New Jersey Acting Treasurer Andrew Eristoff Thursday told a Senate committee that the New Jersey Transportation Trust Fund Authority may refund bonds to help generate needed borrowing capacity in fiscal 2011.
Eristoff said the TTFA will have only $25 million of dedicated funds remaining in fiscal 2011, which begins July 1, to support additional bonding. The trust receives $895 million of dedicated funds annually, with principal and interest payments on prior bonds taking up nearly all of that yearly allocation beginning in fiscal 2011.
Refinancing outstanding debt could help create more bonding capacity for the authority, giving the state needed funds for road, bridge, and mass transit infrastructure projects.
Eristoff did not specify a projected amount that could be realized from refinancing prior TTFA bonds, but stressed the transactions would need to generate net present-value savings.
"One alternative that has been presented to me, just on a preliminary basis, is that there's a belief that we might be able to get a little bit of extra bonding capacity by restructuring some of the existing debt — taking into account, of course, the priority of making sure that any restructuring results in a net present-value savings," Eristoff said Thursday before the Senate Judiciary Committee. "Frankly, I feel very, very strongly that we never want to do a refunding that results in a net present-value cost."
The refinancings alone would not solve the TTFA's funding challenge and the state would need to find additional ways to support the program.
"We're going to need more to continue a robust capital program going forward," Eristoff told the committee. "That is already a major component of discussions with respect to fiscal 2011."
Gov. Chris Christie will deliver his fiscal 2011 budget address on March 16.
The Senate Judiciary Committee Thursday approved the governor's nomination of Eristoff as treasurer. He spoke before the committee for more than four hours. The discussion was dominated by the administration's plan to withhold state aid to school districts that have surpluses in excess of 2% in order to help balance the state's current fiscal budget. The nomination will now go before the full Senate.
Eristoff and his family currently live in Manhattan but plan to move to New Jersey this summer.
