With the political impasse over transportation funding that has gripped Trenton for the past three months now settled, New Jersey lawmakers are scheduled to vote tomorrow on the legislation that will hike the state’s gas tax by 23 cents. The proposed increase already has Gov. Chris Christie’s endorsement and is expected to pass with bipartisan support.
But still uncertain is exactly when Christie will be willing to lift a hold on state-funded road, bridge, and rail projects that’s been in effect since July and how much that shutdown, which sidelined an estimated 3,000 construction workers, has impacted New Jersey’s economy and its residents. In some places, local officials simply ignored the construction freeze since the state money had already been promised, but others were concerned about possible fines and are now anxious to see the road crews return to work.
Christie, a Republican, announced on Friday that he is ready to sign off on the gas-tax increase needed to renew the state Transportation Trust Fund since Democrats who control the Legislature say they will authorize more than $1 billion in new tax cuts. If approved and signed into law this week, the gas tax increase isn’t expected to go into effect immediately, but officials say it would likely be in place by the beginning of November at the latest.
Still, the construction freeze remains in effect and Christie’s office offered no clear idea yesterday of when it will be rescinded.
Time is of the essence as construction officials say still it’s not too late to make up for the months of warm weather that were lost to the political gridlock. They will need about a week to mobilize before crews can be back on the job. Meanwhile, local government leaders also say work should be able to resume almost immediately.
The deal that was announced by Christie, Senate President Stephen Sweeney (D-Gloucester), and Assembly Speaker Vince Prieto (D-Hudson) on Friday calls for the TTF to be reauthorized for another eight years using money that will be generated through new borrowing and the proposed 23-cent increase of New Jersey’s per-gallon gas tax, which now totals 14.5 cents.
As part of the deal, a package of tax cuts that includes a slight reduction of the sales tax and a phase out of New Jersey’s estate tax will also be enacted. The new 37.5-cent gas tax is expected to generate roughly $1.2 billion in annual revenue for transportation projects, helping to support $2 billion in annual spending. Counting federal matching funds, annual spending will rise to almost $4 billion, up from the $3.2 billion that had been spent each year over the life of the last TTF finance plan.
None of that new revenue will have a direct impact on the annual state budget since the TTF is a standalone account that’s set up just to fund transportation projects. But the proposed tax cuts that are part of the deal will directly impact the budget, with initial projections indicating they will eventually cost more than a $1 billion in lost revenue unless the renewed transportation spending and the tax cuts themselves produce a groundswell of economic growth.
Christie had fought for a larger sales-tax reduction when the impasse began in late June, but eventually settled on the compromise with Sweeney and Prieto that was announced Friday, which involves the phasing in a reduction of 3/8ths of 1 percentage point by the start of 2018.
The compromise was reached only a day after a fatal New Jersey Transit train crash in Hoboken, but Prieto said the accident, which also injured more than 100, wasn’t the reason the three men were finally able to resolve their differences. Instead, he told reporters in the State House moments after the deal was announced that negotiations had been ongoing leading up to Friday’s meeting.
He also cited the construction workers that had been idled as a result of the work stoppage as a major source of urgency.
“The bad weather is coming, so we need to put these people back to work,” Prieto said. But when exactly those workers will be able to get back to work isn’t clear right now.
In an executive order issued just before midnight on June 30, Christie ordered all work on state-funded road, bridge and rail projects stopped in order to make sure the TTF had enough money left in its accounts to respond to emergencies and to keep essential projects going forward. A few weeks later his office released a list of all the road and rail projects that had been halted, and then in August as the stalemate continued he issued a new executive order that said the freeze would continue “while the people of New Jersey wait for the Senate and General Assembly to pass a (TTF) reauthorization bill.”
Though lawmakers are now poised to act on a TTF reauthorization bill tomorrow, Christie press secretary Brian Murray said yesterday that it’s too early to say when the freeze can be lifted.
“We’ll need to wait until after action is taken by the Legislature to advise on those issues,” Murray said.
Once the executive order is rescinded, the idled construction crews will need some time to reorganize, said Greg Lalevee, chairman of the Engineers Labor-Employer Cooperative.
“It’ll probably take a work week, maybe a day or two longer, for contractors to remobilize,” Lalevee said.
He’s also hoping that weather conditions will allow the crews to completely make up for the time that was lost to the political gridlock. Typically, work can last into November, and sometimes longer.
“Is there enough time to catch up? I would hope that there is,” Lalevee said. “That’s completely weather dependent.”
The municipalities and county governments that were forced to suspend construction work are also ready to get the stalled projects restarted. Due to their contracting rules, most local governments should have been able to keep crews on the roads even as the TTF ran dry because they started the projects with the understanding that the state had already approved and authorized the spending. But Christie’s executive order forced the issue by saying the remaining TTF dollars had to be protected to ensure essential projects and emergency work would remain funded throughout the impasse.
Some towns, including Piscataway, chose to disobey the order to keep workers on the job. But many local governments were concerned about any penalties the state could impose for not following the order, and they are now anxious to see the freeze lifted altogether, said Michael Darcy, executive director of the New Jersey League of Municipalities.
“We’ve all put up with this long enough, and we all need to get back to work,” Darcy said.
John Donnadio, executive director of the New Jersey Association of Counties, predicted most county government road and bridge projects would also be able to be restarted immediately if Christie rescinds his executive order.
“Once the freeze is lifted, it shouldn’t take too long to get these projects up and running again,” Donnadio said. “I’m glad they got the (TTF) deal done. I’m glad they found a solution.”