Short-Term Fix Can End Transportation-Funding Crisis

This solution is by no means ideal. But given the alternatives, it’s the only way forward.

Published on Aug 23, 2016 in Tax and Budget

This op-ed appeared in the August 23, 2016 edition of the Asbury Park Press.

After almost two years of warnings from legislative, business and labor leaders about the need for steady and significant transportation funding, and malignant neglect by the governor, New Jersey’s transportation problem has broadened and deepened into a real crisis. The latest manifestation of this crisis is the governor’s executive order, issued last week, which aims to shift state spending in other areas to emergency transportation work until the Transportation Trust Fund is reauthorized.

The time for action is now, and it’s clear the best course for such action is relatively short-term. Let’s put people back to work and ensure a robust transportation construction program by authorizing a little more borrowing. All of the other “solutions” on the table are far too damaging to the state’s future, and the gridlock in Trenton has become an insurmountable obstacle.

This solution is by no means ideal, and it’s not an easy one to recommend. But given the alternatives, it’s the only way forward.

The evidence is now powerful that the three-month effort by both legislative leaders to generate big proposals with veto-proof support in both legislative chambers is on life support. During that period, the governor floated above the battle focusing either on Republican presidential politics or on his stillborn school aid idea.

Here’s why a short-term fix is the best option.

First, ignoring the bankruptcy of the transportation fund is not a plausible or responsible option. New Jersey’s undisputed and most enviable asset is its location in the middle of the world’s largest consumer market with convenient access to the world’s most important city to the north and Philadelphia to the south. That asset disappears if the highways, bridges and public transit to move around, through and across the state are neglected. New Jersey is falling further behind in improving and modernizing its road and transit facilities, and failing to find the money to at least keep up will set us back even further.

Second, while anything is possible in the world of politics, legislative leadership should proceed on the assumption that Gov. Christie has placed his standing with national Republicans above the needs of New Jersey. Our governor will not violate what is now the First Commandment of the Republican Party: thou shall not approve any increase in tax rates. As chair of Mr. Trump’s transition planning team and key campaign surrogate, it is nearly impossible that our governor would increase any taxes before the election – and waiting until after is not sensible, as we’ve already lost two months of the peak construction season.

Third, a temporary solution exists. The legislature should authorize the issuance of enough new bonded debt to permit the state to advance construction and purchase contracts through June 2018, by which time a new administration and legislature will be in office. The June deadline would require the new governor and legislature to give immediate and greatest attention to permanent financing of transportation. It would allow for two more years of a robust, $1.6 billion a year Transportation Trust Fund for both highway and transit projects and cost less than $100 million a year in state appropriations to cover the debt service.

While this is not the long-term fix many, including me, had hoped and advocated for: a long-term stand-alone plan with dedicated funding for transportation purposes alone. But this temporary fix preserves transportation funding and puts people back to work across the state. And, crucially, it does so without endangering the state’s future by blowing a hole of between $900 million and $1.8 billion a year in the state budget, as do the two proposals considered by the Senate and Assembly.

Yes, the proposal to enact a modest, short-term solution while awaiting new (and presumably more effective) leadership is terribly short of a long-term solution, but it appears to be the only solution available. Given that it doesn’t even require a tax increase, we hope and assume that our governor will sign this measure and end the crisis.



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