New Jersey Gov. Jon Corzine yesterday announced his plan to increase transportation infrastructure projects and school construction over the next six to eight months to support job growth and help bolster the state's softening economy.
Corzine's Economic Assistance and Recovery Plan does not add new capital projects to the state's list of needed improvements, but jump-starts already approved projects currently waiting for a funding commitment. And that commitment is what the governor announced before a special joint session of the legislature.
To get infrastructure projects going, Corzine said that the state would begin design and construction on $3.3 billion of transportation developments and another $1.8 billion of school construction projects.
"The projects are advancing capital plans already authorized, drawn and funded," Corzine said before lawmakers and government officials. "We are only moving them forward by expediting the shovels in the ground and boots on the pavement because we need to provide employment now. These efforts will simply help bridge the recession while providing their intended long-term benefits."
The governor also announced that the state is expecting $400 million less in revenue than previously anticipated for fiscal 2009, which began July 1. Borrowing will help fund a large portion of the projects, and the state already has available bonding capacity through various agencies to support the projects.
On Oct. 28, the New Jersey Transportation Trust Fund Authority will vote on its annual fall bond sale, which typically totals $1.2 billion to $1.3 billion. The TTFA supports roadway, bridge, and mass-transit capital needs throughout the state.
Whether the authority will issue all the bonds in one sale, as it has done in the past, or sell through smaller tranches, and when it will issue the bonds depends on the market.
"Obviously market conditions are going to dictate a lot of it so I think what we're going to do is work with the office of public finance to find what the right formula of that issuance is going to be," said state Transportation Commissioner Kris Kolluri.
Additional borrowing would come from the New Jersey Turnpike Authority, for roughly $1.2 billion, and from another $800 million of New Jersey Transit Authority debt as the infrastructure developments progress, according to Kolluri. Funds from the Department of Transportation and the federal government will also help support the capital projects.
Officials anticipate the $3.3 billion for transportation infrastructure will create roughly 28,000 jobs, according to the state's Web site.
Schools will also see more development as the state plans to move ahead on $1.8 billion worth of projects, which will create 15,600 jobs. Those projects are tied to $1.2 billion of authorized borrowing that the state may price all or of portion of early next year.
The $1.2 billion is the last remaining bond capacity from a $8.6 billion school construction authorization. In July, Corzine signed off on an additional $3.9 billion of school borrowing for needed projects not included in the previous bond authorization.
The accelerated infrastructure developments could help the state address employment issues. New Jersey lost 2,200 jobs in August when its unemployment rate hit a five-year high of 5.9% and the state lost another 3,900 jobs in September, yet the unemployment rate dropped slightly to 5.8%, according to New Jersey's Department of Labor and Workforce Development. The national unemployment rate sits at 6.1%.
Along with investing in infrastructure, Corzine proposed directing $150 million towards foreclosure prevention as well as a tax freeze for seniors and aid to food pantries, among other programs. Yet the governor said overall spending will not increase, as he is asking his cabinet to make cuts to support the new spending plans.