Is this the plan to pay for NJ’s roads and rail … without a gas tax hike?
Proposals to help renew the state’s construction fund for road and rail projects — without raising the gasoline tax — are being formally introduced today by a Republican state senator.
Sen. Jennifer Beck, R-Monmouth, outlined her plan — a revised version of one she first publicly discussed in December — on Bill Spadea's New Jersey 101.5 morning show. Beck's bills are the first by any legislator to provide a plan to address the looming crisis for the Transportation Trust Fund, expected to run out of money this summer.
Suggested gas tax hikes of 20 or 25 cents per gallon to replenish the TTF are "insane," she told Spadea. And she said they're unnecessary.
"I've spent a lot of time on this. It's a well-researched plan," she said.
Under Beck's plan, the state would pay $1.6 billion a year for seven years. Of the $11.2 billion, 60 percent would be funded on a pay-as-you-go basis; the rest would be borrowed through bonding. Beck told Spadea the amount paid through bonding would decrease each year until the state is paying 96 percent of its TTF costs on a pay-as-you-go basis in the seventh year.
"It will take fortitude of the executive branch and Legislature," she said.
Two key elements that need legislative approval would be the merger of all transportation agencies and a reduction in public worker health benefits. Beck also proposes hiking fines for some motor vehicle offenses, such as texting while driving, to generate $230 million a year.
It’s unclear if the plan, or even elements of it, will gain traction, as Beck is in the minority party in the Democrat-controlled Legislature. New Jersey 101.5 caller Greg told Beck's he's doubtful:
"The Democrats feel emboldened to just tax away because nobody votes," Greg said.\
Senate President Stephen Sweeney, D-Gloucester, seemed to dismiss the idea.
"I'm looking at real plans, OK? Not ones that sound good," Sweeney said.
But Gov. Chris Christie reiterated on last night’s “Ask the Governor” that it’s worth a look. He also said he would only consider a plan that provided "tax fairness" — but didn't specifically address whether he'd rule out a gas tax hike entirely. Related clip:
And as Beck points out: Right now, she’s the only person that has a plan.
“We’re coming up on a deadline. It’s not far away. We need to do it. It’s critical to our state’s infrastructure,” Beck told New Jersey 101.5 this week.
The Transportation Trust Fund was created in the mid-1980s as a more reliable way to pay for bridge, rail and road projects. As of the end of next month, the current authorization expires. The TTF will have no authority to borrow and must put all its revenues toward paying off existing debts.
Beck's plan calls for the state to merge all the state’s transportation authorities and the Department of Transportation – meaning things like New Jersey Transit, the Turnpike Authority and the South Jersey Transportation Authority.
Beck says at least seven states have merged their transportation agencies. She said Forward NJ, a coalition that is advocating for a TTF solution, projects such a merger could save $100 million a year. The senator is adopting a more conservative projection of $50 million.
Even bigger savings would be generated by reducing the health benefits provided to public workers, from a level deemed ‘platinum’ to one called ‘gold’ under the federal Affordable Care Act. Beck says that would eventually save the state $180 million a year or more, plus lead to savings in local property taxes.
The Forward NJ coalition isn't on board with Beck's plan, however. It said in a statement this morning: "Forward New Jersey has not endorsed any part of Senator Beck’s proposed TTF plan and in fact has deep concerns about it."
Greg Lalevee, chairman of the Engineers Labor-Employer Cooperative, said there are too many unanswered questions about Beck's plan, such as how the new debt would be paid for and whether the needed economic growth would materialize.
"This is not a fiscally sound plan, it is a fairy tale at best and a nightmare at worst," Lalavee said.
New Jersey 101.5 caller Chris told Beck Thursday he doesn't "want to see any kind of a gas tax increase either, but I also don't want to see us baking debt into our operating costs."
And though much of Beck's plan depends on doing so, she told Spadea "I agree with him. We really shouldn't be borrowing to do transportation" — highlighting the transition to a greater pay-as-you-go commitment as the seven-year plan moves forward.
Noticeably absent from the plan is any increase in the state’s 14.5 cents per gallon gas tax.
“We already pay the highest taxes in the nation. Do we need to be the highest in every category?” Beck told New Jersey 101.5 this week.
Beck is asking residents to sign a petition against a gas tax increase. The petition, by Senate Republicans, is not specific to her plan.
Beck has also said the state can use revenues from a projected 3.15 percent a year increase in tax collections -- down from the earlier projection of 3.34 percent, to reflect this year's revenue shortfall -- to pay for road projects. Democrats are intending to use that money to pay for increased contributions to the pension funds.
Democrats have been calling for $2 billion a year in spending from the TTF.