TRENTON , N.J. — New Jersey Gov. Chris Christie announced a plan Thursday to sell $4.4 billion of bonds over the next five years to help finance road, bridge and mass-transit projects throughout the state.
The funding plan will breathe life back into the New Jersey Transportation Trust Fund Authority.
The TTFA’s coffers are set to dry up this year as debt-service costs claim its entire $895 million annual appropriation.
The funding plan, which he described as “a responsible way to do it,” does not include any new taxes or any tax increases. Instead, New Jersey will tap into excess transportation revenue that currently flows into the state’s general fund after meeting debt-service costs on the TTFA’s outstanding bonds.
“The idea of raising taxes in this economy is something that this administration certainly will not do under any circumstances,” Christie said at the press conference where the transportation funding plan was unveiled. “I am not going to place a greater burden on the people of the state of New Jersey.”
On top of the $4.4 billion of borrowing, the five-year plan includes $1.8 billion of funding from the Port Authority of New York and New Jersey and $1.8 billion of pay-as-you-go funding. It continues the TTFA’s yearly spending of $1.6 billion for capital projects on roads, bridges, and public transportation.
Christie’s aim is to dramatically increase the state’s use of pay-as-you-go funding rather than borrowing for infrastructure needs. Under his plan, the TTFA will use $605 million of pay-go-funding in fiscal 2016 to finance transportation infrastructure, compared with the $38.1 million lawmakers allocated this year.
Christie said the funding plan will begin tapping into general fund revenue in fiscal 2014.
In addition, the Republican governor pledged to end TTFA’s reliance on capital appreciation bonds and other “Wall Street trickery” where principal and interest payments are pushed out to future years.
“This plan incurs debt but it incurs less than half the amount of debt over five years that the last plan,” Christie said. “And this debt is the right kind of debt. A level, 30-year, interest and principal paid along as you go. So, no big balloon at the end. No big payment that someone’s going to have to swallow 30 years from now.
The $8 billion of total spending from fiscal 2012 through fiscal 2016 will benefit from unused funds — namely toll increases on the New Jersey Turnpike — originally intended to finance a terminated project to create a new commuter-rail tunnel under the Hudson River. Christie declined to specify how much of the unused tunnel funds will be used to support his plan, but acknowledged that a portion of them will be tapped.
It’s not exactly clear if the state will use excess TTFA revenues or Department of Transportation revenues to support the $4.4 billion of debt. Assemblyman John Wisniewski, D-Middlesex, who chairs the Transportation, Public Works and Independent Authorities Committee, said his biggest concern is that Christie’s plan does not include a clearly identified source of revenue for the bonds.
He said his understanding of the plan is that Christie has identified motor vehicle fees, taxes on heavy trucks and some portion of motor fuels taxes that the administration is saying are not encumbered.
“I’m not sure that that’s accurate,” Wisniewski said. “I’m not sure that those numbers are reliable. The reality is that virtually all of the money that is currently earmarked in budget documents for the trust fund has already been pledged to pay existing debt.”
Wisniewski also questioned the incorporation of Port Authority funds into the TTFA funding plan. The Port Authority is a bistate agency and New York Gov. Andrew Cuomo would need to approve the spending for New Jersey projects. Christie declined to elaborate on the level of New York support, saying that he does not comment on conversations with other governors.
The Port Authority funds would help finance improvements thank link New Jersey’s port district with the Holland Tunnel, including the Pulaski Skyway.
Christie said the plan will go before the Joint Budget Oversight Committee this year and will need legislative approval in fiscal 2012 to increase by statute the TTFA’s debt ceiling in fiscal 2012 by $3.6 billion.
The proposed issuance of $4.4 billion of bonds would not go before the voters, the governor said, as the administration will secure them with transportation revenue.
