Depleted Transportation Trust Fund Creates Fiscal Crisis for Municipalities

Concerns reach all the way down to local communities, where mayors don’t know how much to slot in their budgets for maintaining local roads

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New Jersey will run out of money for new transportation initiatives at the end of June, and it’s sounding more and more as if a deal to renew funding for road, bridge, and rail projects is still at least several weeks away.

That lack of agreement in Trenton on the future of state transportation funding is starting to have more than just political ramifications. Mayors in towns across New Jersey will soon get ready to draft municipal budgets with no idea how much local transportation aid they should count on receiving from the state — meaning motorists are facing either more trips on dilapidated roads or higher property tax bills to fix them.

Still, the issue could go down to the wire since Democratic legislative leaders say they’ve yet to enter into serious face-to-face negotiations on a renewal of the state Transportation Trust Fund with Gov. Chris Christie, a second-term Republican in the midst of a bid for the GOP’s presidential nomination.

And even getting a straight answer as to who’s to blame for the ongoing stalemate depends on who is answering the question. Christie’s acting transportation commissioner yesterday pointed the finger directly at lawmakers, suggesting the administration is waiting on them to formulate and submit a plan.

A leading Republican lawmaker agreed, calling on Democrats to draft and post legislation for a vote. But the Democrats in turn put things squarely back on the governor.

The New Jersey Transportation Trust Fund pays for more than $3 billion in annual infrastructure improvements throughout the state, with $1.6 billion raised primarily from borrowing, fuel taxes, and highway tolls. The other half of the trust fund’s revenue comes from federal matching dollars, which could be put at risk if the state dollars go dry.

But a five-year, $8 billion state-funding plan that Christie put forward back in 2011 is set to expire by the end of the current fiscal year, which is June 30.

That would leave no money for new projects beyond the deadline, but so far, the governor has yet to spell out how he plans to renew the fund.

Yesterday, New Jersey’s acting Department of Transportation Commissioner Richard Hammer told reporters right now the next step is for lawmakers to propose a trust-fund renewal plan

“We stand ready to hit the ground running with a list of projects once this gets renewed,” Hammer said after a panel discussion that was held inside the State House yesterday as part of the New Jersey State League of Municipalities’ annual Mayors’ Legislative Day.

“We’re waiting on a proposal to be submitted,” he said.

Hammer also sidestepped a question about hiking New Jersey fuel taxes — which many believe will be the likely solution to transportation-funding crunch. At 14.5 cents, New Jersey’s gasoline tax is among the lowest in the country and hasn’t been increased in more than two decades.

For his part, Christie also hasn’t ruled out an increase of the gas tax, but since he’s still on the GOP presidential campaign trail the issue remains a toxic one. And depending on how things go for Christie in the New Hampshire primary next week, his pursuit of the GOP’s nomination could extend for at least the next several weeks leading up to the “Super Tuesday” of presidential primaries scheduled for early March.

Assembly Speaker Vince Prieto (D-Hudson) suggested during a legislative roundtable held during the mayors’ event that Christie’s presidential ambitions are right now holding back a broader deal on transportation funding. (The author of this story served as moderator for the legislative roundtable).

“There’s just one cog that’s missing, the governor,” Prieto said. “Until we get all of us together in one room, then we can hash something out and we can roll something out.”

Senate President Stephen Sweeney (D-Gloucester) agreed with Prieto, saying they need Christie to engage in the type of negotiations that led to prior bipartisan deals, such as the 2010 agreement on a 2 percent local property tax levy cap and the 2011 accord on public-employee benefits reform.

“We really need to sit down with the governor and have that conservation,” Sweeney said.

And he said that at this point he and Prieto are largely on the same page when it comes to renewing the trust fund, with a precise breakdown between new borrowing and pay-as-you-go financing their remaining sticking point.

But Assembly Minority Leader Jon Bramnick (R-Union) said the Democrats don’t need to wait for Christie to begin the discussion. With control of both the Assembly and Senate, they could propose and advance their own renewal plan, and then send it to the governor for consideration, Bramnick said.

“They can put the Sweeney-Prieto proposal on the table, vote it up, send it to the governor’s desk and let him (conditionally veto) things he doesn’t like,” Bramnick said.

“To point the finger at the governor? Hey, pass the bill and see how it goes,” Bramnick said.

He also offered a grim prediction of whether the issue would be resolved soon after Christie delivers his budget message on February 16, or closer to the June 30 deadline.

“I have a prediction, and the prediction is it’s probably going to be a cliffhanger because that’s when government acts, when it’s under crisis,” Bramnick said.

And Senate Minority Leader Tom Kean Jr. (R-Union) had another take altogether. He said a proposal put forward in December by Sen. Jennifer Beck (R-Monmouth) deserves more attention than it’s been getting to date because her plan would extend the trust fund for seven more years — without hiking the gas tax.

In addition to earmarking projected annual revenue growth of more than 3 percent to transportation projects, Beck’s plan also calls for the creation of several other new sources of revenue, including increased fines for motor-vehicle offenses like drunken driving and texting while driving.

“I think what people want are straightforward answers,” Kean Jr. said. “The goal is to focus on solutions that are going to make this state more affordable over time to make sure that the transportation needs that local communities (have) are also met.”

Amid the political arguments, East Rutherford Mayor James Cassella and several other mayors weighed in as well. In addition to paying for major projects, the trust fund also provides money to municipal and county governments to help maintain local roads. The mayors said they want to see at least 25 percent of the revenue from a renewal plan devoted to local projects.

“When we talk about our property taxes and the escalation of our property taxes, even though it’s slowed, these are the types of things that cause the increases,” Cassella said. “It’s so important that something is done, and something is done soon.”

“Our local roads are in terrible shape and they’re not getting better, they’re getting worse,” added Fanwood Borough Mayor Colleen Mahr. “The resources are being stretched really thin for our Department of Public Works, and we’re making some choices that we shouldn’t necessarily have to make.”

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