No gas tax, NJ’s not paying for roadwork … so your property taxes could spike
Senate President Stephen Sweeney said he’ll meet this week with Gov. Chris Christie to propose new options for tax cuts that can be adopted along with a 23-cent a gallon hike in the gas tax.
Not a moment too soon, say advocates for a Transportation Trust Fund solution.
Construction work is currently idled, at Christie’s direction, and counties and municipalities say they – meaning property tax payers – will face extra costs for the shutdown and eventual restart.
And if there’s not a solution and all costs for local road and bridge projects are shifted to counties and municipalities, the cost could get hefty. Construction and borrowing costs aren’t limited by the 2 percent cap on increases in property tax levies.
“Who’s going to pay for that infrastructure? It’s going to be counties and municipalities,” said Hope Township Mayor Timothy McDonough. “If you want to see tax increases in this state, there you go. That’s where you’ll see it.”
Warren County Freeholder Ed Smith said it would amount to a 10 percent increase in the county’s property tax rate if all the money received from the Transportation Trust Fund was instead raised through local taxes.
“We do not have the ability to raise the kind of revenue necessary to maintain what is ultimately a statewide infrastructure,” Smith said.
“It will certainly lead to more borrowing,” said John Donnadio, executive director of the New Jersey Association of Counties. “… So certainly it will have an impact long-term on local property taxpayer dollars.”
Sweeney’s meeting with Christie will be the first in two weeks, when a bipartisan plan preferred in the Senate was pushed aside in favor the idea of pairing the gas-tax increase with a penny-per-dollar cut in the sales tax. That idea stalled in the Senate, which said the state would lose too much revenue.
“The Senate’s working on a couple proposals that we’re going to present to the governor this week,” said Sweeney, D-Gloucester. “I don’t know what day, but we’ve been in contact with his office, and I should be having a meeting – I will be having a meeting this week with the governor.”
“We’re going to offer a couple compromises to the governor. Hopefully it’s something that might pique his interest, where he’ll offer something back,” Sweeney said.
Sweeney said he’s “really not” confident that something will get done before elected officials attend national political conventions – the Republicans next week in Cleveland, the Democrats the following week in Philadelphia. Sweeney said the GOP convention is “the bigger problem” because of its distance.
“It’s not as much of a problem for us as the Democrats because we’re in Philadelphia. If we could come to an agreement, we could always bring people back because we’re right across the river,” Sweeney said. “But time is tight, and we have a serious problem.”
Christie spent Monday in Virginia, campaigning with presumptive Republican presidential nominee Donald Trump. Christie is apparently among the options to be selected as Trump’s vice presidential running mate. That choice will probably be announced within days.
Tom Bracken, chairman of the Forward New Jersey coalition, said a solution is “way, way past due” and called for a special legislative session. He said the work stoppages and indecision are bad for the economy and hurt perceptions of the state among businesses deciding where to invest or locate.
“It’s just really unfortunate people can’t get together and put New Jersey first ahead of everything else on their plate and get something resolved that is probably the most significant that can happen – it definitely is the most significant thing we can do for this state is fix our infrastructure,” said Bracken, president and chief executive officer of the New Jersey Chamber of Commerce.
“We know that there are a lot of different priorities going on with a lot of different people at this time, but there can’t be any more important, I think, in the state of New Jersey, that relies so much on its infrastructure, than a decision about the TTF,” said Mercer County Executive Brian Hughes.
Bracken welcomed word of the pending Sweeney/Christie meeting.
“It’s a positive step. The three players, as we know, that have to get on the same page are the Senate president, the Assembly speaker and the governor. And if two of the three are meeting, maybe they could bring in the third and sit down and talk and hammer out a deal,” Bracken said.
Sweeney said he would welcome Assembly Speaker Vincent Prieto, D-Hudson, at the meeting but that his main priority is getting the governor’s agreement.
“You don’t need a special session, but you do need the governor on board because the Assembly has made it crystal clear that nothing’s going to move without the governor,” Sweeney said.
Transportation projects around New Jersey funded with state money have been temporarily shuttered, for at least this week, while state officials decide how to use the remaining money in the Transportation Trust Fund, which entered the new fiscal year July 1 without a source of funds for new projects.
Federally funded projects aren’t being idled, and those needed for safety reasons – such as the emergency work being done to repair a bridge on Route 202 in Bernardsville.
An association of transportation contractors estimates that shutting down and then restarting a construction project can add an average of 10 percent to a project’s cost. The state disputes that estimate. More than $675 million in construction projects are being idled.
Department of Transportation communications director Stephen Schapiro questioned those estimates.
"NJDOT is not aware of any industry standard or rule of thumb for calculating demobilization costs as every project is different, and the department has no idea how these numbers were derived," Schapiro said.
Some towns have indicated they don’t plan to adhere to the state’s directive shutting down projects temporarily. There’s risk associated with that, indicated Joseph Brickley, the Burlington County engineer and president of New Jersey Association of County Engineers.
“Typically in our funding agreements, it’s very distinct. We take our direction from them. Failure to follow their direction will result in a loss of funds,” Brickley said.
"Any municipality and/or contractor who works in defiance of the shutdown order assumes all associated risks," said the NJDOT's Schapiro.
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