Financial expert explains why you need to vote no on question 2 (Guest column)
You know I've been telling you to #VoteNoOnTwo on November 8. We've received so many calls from our listeners that are confused as to why I'm urging against a dedicated fund. Isn't a dedicated fund exactly what we want the politicians to do with the money? Wrong!
A special thanks to financial expert Peter Humphreys who called in to my show today to talk about the financial ramifications of voting "yes" on ballot question #2 and why you need to vote no. Peter explains, from a financial standpoint, what casting a no vote, is the right thing to do.
You can listen to Peter's full on-air interview in the YouTube clip above. Peter lays out his reasoning for why you should vote no on ballot question #2 below.
By Peter Humphreys and Ellen Steinberg
They dressed it up like we would be approving a good thing, dedicating gas tax to the Transportation Trust Fund (TTF). But they are really asking us to approve the 23 cent gas tax hike. Sneaky, eh?
Ballot Question #2 asks a simple, seemingly innocuous question about whether gas tax money should be constitutionally dedicated to transportation funding. Some of the gas tax money is currently dedicated. Just not enough for the borrowing needed in the new TTF plan.
The new TTF plan calls for spending $2 billion every year, but the 23 cent gas tax hike won't generate enough money for this. More borrowing is needed. The plan calls for $12 billion of new borrowing by the TTF during the next eight years. By 2024, the TTF will be a whopping $27.5 billion in debt.
The bill that the Governor just signed has a provision in it that says that the new TTF borrowing can only be paid back from constitutionally dedicated revenues. It states:
“The payment of debt service on transportation program bonds and any agreements issued in connection with such transportation program bonds shall be paid solely from revenues dedicated pursuant to the New Jersey Constitution … and deposited into the Transportation Trust Fund Account ...”
Ballot Question #2 is really a referendum on the 23 cent gas tax hike.
People get to approve or reject it. People just haven’t been told.
Ballot Question #2 doesn't actually ask whether we should raise the gas tax. Instead the question is phrased as to whether we should use the gas tax revenues for transportation funding. At first read, this seems like a no-brainer. Transportation taxes going to transportation funding. But if the new 23 cent gas tax hike isn’t constitutionally dedicated to the TTF, the TTF plan will not work. If you vote “NO,” the TTF cannot borrow any more money. The TTF plan will unravel, and with it, the 23 cent gas tax hike. The legislature will have to go back to the drawing board and come up with a plan that works, one that does not raise the price of a tank of gas by $5 and one that does not rely on borrowing without a means of repayment.
Over the next couple of weeks you are going to hear that a “NO” vote means our road system will crumble and people will be out of work. NONSENSE. We have already suggested an interim plan which raises the gas tax TWO cents as a stop-gap measure. It will provide as much spending on the roads in fiscal 2017 as the TTF plan and it will have people working on the roads. As to the sales tax reductions, scrapping of the estate tax and other concessions given up by the legislature, these are not tied financially to raising the gas tax. They were just a horse trade so Governor Christie could pretend he hadn't raised taxes.
The gas tax is a separate issue. A “NO” vote on Ballot Question #2 is not a vote against repairing our roads and bridges. A "NO" vote is a vote against the 23 cent gas tax hike. It will force the legislature back to the table. It will force them to examine what really needs fixing (no more New Jersey left turns) and why some claim we pay up to 8 times the national average for the same road work as other states. It will force the legislature to come up with a transportation plan that is sustainable, and not one that plunges us into more debt with no provision to pay it back.
If we are ever to put New Jersey's finances back together, voting “NO” on Ballot Question #2 on November 8th is a great place to start.
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