(The following article by Kaitlin Gurney was posted on the Philadelphia Inquirer website on July 12.)
TRENTON, N.J. — An unpopular increase to the gasoline tax alone will not solve the state’s transportation funding crisis, according to a report released yesterday by a nonprofit public-policy group.
The grim prognosis by the Regional Plan Association warns that there is less than a year before the Transportation Trust Fund – which it says has been mismanaged and exploited for decades – teeters into bankruptcy, bringing highway and rail projects to a halt.
Group leaders, joined by AAA, transportation advocates, and Rutgers University public-policy professors at a news conference, said the state would require more than $2 billion in new revenue annually to restore solvency to the trust fund created more than 20 years ago as a steady source of funding for transportation projects.
They said the state would need to rely on a variety of funding sources – perhaps a new gas tax, toll hikes, public transit fare increases and other revenues – if a financial overhaul is to last 25 years or more.
The 6-cent gas-tax increase lawmakers have discussed enacting during their lame-duck session after the November elections would keep transportation funding afloat for just three years, said Jon Orcutt, executive director of the Tri-State Transportation Campaign.
The state’s gas tax, last increased in 1988, is now 10.5 cents per gallon at the pump and 4 cents per gallon for wholesalers, the fourth-lowest in the nation.
“Anyone who says we can do this on the cheap and get away with it is going to have to answer for the increasing unreliability of the system,” Orcutt said.
The 25-page report, entitled “Putting the Trust Back in the New Jersey Transportation Trust Fund,” blames lawmakers for years of overspending, overreliance on borrowing, and the diversion of money to cover operating costs for New Jersey Transit and the state Department of Transportation. By next July, the report said, the $805 million dedicated to the fund annually from gas taxes and other sources will all be obligated for debt service on outstanding bonds totaling more than $7 billion.
That means none would be available for transit repairs and new construction on highways and public transportation.
“This has been a bipartisan problem,” said Martin Robins, director of the Alan M. Voorhees Transportation Center at Rutgers. “There has been insufficient oversight and accountability that means the trust fund can’t do its basic function – generate funding for transportation projects.”
A 2003 report commissioned by former Gov. Jim McGreevey recommended raising the gas tax by at least 12.5 cents to restore the trust fund’s solvency. When Republicans in that year’s lame-duck legislative session refused to approve a gas-tax increase, administration officials invoked short-term fixes to sidestep a crisis until 2006.
Acting Gov. Richard J. Codey is “committed to finding a stable source of funding for the trust fund before he leaves office” in January, said spokeswoman Kelley Heck.
“Now that the budget has been passed, it’s his top priority,” she said, adding that he will consider all revenue options, from a gas tax to leasing out a state toll road like the New Jersey Turnpike to a private corporation.
But Pam Fischer, a vice president of New Jersey’s AAA chapter, warned that it was ineffective to replenish the trust fund without reforming the politics and policies that have emptied it.
She recommended the state create an independent five-person financial-policy review committee to oversee trust fund operations and issue shorter-term bonds that pay less interest.
Each cent on the gas tax generates $45 million to $50 million, the report said.