Coalition Pushes to Replenish State’s Transportation Trust Fund

Mark J. Magyar | September 17, 2014 | Transportation
NJ Forward includes gas tax increase as one funding option, urges merger of transportation agencies and more public-private partnerships

Tom Bracken, chair of Forward New Jersey, the new transportation advocacy group.
With New Jersey’s Transportation Trust Fund running on empty after years of overborrowing, a blue-ribbon coalition has banded together to push for a stable source of funding for transportation projects, consolidation of the state’s five transportation agencies and authorities, and increased reliance on public-private partnerships to finance major initiatives.

New Jersey State Chamber of Commerce President Tom Bracken, who is chairing the Forward New Jersey reform coalition, was determinedly diplomatic in emphasizing that the group is simply offering a menu of revenue options for consideration by Gov. Chris Christie, who has refused to raise taxes during his first five years in office and is even less likely to agree to do so if he runs for the Republican presidential nomination in 2016, as expected.

But it is significant that the coalition — whose 25 members also include an array of regional chambers of commerce, contractors associations, labor unions, and former state transportation commissioners — topped its list of revenue options with several gas tax increase options.

Further, of the 13 revenue options on the list, only the gas tax proposals would raise the significant pay-as-you-go funding needed to anchor a $1.6 billion to $2 billion per year state transportation funding program.

New Jersey’s gas tax is the second-lowest in the nation at 14.5 cents per gallon — far below New York’s 50.6-cent tax and Pennsylvania’s 32.3-cent tax. The 15-to-20-cent increase in the gas tax included on Forward NJ’s list would raise $600 million to $800 million, while the imposition of a 3.5 percent or 7 percent sales tax on motor fuels would generate $480 million or $960 million at current prices.
Assembly Transportation Committee Chairman John Wisniewski (D-Middlesex), an outspoken advocate of a gas tax increase, will open hearings on how to fund a new five-year Transportation Trust Fund next Wednesday in Montclair. And a growing number of Democratic legislative leaders are now saying that a gas tax increase in inevitable, putting them on a collision course with Christie.

The only way Christie avoided a gas tax increase in 2011, the last time the TTF came up for renewal, was by cancelling the Access to the Region’s Core (ARC) rail passenger tunnel to New York City and diverting $3.3 billion in Port Authority and New Jersey Turnpike revenues set aside for the tunnel project to provide pay-as-you-go funding for TTF.
But Christie’s subsequent decision to use the $1.5 billion in Turnpike money to balance his budget forced him to rely so heavily on borrowing and questionable fiscal maneuvers in the first four years of the plan that the Transportation Trust Fund will now run out of money midway through the next budget year, leaving the administration $600 million short of the $1.6 billion needed.

Christie has to come up with a short-term solution by next February as part of Fiscal Year 2016, most likely another round of borrowing or bond refinancing that will add to the debt service that now eats up 10.6 percent of the budget.

Bracken emphasized that Forward NJ is “not assessing blame on anyone,” but is strictly focused on providing the governor and the Legislature with a menu of concrete solutions. He said the group would mount a public relations campaign to convince the public of the need to invest in transportation infrastructure to make New Jersey competitive and to provide jobs.

“Put quite simply, New Jersey’s transportation system has run out of gas,” Bracken said at a Statehouse press conference yesterday. “We must replenish the fund to protect the safety of our families and the health of our economy. There is no greater priority for the business community right now than replenishing the trust fund in a smart, robust, sustainable way.

“In addition, we believe the revenue should be constitutionally dedicated to prevent any potential diversion of funds down the road from these critically important transportation projects,” he said.

Allison Premo Black, chief economist for the Washington, D.C.-based American Road & Transportation Builders Association, unveiled a policy study entitled “Moving New Jersey’s Economy Forward: Investing in New Jersey’s Transportation System” that made the case not only for renewal of the Transportation Trust Fund at the current $1.6 billion per year state-funding level, but also for a hike to $2 billion a year in the next five-year plan.

Black said New Jersey’s failure to invest adequately in its transportation infrastructure has left the state with 2,300 structurally deficient or functionally obsolete bridges; 4,000 road-mile lanes of roadways in poor condition; 3.9 million commuters stuck in their cars for the equivalent of an additional 35 million minutes every day; $4.6 billion in annual costs to New Jersey families, businesses, and local governments due to poor and dangerous road conditions; and 1,388 buses and 176 outdated single-level rail cars in need of replacement.

Michael McGuinness, executive director of the New Jersey chapter of the National Association of Industrial and Office Parks, noted that New Jersey’s logistics industry accounts for 11 percent of the state’s Gross Domestic Product and is critical to the corridor-state’s economic future. He noted that warehousing and other developments are locating near the New Jersey Turnpike and other major roads with access to the Port. “A first-rate transportation system is a necessity for the economy to grow,” he said.

The value of New Jersey freight shipments is expected to double from $755 million in 2011 to $1.5 billion by 2040, and imports are likely to grow from $204 million to $510.7 million over the same period, Black noted in her study.

She asserted that transportation spending supports the equivalent of almost 105,000 jobs — and this is in a state which has regained just over half of the jobs lost during the Great Recession of 2007-2009, as Christine Sturm of New Jersey Future pointed out.

“A viable transportation network, particularly a strong mass-transit system, is critical, especially now that we have a generation of young information technology workers and empty nesters who want to live in vibrant, walkable cities,” Sturm said.

In addition to the NJ State Chamber of Commerce, NAIOP, and New Jersey Future, the new coalition includes the Tri-State Transportation Campaign, AAA, New Jersey State Building and Construction Trades Council and Laborers Union, Meadowlands, Princeton and South Jersey regional chambers of commerce, Newark Regional Business Partnership, New Jersey Society for Economic and Environmental Development, both New Jersey State League of Municipalities and New Jersey Association of Counties, an array of contractors associations, four former Republican and Democratic state transportation commissioners, and the director emeritus of Rutgers University’s Voorhees Transportation Center.

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