New Jersey's Transportation Trust Fund is running low on gas after state lawmakers failed to reach agreement on a plan to replenish the program before Thursday's deadline.
Gov. Chris Christie issued an executive order just before midnight requiring that state officials plan an orderly shutdown of ongoing non-essential transportation projects being paid out of the fund, which expired Friday after it was last authorized for five years at $1.6 billion annually in 2012.
The state's Department of Transportation and New Jersey Transit have until the end of Saturday to organize "an "immediate and orderly shutdown of all ongoing work, Christie said. The Republican governor's action followed the state senate's inaction on an assembly bill he supported that would have replenished the trust fund through a gas tax hike of 23 cents a gallon combined with a 1% sales tax cut.
"In order to protect the health, safety, and welfare of the citizens of this State, it is necessary that the remaining amounts held by the TTF not be spent on any transportation project that is not absolutely essential," said Christie after announcing his order.
Despite missing the June 30 deadline, lawmakers emphasized that the fund has enough cash to fund transportation projects through early August. Assembly Speaker Vincent Prieto, D-Secaucus, said he remains committed to creating legislation that will replenish the fund and have backing of Christie.
"We all know we need a transportation funding plan the governor will sign and we need it as soon as possible," said Prieto in a statement. "The Assembly has passed a bill and remains willing to compromise - as long as it's a bill the governor will sign into law."
The assembly bill combining a gas tax increase and sales decrease would have established a $16 billion TTF for an eight-year period funded at $2 billion annually. The state senate proposed a separate $20 billion 10-year TTF bill that also would have raised the gas tax 23 cents a gallon and also eliminate the state's estate tax as well as establishing income tax deductions on charitable contributions, but it did not have the support of Christie. State Senate President Steve Sweeney, D-Gloucester, voiced concerns that the sale tax drop in the assembly package would lead to around a $1.7 billion revenue loss when fully phased in.
New Jersey has utilized the TTF to pay for transportation-related construction projects since the program was formed in 1984. Christie did not include any TTF funding in his $34.8 billion fiscal 2017 budget he signed into law Thursday. Most of the state's $1.26 billion appropriation to the expired five-year $8 billion fund was utilized for debt service.
New Jersey's credit rating is the second worst of the 50 U.S. states due largely to high unfunded pension liabilities at A2 by Moody's Investors Service and A by Standard & Poor's, Fitch Ratings and Kroll Bond Rating Agency. Christie said after signing the budget Thursday that the spending plan includes the largest pension payment in New Jersey history with a $1.9 billion contribution to the state's defined benefit funds.
The state legislature is scheduled to be on recess next week. Prieto said Thursday he is prepared to call a session as soon as possible when a TTF deal is reached.