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Shoring Up the Transportation Trust Fund

Posted on: Friday, 9 December 2005, 15:00 CST

By JOHN CICHOWSKI

Six months before the New Jersey Transportation Trust Fund begins starving to death, lame-duck lawmakers proposed Thursday to prop up the patient and administer oxygen so it can somehow continue to rebuild dilapidated roads, bridges and rails on a permanent basis.

No tracheotomy, though. No feeding tube either. Not yet.

Emergency measures to pay for repairs - like boosting the gas tax, or borrowing against our children's future, or selling our oldest toll road - won't likely be debated until early next year when a new governor and a new Legislature are seated. On Thursday, Trenton diagnosticians were content to release from committee a 24- page Assembly bill designed to assure taxpayers that the state will never, ever again borrow the fund into oblivion.

"Our goal is to restore fiscal integrity," said Assembly Transportation Committee Chairman John Wisniewski, D-Middlesex.

Since 1984, the trust fund has supported billions of dollars' worth of projects, but growing demands without additional revenue led to increased borrowing. By June 30, all $805 million coming into the fund - mainly from a 14.5-cent-a-gallon gasoline tax that hasn't been raised since 1988 - must be used to pay off debt.

The Wisniewski reform is expected to be debated in a lame-duck session this month. If it passes, it will go to the Senate for a vote. Key provisions would:

* Boost the fund's financing of annual transportation maintenance costs by about 68 percent - from $950 million to $1.6 billion - but limit its funding of any project to 50 percent of cost.

* Limit the Transportation Trust Fund Authority's ability to carry over unused bonding authority into subsequent years.

* Phase out over six years the practice of using the fund to pay salaries and overhead in both the Department of Transportation, which controls the state's non-toll roads, and NJ Transit, which runs the rail and bus system.

* Phase out over six years the practice of using the fund to pay for routine maintenance.

* Restrict the fund's financing for the expansion of highway capacity under the "Smart Growth" initiatives to 4 percent of cost.

* Reduce contributions to municipal transportation projects.

* Require the transportation commissioner to submit fiscal strategy reports to lawmakers.

Wisniewski said most of these recommendations were taken from a 2003 study to find methods for replenishing the fund. Besides finding that governors and lawmakers had abused the funding mechanism, partly by using it to bolster the general fund, the panel suggested more than doubling the gas tax to bail out the Transportation Trust Fund.

This approach, however, has been shunned by lawmakers and taxpayer groups. But prior to Thursday's Assembly transportation committee session, leaders of business, labor, civic, law enforcement, planning, education and health-care groups called upon the Legislature to shore up the fund well before June 30.

"Our legislators have to get over this paranoia about a gas-tax increase and how it will affect their careers," said Philip Beacham, president of New Jersey Alliance for Action, a business trade group.

"We have to get past the ghost of Jim Florio," Beacham added, referring to the governor who narrowly lost reelection in 1993 after promoting a $2.8 billion increase in various state taxes.

Citing crumbling bridges and highways, Thomas Bracken, chairman of the New Jersey Chamber of Commerce, also called for speedy action. "We cannot afford to wait until next year when our legislators will be grappling with a $5.1 billion deficit," said Bracken.

The deficit in the $28 billion state budget would grow if provisions in Wisniewski's bill are enacted. Neither acting Governor Codey nor Governor-elect Jon Corzine, who takes office Jan. 17, has commented on the bill. The gas tax generated $567 million in 2004, but $162 million was siphoned to the general fund.

As Bracken noted, the pressure is on the governor's office and the Legislature to act now because New Jersey risks losing $5.6 billion in federal aid "if our state does not match these funds with our own funding plan."

"This legislation will put the trust back in the trust fund," Bracken said, "so that our citizens are assured that transportation dollars are not being used to pay for some other project."

While endorsing some of the bill's provisions, Assembly Republicans balked at a measure to pay down existing debt over 15 years. Calling that "a long, long time," Assembly Minority Leader Alex DeCroce, R-Parsippany, conceded that the bill "reverses some mistakes of the past," but he questioned why businesspeople who mainly oppose long-term debt would favor the measure.

"We'd prefer more of a pay-as-you-go policy," said DeCroce.

A representative of the AAA New Jersey Automobile Club, which generally opposes gas-tax increases, also bristled at the increase in long-term debt.

"I'm going to take off my AAA hat and put on my mom's hat now," Pam Fischer, an AAA vice president, said in testimony before the committee. "I have a child and I worry about the kind of debt we're leaving our kids."

Wisniewski defended the added debt, saying a one- or two-year payoff would force either huge program cuts for 2006 or enormous tax increases.

"I would love to wipe out the debt tomorrow morning," Wisniewski said, "but you can't do everything all at once. Prudence dictates that is has to be phased in."

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E-mail: cichowski@northjersey.com

Source: Record, The; Bergen County, N.J.

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