the reluctance among some lawmakers, including Assembly Speaker Vince Prieto (D-Hudson), to sign off on a proposal that Christie is insisting be passed along with the budget that would garnish roughly $300 million in revenue from Horizon’s surplus to fund anti-addiction programs that Christie has made a top priority.

While Senate President Stephen Sweeney (D-Gloucester) has remained open to discussing legislation involving Horizon — which has strongly opposed attempts to interfere with its finances — as part of the budget talks, Prieto said yesterday that the matter should be taken up once the new budget is adopted.

“I’m more than happy to look at any bill, and we can do it after (the) budget break,” Prieto said.

Prieto was a strong advocate last year for renewing the TTF and adding the additional $400 million in annual spending. Asked yesterday about the threat that a government shutdown could pose to the spending on transportation projects that’s slated to occur during FY2018, Prieto said he’s definitely not “looking for a shutdown.” He went on to say a proposed budget that the Democrats have already agreed to support could be introduced on Monday and put up for final passage on Thursday, well in advance of the constitutional deadline.

Criticism of panel that would approve projects

“If somebody wants to shut (down) government it’s not going to be me,” Prieto said.

Another issue that lawmakers have been forced to consider this year is language that was written into the 2016 TTF reauthorization bill that called for a new, four-member committee to be established to develop and ultimately approve a list of road, bridge, and rail projects that will receive capital funding from the TTF each year. The panel’s members are supposed to be the DOT commissioner, and three others picked by the governor, Senate president, and Assembly speaker, but the positions remain unfilled. The new panel has also faced some criticism since it would replace the current process, which involves lawmakers receiving a list of capital projects from the DOT in late June.

To ensure that FY2018 TTF funds can still be distributed this year, Sweeney had been pitching passage of a “cleanup bill” that would suspend the part of the reauthorization that calls for the creation of the new panel. But Sweeney said yesterday that lawmakers are now planning to simply insert that language into the FY2018 appropriations act instead.

“If the panel is not in place, the appropriation (bill) overrules anything anyway,” Sweeney said. He also pushed back against concerns that the TTF project-selection process could now get politicized at the last minute in a bid to prevent a government shutdown over the budget, suggesting the governor and the legislative leaders are already in agreement on the FY2018 TTF capital plan.

Prieto also said he doesn’t expect politics will be injected into the TTF process this year. “One thing doesn’t have (anything) to do with the other,” he said.

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