It’s no secret that New Jersey’s infrastructure is in crisis. Our roads, bridges, and rails are among the worst in the nation and need immediate attention. There’s a ticking time bomb that could further harm our state’s residents and leave our infrastructure in shambles: The unsustainable debt of the Transportation Trust Fund.
Let’s get down to the facts: The Transportation Trust Fund (TTF) is $16 billion in debt, which as of now will cost us more than $30 billion to pay back over the next 28 years. And yet, despite annual debt service of more than $1.2 billion per year, the TTF has neither a long-term solution for funding road projects nor a guaranteed plan to pay off the debt.
If we don’t find a long-term, dedicated source of revenue to fund projects for the TTF and pay off debt, our children will be paying the bills decades from now. Since we use the debt for everything these days, not just long-term capital projects that make sense to bond, potholes fixed today will still be getting paid off decades from now with a ton of interest.
Here is the reality: Without a new funding solution, the TTF will be insolvent by July 1. New Jersey’s roads are crumbling — and before we can even begin to think about starting new projects to fix our infrastructure, the TTF owes at least $1.1 billion to pay for old projects for the 2015 fiscal year. That means that we haven’t just neglected to pay for new infrastructure improvements. We haven’t paid for last year’s either.
In terms of household finances, that’s like maxing out our credit cards and needing to borrow more money just to pay them off. Or taking out second, third, fourth mortgages, and beyond on your house.
According to our present debt-service schedule, the state will need to pay back at least $1.2 billion every year for the next 13 years. After that, the TTF will still owe about $1 billion per year in debt service alone until at least 2042. Yet revenues for the TTF each year don’t come close to topping $1 billion.
That means we’re still losing money – even without starting any new projects.
By now, we’ve borrowed so much money and paid so little back that nobody is willing to lend us money to cover our debts. We need a solution that provides real revenue in order to make any headway on the debt, let alone pay for urgent needs, emergency repairs, new infrastructure, and other transportation projects that will help our economy boom.
The solution seems clear: If we can’t borrow any more money, we need to increase revenue. Currently, the only solution that can raise enough money to fund the TTF, fix our roads, and begin chipping away at our debt burden is one that includes an increase to the gas tax.
Some of our elected officials, at the bidding of special interests, have proposed the same sort of short-term bandage that got us here in the first place: optimistic growth projections, mysterious allocations of other state revenue, and borrowing even more money at even higher costs.
But that’s exactly what’s left us owing $30 billion, leaving decades of New Jersey residents to pay for irresponsible borrowing and short-term legislating. Empty promises have left us in a $30 billion hole, and unless we take immediate action, we’re digging it deeper.
That is why we need to raise our gas tax and dedicate its revenue to support the TTF. It may take hard choices, but raising the gas tax will save our residents money in the long term and prevent our children from shouldering billions of dollars in debt decades from now.