Beyond the Crisis: Exploring the Future of the State’s Transportation Trust Fund

John Reitmeyer | February 22, 2016 | Transportation
NJ Spotlight roundtable brings together experts and advocates to discuss long-term concerns about New Jersey’s transportation system

Thomas Wright, president of the Regional Plan Association and keynote speaker at NJ Spotlight transportation roundtable
Often lost in the ongoing debate over renewing New Jersey’s Transportation Trust Fund — which is on course to run out of money by this summer — is what the long-term vision should be for the state’s transportation network.

Should bus and rail commutes into New York from New Jersey be made easier? Should light-rail lines in both North Jersey and South Jersey be expanded?

And should a replenished Transportation Trust Fund also address highway congestion by eliminating chokepoints?

A group of transportation experts and advocates answered “yes” to all of those questions during a recent roundtable discussion on transportation planning and funding that was hosted by NJ Spotlight. They also highlighted during the nearly four-hour event the quality-of-life improvements and economic benefits — both for the broader state economy and the individual homeowner — that would come from reinvestment in the state’s transportation network.

“I think the vision piece is a huge piece of this that we don’t talk enough about,” said Cathleen Lewis, director of public affairs and government relations for AAA New Jersey.

“We also need to be thinking about what our infrastructure needs to look like, not just in five years, but in 20 years, in 25 years,” Lewis continued. “Our infrastructure has been able to survive because other people had vision 100 years ago.”

But even as the experts and advocates listed their long-term goals — including a new Port Authority Bus Terminal and highways without the deep potholes that right now are costing motorists hundreds of dollars a year in repair costs — they also acknowledged the challenge of coming up with the cash that will be needed to fund that vision.

Right now, the Transportation Trust Fund spends more than $3 billion annually counting federal matching dollars. But the trust fund is also deep in debt, and all of the state money that’s currently coming in from its primary dedicated source of revenue — New Jersey’s 14.5-cent gas tax — won’t be sufficient to fund new projects after June 30.

“We’re not treading water, we’re underwater,” said Anthony Attanasio, executive director of the Utility and Transportation Contractors Association of New Jersey.

All the panelists agreed that the current overreliance on borrowed funds is not a good model, and that the state should return as much as possible to the pay-as-you-go funding structure that then-Gov. Tom Kean Sr., a Republican, laid out when the trust fund was first created in 1984.

“Recent history tells us that the more you can do pay-as-you-go and the less reliance on bonding, the more stable your funding will be and you will be able to maintain a reasonable program,” said Martin Robins, director emeritus of Rutgers University’s Alan M. Voorhees Transportation Center.

But Robins also acknowledged New Jersey motorists might experience some “sticker shock” when they realize that increasing the gas tax — which right now is the lowest in the region and second-lowest among U.S. states — is the best way to generate more cash for transportation projects.

Still, Gov. Chris Christie, a second-term Republican, left the door open to a gas-tax hike during his budget address before lawmakers in Trenton last week. He suggested to Democratic legislative leaders that he’s open to negotiating a bipartisan renewal plan before the June 30 deadline, as long as the Democrats also consider tax cuts somewhere else in the budget.

And his administration earlier this month issued an advertisement for financial firms that would be interested in handling the next bond issue for the trust fund, another sign an accord is in the works.

Attanasio, during the NJ Spotlight roundtable, said he envisions a new trust fund plan of $2 billion in annual state spending. And he said it would likely take a per-gallon gas-tax hike of at least 35 cents to put the trust fund on secure footing going forward, but quickly added a more modest increase could also work given political constraints.

“One number that’s been floated around a lot is 25 cents. That seems to be the number,” Attanasio said.

Now would also be a good time to push for an increase, with gas prices well below $2 throughout the state, he said.

[related]“Gas prices may drop even further with what’s going on in the Middle East and with oil production,” Attanasio said. “Now is the time to act.”

Assemblyman Scott Rumana (R-Passaic)
Assemblyman Scott Rumana (R-Passaic) said though some recent public-opinion polls indicate New Jersey residents widely oppose a gas-tax hike of any amount, other polling data suggests they are would be more open to an increase if they could be assured the funds would only be used by the state to fix transportation infrastructure. A ballot question going before voters this fall will seek to do exactly that.

“You cannot use this money for anything else. It’s got to be in a lockbox and only kept for the transportation needs of this state,” Rumana said. “For too long you’ve had monies taken out for other things, administrative costs, it’s got to go to transportation and transportation only.”

The advocates and experts throughout the day also stressed the importance of maintaining New Jersey’s infrastructure to the broader state economy and a still ongoing recovery from the past recession.

“Our economy is built upon the geography of our state, where we’re located,” explained Senate Majority Leader Loretta Weinberg (D-Bergen). “We are part of the larger region, which is why our bridges and tunnels are so important and why investing in them in so important.”

Joseph McNamara, director of Laborers-Employers Cooperation and Education Trust, called transportation “the foundation of our economy.”

“We rely more on transportation, this region, than any other region,” said McNamara, who is also a board member for the New Jersey Economic Development Authority.

“It’s critical that we maintain and modernize that infrastructure. If not, (companies) will not come here, nor will they stay,” he said.

Tom Wright, president of the Regional Plan Association, struck a similar note during the event’s keynote address, but he added there will also be benefits for New Jersey homeowners — particularly those who live within commuting distance of Manhattan — when large-scale regional infrastructure improvements such as the planned Gateway tunnel project under the Hudson River are eventually completed.

Under the federal government’s current plans, the state will have to contribute some of what could be a $5 billion share of the overall $20 billion cost of the Gateway project, which includes other improvements in addition to a new tunnel.

But Wright’s organization has studied how making commutes from New Jersey into New York faster can increase home values in New Jersey. A recent study looked specifically at some transportation improvements that have been made in places like Kearny, Montclair, and Secaucus, he said.

“The numbers are fairly eye-popping,” Wright said said. “An investment that will save 10 minutes will add $30,000 in value to a home within a half mile of a train station.”

And overall, homes in New Jersey that are within two miles of a train station going to midtown Manhattan stand to gain a combined $18 billion in value from a new commuter tunnel that will cost an estimated $12 billion.
“For every dollar we spend building that tunnel, we’ll be putting a $1.50 into the pocket of everybody who lives within two miles of a train station,” he said.