By Tyler Kane, Transportation Investment Advocacy Center
New Jersey Gov. Chris Christie (R) rejected the latest proposal that would have provided a funding solution for the state’s depleted Transportation Trust Fund (TTF). The plan, introduced by Senate President Stephen Sweeney (D) on July 13, has yet to be fully publicized. However, Christie called the plan “ridiculous,” claiming, “what he proposed to me was unacceptable, and he knows it.”
The rejection is yet another obstacle to finding a sustainable, long-term funding solution for the TTF. Due to several factors, including the rising cost of construction due to inflation and the state’s history of bonding in order to fund transportation projects, on July 1 the TTF was depleted to the point that it lost its borrowing power. At that time, Christie ordered a shutdown of all state-funded and non-essential transportation construction projects until new revenue is approved. The TTF is projected to be bankrupt by mid-August if a plan is not passed by the legislature and the governor.
Christie most recently agreed to legislation implementing a 23 cents- per-gallon gas tax increase, while also dropping the state’s sales tax from 7 to 6 percent as a measure to protect “tax fairness” in the state. The plan, however, was rejected by the democrat-majority Senate, who refused to reduce the sales tax out of concern that it could deepen issues with deficit spending. That plan was preceded by another failed proposal that coupled a similar 23 cents-per-gallon gas tax increase with a phasing out of the estate tax, increasing the retirement income tax exclusion threshold, and creating new tax deductibles for charitable donations.
According to an analysis by ARTBA, the shutdown cost the transportation construction industry and New Jersey taxpayers $41 million in its first week and could continue to cost as much as $9 million per week in lost sales, wages and economic activity in the state. Between 1,300 and 1,700 workers have been displaced. New Jersey Transit has also halted construction of new buses, which are both ADA compliant and environmentally efficient.