Op-Ed: Sidamon-Eristoff — Getting Good Value for Our Transportation Dollars

Andrew Sidamon-Eristoff | October 8, 2015 | Opinion
Before asking how much we need to spend, we need to take a close look at the “experts” recommending that we spend billions

Former State Treasurer Andrew Sidamon-Eristoff
For several years, a broad range of stakeholders has pushed the governor and the Legislature to “replenish” New Jersey’s Transportation Trust Fund and provide a “long-term solution” for funding transportation infrastructure projects. Declaring that “[a]ddressing this critical issue is the single most important priority facing our state’s leaders today,” Forward New Jersey, a business-labor coalition chaired by the New Jersey Chamber of Commerce, is calling for $2 billion a year in spending over the next 10 years, up from the current $1.6 billion.

Others such as Senate President Steven Sweeney have advocated doubling the amount of Trust Fund spending for county and municipal government road and bridge projects, from approximately $200 million annually to $400 million.

Most of the political Sturm und Drang has centered on the obvious question: Where do we get the money?

Existing sources of dedicated tax revenue (the 14.5 cent per gallon motor-fuels tax and a portion of the sales tax) are all but tapped out, and there is growing discomfort with the state’s accretion of bonded and nonbonded debt.
Democrats and a few Republicans in the Legislature have stated that they’d be willing to raise New Jersey’s relatively low motor-fuels tax. Gov. Chris Christie has repeatedly said that “everything is on the table” and has explicitly linked a possible increase in the motor-fuels tax with offsetting “tax fairness” for New Jerseyans in the form of estate-tax or sales-tax relief.

But after several years of “you first/no, you first” stasis, the conventional wisdom is that nothing will happen before November, when all 80 members of the General Assembly are up for election.

The furious debate over funding sources has generally overshadowed the need to explore another, perhaps more important, question: How do we know that $2 billion or $2.2 billion (or any particular amount of spending for that matter) is the right number?

We are told that industry “experts” believe that spending $2 billion a year is absolutely necessary for the state’s roads, bridges, and mass-transit systems to achieve a “state of good repair.”

Maybe so. But who are these experts? And how do we know we’ll get our money’s worth? To the extent that the experts are interested parties such as construction unions, contractors, consulting engineers, and public finance firms — or funded or employed by the same — the press and public would be very well advised to remember President Eisenhower’s warnings regarding the “military-industrial complex” and proceed with due caution.

Although I am no expert in transportation or capital construction, I have enough experience in government to be extremely nervous when most of the frenetic public dialogue surrounding such an important issue characterizes the “critical” need for $X billion a year as an unchallenged given rather than as a significant dependent variable.

Unhappily, there is every reason to challenge the cost of transportation capital construction in New Jersey. In its most recent Annual Highway Report, the Reason Foundation found New Jersey’s state highway system ranked 48 out 50 states in overall cost versus quality, with costs of $2 million per mile for road construction — more than 12 times the national average and four times that of New York State.

Even if New Jersey’s transportation commissioner is correct in asserting that the Reason Foundation’s methodology unfairly inflated New Jersey’s relative costs, there is no getting around the fact that, no matter how you slice it, New Jersey is spending top dollar for transportation capital projects.

If there are good, defensible reasons based on factors such as climate, geography, density, the age of our infrastructure, and so on, so be it. But this being New Jersey, there is always the slight possibility that the reasons are not so good or defensible.

To put the current political standoff over funding to positive use, I would add my voice to that of Senator Michael Doherty and others who have suggested that we leverage the delay as an opportunity to examine the “value” question.

To that end, Christie should consider appointing an independent commission of experts drawn from industry, labor, government, and independent academe to examine, and make recommendations for lowering, or at least controlling, the cost of transportation projects in New Jersey. The commission might look into such questions as whether the state and its contractors are leveraging the latest value-engineering and design-build construction techniques; whether, how, and why our labor pool differs from that of neighboring states; or whether New Jersey has outdated public contracting statutes that impose unnecessary delays and added costs.

Even if the commission process doesn’t yield a bonanza of streamlining ideas and huge cost savings, there is no downside to examining the issue seriously. At the very least, a credible commission study might give our beleaguered taxpayers some measure of confidence that they will be getting their money’s worth in the state’s next Transportation Trust Fund reauthorization.