Christie administration: Road fund could go broke this summer

Thinking Highways
By Thinking Highways April 15, 2016 15:52

Christie administration: Road fund could go broke this summer


New Jersey’s transportation funding system is in disarray, and neither the governor nor state legislators has a plan for how to plug a financing gap that tops $2 billion, administration officials and Assembly members said Wednesday at the first budget hearing of the season.

Fixing the problem will require elected leaders to either borrow more money, slash funding for construction projects, or increase taxes — possibly including the gas tax. Each of those options entails significant political risks.

So Governor Christie and the Democrats who control the legislature demurred, and instead spent Wednesday daring each other to take the first step.

Related:   Christie’s $34.8B budget has money for pensions but not roads or bridges

“It’s very frustrating,” said Assemblyman John Burzichelli, D – Cumberland. “We aren’t the body that issues the budget recommendation. We are the people who approve the proposal made by the governor.”

The governor’s office replied that the state’s constitution requires any revenue increase to start in the legislature.

“Given that just about every Democratic member of the Assembly has been clamoring for higher gas taxes, it’s more than fair for you to question what their plan is for a bill that must originate in their house to begin with,” said Kevin Roberts, a spokesman for Christie.

Behind the tough talk, there were some indications Wednesday that the two sides are willing to compromise. Christie’s “door is always open” to Senate President Steve Sweeney and Assembly President Vincent Prieto, Roberts said.

“Regarding this issue of who should blink first,” Assemblyman Declan J. O’Scanlon Jr., R – Red Bank, said at the budget hearing, “it’s my impression that almost every single one of these issues has been resolved through some sort of a collaborative effort.”

There are plenty of problems to fix. For starters, the governor’s proposed budget for fiscal year 2017 identifies no money to cover $1.6 billion in construction projects by the Transportation Trust Fund. The fund will receive $1.3 billion from sources including the gas tax, but every penny is needed to pay existing debt, which currently stands at $16 billion, according to the nonpartisan Office of Legislative Services.

Without new revenue the fund will run out of money in August, according to acting Transportation Commissioner Richard Hammer, who said he is confident the governor and legislators can reach a deal by then.

“I’m not sitting here today saying that there is a crisis. I don’t believe that there is one,” Hammer said.

“At what point should this committee assume there is a crisis?” said Gary Schaer, D – Passaic, who chairs the budget committee.

NJ Transit has its own budget problems, including more than $400 million it transferred this year from construction projects to fund day-to-day operations, said Dennis Martin, the agency’s acting executive director.

Meanwhile NJ Transit has whittled its budget shortfall from $57 million in March to about $45 million today, Martin said. But rising costs, driven by higher fees to access Amtrak’s Northeast Corridor tracks and a new contract with its 4,200 rail workers, mean NJ Transit’s budget will stay in the red through the end of this fiscal year.

“Yes. There will be a deficit,” Martin said. “We don’t know what the size of it will be.”

Thinking Highways
By Thinking Highways April 15, 2016 15:52