Panel mulls dire prognosis on N.J. transportation fund

If New Jersey continues to rely on borrowing to finance transportation projects at its current level, the state would owe an additional $15 billion by 2050, the Legislature's top budget analyst told lawmakers Thursday.

That's on top of the $28 billion the state will accumulate over that period to retire $15 billion in existing debt, said David Rosen, budget and finance officer for the nonpartisan Office of Legislative Services.

Rosen testified before the Assembly transportation committee, which held a hearing Thursday at Camden County College in Camden on New Jersey's Transportation Trust Fund.

It was the third of four hearings scheduled on the state's transportation-funding crisis.

The fund will run out of money for projects next fiscal year, which begins July 1.

The "trust fund doesn't have the money to logically authorize new projects going forward," said Assemblyman John S. Wisniewski (D., Middlesex), the committee's chair.

Wisniewski has drafted a bill that would increase the tax on "petroleum products' gross receipts from four cents per gallon to 9 percent of the average retail price of unleaded regular gasoline."

In 1984, Gov. Thomas H. Kean signed legislation creating the Transportation Trust Fund as a way to provide a stable source of funding for roads, bridges, and other infrastructure.

It was to be funded mainly through a per-gallon tax on gasoline.

But instead of paying for projects as they were completed, the state has relied heavily on borrowing, as politicians from both parties have refused to raise taxes. Numerous independent reports have described New Jersey's infrastructure as deficient; a coalition of business, labor, and transportation groups is lobbying for long-term funding for projects.

Now, all of the revenue from the state's tax on gasoline - a combination of two levies amounting to 14.5 cents per gallon - plus revenue from various other taxes, goes toward more than $1 billion in annual debt service.

New Jersey still maintains a $1.6-billion-a-year capital program, but it's financed entirely through borrowing and some money from the Port Authority of New York and New Jersey.

The federal government also provides matching funds.

But next fiscal year, the fund will have the capacity to borrow only up to $620 million. There is little appetite in Trenton to raise the debt limit without raising new revenue.

"This is a story," Wisniewski said, "of how inattention can lead to bad consequences."

State Senate President Stephen Sweeney (D., Gloucester) has said the state must dedicate $2 billion annually to the fund. Gov. Christie has said all options were on the table to replenish the fund, though he has generally opposed tax increases.

Options include raising the gas tax, applying the state's 7 percent sales tax to gas, and increasing the wholesale tax on petroleum products.

Finding money in the general fund could be difficult. The state has added about $500 million a year in new revenue since fiscal 2001, Rosen said, for a growth rate of 2.3 percent, excluding major tax increases.

But given New Jersey's statutory obligations - such as pensions, school aid, and municipal aid - as well as constitutional requirements, "it would be difficult," Rosen said, "to dedicate this money for sure going forward."

To be sure, the state doesn't always meet its statutory budgeting requirements; Christie didn't make the full pension payment last fiscal year.

"There's not a lot of slack," Rosen said. "It's not like we're rolling in lots of extra money every year."