The Transportation Trust Fund, New Jersey’s main source of funding for road and transit projects, is caught in a massive spiral of debt.
It didn’t happen overnight but gradually: Over the last 25 years, we have bought ourselves major transportation improvements – road widenings, interchange redesigns, new rail lines and countless other projects – without raising the money necessary to pay for them.
Instead, we’ve borrowed money. We have borrowed – and we continue to borrow – so much money that nearly every dollar we raise in taxes for transportation projects from the gas tax and other taxes, almost $900 million a year, is instead going to pay off interest and principal on bonds issued years ago.
— “Spiral of Debt: The Unsustainable Structure of New Jersey’s Transportation Trust Fund”, Regional Plan Association, March 2010.
The Transportation Trust Fund goes bankrupt in just a couple of short months (July 1) but the root of the problem extends back decades, as the Regional Plan Association noted in a report that they wrote over five years ago (Read the full report here: http://library.rpa.org/pdf/RPA-Spiral-of-Debt-NJTTF.pdf). And this isn’t the first time that they’ve sounded the alarm. Here’s what they said over 10 years ago, in November 2005:
But it would be a mistake to trust that cutbacks and revenue redirections can avert this crisis. Over two thirds of the transportation budget – $2.5 billion – is at risk. Efficiency savings would be negligible in light of this tremendous need, and revenue redirections of this magnitude would severely impede another part of the State budget. This is the cost of the transportation system on which New Jersey’s economy, its commuters, and its very ability to function depend. A solution is needed, and a large part of it will have to come in the form of new money.
— “Reform, Revenue, Results: How to Save New Jersey’s Transportation System”, Regional Plan Association, November 2005
And at a recent NJ Spotlight Roundtable, Regional Plan Association president Tom Wright compared the debt service level of regional transportation agencies:
MTA: Metro Transit Authority
NY DHBTF: New York Dedicated Highway and Bridge Trust Fund
PANYNJ: Port Authority of New York and New Jersey
CT STF: Connecticut Special Transportation Fund
NJ TTF: New Jersey Transportation Trust Fund
In his presentation, Wright noted that the Port Authorities 27% was “unsustainable.” If 27% is unsustainable, then what is the NJ TTF’s 98%?
Contrary to what some may say, this is not a manufactured crisis. The Regional Plan Association has been warning about the Transportation Trust Fund’s over-reliance on bonds for years. And while there have also been issues around the fund being raided to fill budget shortfalls elsewhere, that’s a small part of the problem*. The main problem is that the Transportation Trust Fund is not being funded sufficiently**. And as we approach July 1, when the Transportation Trust Fund will be bankrupt and road and bridge repairs will be stalled and counties and municipalities will be forced to raise property taxes to pay for local repairs, we should think about whether we want to fund the fund or continue to maintain our roads with credit cards.
* We support ACR1 which would dedicate the gas tax to infrastructure. We recommend that you support it as well. http://politickernj.com/2015/12/prieto-bill-asking-voters-to-dedicate-all-n-j-fuel-tax-revenue-to-transportation/
** Another common argument is that there are massive inefficiencies that, if fixed, would fix everything. While we support streamlining of administrative costs so that more money is spent on the roads, see the RPA quote above.