DOT commissioner: Transportation Trust Fund will run out of cash in August
New Jersey's acting transportation chief told state lawmakers that his department would likely run out of money to pay for new and ongoing transportation projects in early August if Gov. Chris Christie and the Legislature fail to reach a resolution to renew the ailing Transportation Trust Fund.
Testifying before the Assembly Budget Committee on Wednesday, Richard Hammer, acting Department of Transportation commissioner, said that the governor's proposed 2017 fiscal year budget includes $1.6 billion for transportation projects, but that the spending is contingent on a renewal of the trust fund.
The fund is the primary mechanism used by the state to finance highway, bridge and mass transit projects, but it is overburdened with debt and due to go belly up in July unless a new revenue source is identified.
Most of the discussions on replenishing the fund have centered on increasing the state's comparatively low 14.5-cent gas tax. But Christie has insisted he will not agree to a gas tax hike unless the Legislature also reduces other taxes.
Almost all of the revenues from the gas tax, as well as some motor vehicle fee revenues, are being used to pay off the trust fund's existing debt.
Without a resolution, Hammer told lawmakers the state would be unable to undertake new projects in the upcoming fiscal year, and would also be unable to pay the bills for about $2.5 billion in previously approved projects that would likely come due after July 1.
"We have some carryover that would go into the new fiscal year, but probably not too deep into the summer," Hammer said.
He said the exact date would likely occur in early August.
Hammer told lawmakers that the state has no ability to borrow more money for transportation or plans to devote other tax revenues for transportation spending, often described as "pay go."
Among the projects the trust fund is expected to provide money to is the proposed Gateway rail tunnel connecting New Jersey and Manhattan, as well as other transit, road and bridge projects.
Nearly 300 bridges in the state have been identified as "structurally deficient" and in need of repairs.
Assemblyman Troy Singleton, D-7th of Palmyra, said the state's proposed transportation projects are essentially meaningless without a trust fund fix.
"I don't want to say they're worthless, but effectively they're just words on a piece of paper without an identified funding source," Singleton said.
Later, he issued a statement saying the state's economy and public safety were at risk.
"The economy of our entire state is dependent upon a functioning and reliable transportation infrastructure. The lack of action by Gov. Christie is a risk to our state's economic growth and potentially the safety of road travelers. We cannot afford another day of silence from the administration," Singleton said.
Pressed by lawmakers, Hammer said that there has been no "slowdown" in DOT projects, and that he was confident a resolution would be reached before the end of the current fiscal year.
"I would not say it's a crisis," he said. "At this point, I'm confident the Legislature and governor will work out a resolution for the (trust fund). ... There's still plenty of time for a collaborative approach between the governor and Legislature to reach a resolution."
Democratic lawmakers on the panel expressed their doubts, noting that every governor since the trust fund was created in 1984 has presented a plan for renewing it.
Christie has insisted the Democratic-controlled Legislature must put forward a proposal because the state constitution requires any tax increases to originate in the Assembly.
Hammer alluded to that requirement, saying in his opening statement that he eagerly awaits the Legislature's plan to the governor.
Budget chairman Gary Schaer, D-36th of Passaic, said time was running out for a resolution.
"You're hearing frustration from us. You're hearing frustration from me," Schaer said. "This is not where we were supposed to be in the middle of April. We were supposed to be far advanced of this."