State Gets Green Light To Borrow $1.3B For Transportation Work
State Treasurer Andrew Sidamon-Eristoff told the committee that in addition to keeping transportation projects on the track, the borrowing is necessary because, “As Treasurer I cannot advise you or the Governor to continue financing the Transportation Capital Program in the absence of an imminent new money (Transportation Trust Fund) issuance. As every day of delay places additional stress on our General Fund’s cash position: we have reached a ‘tipping point’ regarding the sequence of necessary transactions: we need approval now to move forward…..”
GOP Assemblyman Joe Malone,a member of the panel says the cash is needed to, “Keep these projects going and create more work and more jobs for New Jerseyans and hopefully rebuild the infrastructure of the State of New Jersey……We have hundreds of letters that have come into the offices and emails about the necessity to get this done quickly.”
Democrats on the committee agreed the cash is necessary, but they expressed concern about the state’s growing debt problem. They also questioned if the bond issuance violates the law banning the state from borrowing without voter approval. Sidamon-Eristoff said the transaction is legal because it represents previously approved borrowing.
Jeff Tittel, executive director of the New Jersey Sierra Club says, “We’ll be paving a road next year with this money which will have to be paved over four more times before the bonds are paid off in 30 years….We should not be borrowing against the future when it comes to roads. It makes no sense. Because we’re doing so much borrowing we’re cutting back on the amount of money we’re spending on transportation projects.”
Press for a better solution, Tittel responded, “They need to come up with a long-term fix and there are a lot of different ways of doing it. One could be raising the gas tax.”
Governor Chris Christie is steadfastly opposed to hiking the gas tax, but Tittel says Christie is already hitting commuters by recently allowing tolls to be dramatically increased.
The State League of Municipalities supports the bonding saying the action is essential, in order to insure that the existing NJDOT/NJTRANSIT capital programs remain solvent, and that the Governor’s proposed 2012 capital plan is properly funded. The League feels it will contribute, in the short-term, to our State’s economic recovery. And it will provide crucial funding that is critical to our State’s long-term prosperity.
Christie put forth a five-year transportation capital plan last year that increases pay-as-you-go funding. Still, $600 million in bonds were issued in May and an advance from the general fund has been used since August.