Gov. Chris Christie told lawmakers during his budget address earlier this week that there’s still plenty of time to reach a “reasonable” deal to renew New Jersey’s teetering Transportation Trust Fund.
And it looks like his administration has been quietly moving forward with plans to arrange the financing.
Earlier this month, the state Department of Treasury started advertising for investment-banking services related to a trust-fund transaction that, according to a formal request for proposals, is “planned for Calendar Year 2016.” Responses are due at 3 p.m. today.
Christopher Santarelli, a Treasury spokesman, described the advertisement yesterday as a routine procedure given that the state is due for another long-term Transportation Trust Fund reauthorization. He said investment-banking services will be needed to “assist the State in introducing a newly reauthorized Transportation Trust Fund Authority to potential investors, rating agencies and the Wall Street community.”
Routine or not, the move sends another signal that the Christie administration is serious about striking a deal on transportation, or at least having an investment firm in place to finance a plan B.
Treasury’s search for an investment-banking firm comes as the state’s five-year, $8 billion transportation-funding plan is set to expire on June 30. It also follows recent comments made by both Christie, a second-term Republican, and Democratic legislative leaders that suggest all parties want to get a deal done.
For Christie, that could mean accepting the fuel-tax hike that Democrats are seeking, and for the Democrats it could involve agreeing to new tax cuts, or “tax fairness,” that the governor says he wants.
On the other hand, many expected there would be a deal by now. There are concerns that partisan gridlock in Trenton could get ultimately threaten the proper maintenance of New Jersey’s roads, bridges and rail network.
But having a financial firm at the ready could also serve as a “backstop” for Treasury, said Anthony Attanasio, a former state Department of Transportation assistant commissioner who now serves as executive director of the state Utility & Transportation Contractors Association. That would ensure funding could be obtained, even on a short-term basis, to pay for at least some transportation work beyond June 30.
“We feel confident that this is simply a backstop,” Attanasio said.
New Jersey’s Transportation Trust Fund was created in 1984 as a “pay-as-you-go” fund linked to fuel-tax revenues. But governors from both parties, fearing the blowback from a gas-tax hike, have largely turned in recent years to new borrowing and refinancing to keep up with annual transportation spending, which totals more than $3 billion counting matching federal dollars.
Christie unveiled the state’s last long-term funding plan in January 2011, a five-year initiative that avoided a gas-tax hike by calling for the use of more “pay-as-you-go” transportation funding out of the annual budget.
The plan also dipped into funds generated by the New Jersey Turnpike Authority and Port Authority of New York and New Jersey that were originally earmarked for construction of a planned Hudson River rail tunnel that Christie successfully blocked.
Despite his promise to ease the state’s reliance on borrowing, the “pay-as-you-go” transportation funding that Christie called for never really materialized, leaving the trust fund deeper in debt as his first five-year plan now reaches its final months.
A $627 million bond sale conducted by Treasury late last year used up much of the fund’s remaining borrowing capacity.
And all of the revenue from New Jersey’s current 10.5-cent per-gallon tax on gasoline sales and a 4-cent tax on the gross receipts of petroleum products is now needed just to pay down the trust fund’s significant debt.
Still, Christie — who over the last several months had been focused primarily on his failed bid for the GOP’s 2016 presidential nomination — has attempted to downplay any sense of urgency. In this week’s budget address, he said that “to imply that the TTF is in crisis and is suddenly and unexpectedly ‘running out of money’ is a politically driven mischaracterization.’”
But he also called on lawmakers to work with him to fix the state’s problems, including to “build infrastructure in a way that is fair to our taxpayers.”
Democratic legislative leaders said they were disappointed to hear Christie also say during the budget speech that it was the last legislative election – and not his own presidential ambitions – that derailed an earlier agreement on a fund-renewal plan.
Assembly Speaker Vince Prieto (D-Hudson) said hearing that comment from Christie made him “hotter than a baked potato.”
But both Prieto and Senate President Stephen Sweeney (D-Gloucester) repeated their willingness to negotiate a bipartisan plan with the governor that could involve cutting New Jersey’s estate tax and increasing the state income-tax exemptions on retirement income from pensions, annuities and 401(k) plans.
“We want a solution, we want it to be bipartisan,” Sweeney said in response to Christie’s budget speech. “We need to figure out how much, when and where, and how long.”