PoliticoNew Jersey- With the state Transportation Trust Fund nearly out of cash and few signs of progress in the Legislature, Gov. Chris Christie said on Wednesday that he was loath to back an increase in the state’s gasoline tax and said lawmakers should seriously consider developing a plan built around general-fund spending.
“The Legislature says they’re for better roads and bridges. OK. And for more mass transit funding,” the Republican governor said at an unrelated news conference in Trenton. “Well, then maybe they should have to choose inside the general fund about how to do that rather than just asking the people of the state for more money every time they want to do something. Make choices. Make choices inside the general fund. There’s places to cut.”
Such an approach — at least in the short term — would likely require enormous spending reductions to produce anywhere near the level of resources the state has grown accustomed to since the infrastructure trust was created more than two decades ago.
The TTF currently spends $1.6 billion per year in state revenues on road, bridge and transit projects, supported in part by the state’s gas tax. But the fund’s debt has grown to such extraordinary levels that the fuel taxes can no longer sustain new spending or bond offerings.
Christie appeared on Wednesday to reject even the premise of the Transportation Trust Fund, which was signed into law in 1984 by Republican Gov. Tom Kean and was designed to “provide a stable and predictable funding source for transportation system improvements in New Jersey.”
“That was 25 years ago and no Legislature or governor has raised the gas tax in 25 years. So I think that’s obsolete,” Christie said. “The concept, I mean, is obsolete.”
The governor offered some supportive words for a proposal offered by state Sen. Jennifer Beck, a Republican from Monmouth County. Beck has called for consolidating transportation agencies, implementing cuts to public worker health benefits and tapping revenues from various sources to produce enough money for a new, $1.6 billion trust fund — all with no tax increase.
Beck has said her proposal is feasible and even some of its most ambitious components, like putting state agencies under one roof, could be done in a few years. Democrats and advocates for infrastructure spending, though, have said Beck’s plan is merely pie in the sky thinking that does little to solve the immediate problem facing policymakers.
Christie said the plan “deserves some merit and some study.” It would be heavily reliant on the ups and downs of the state’s economy. The primary source of revenue for the general fund is the income tax, the state’s most volatile. It’s one reason the treasury’s initial revenue projections were off by about $1 billion for the current and next fiscal year.
Beck built a $100 million annual “cushion” into her plan to account for slower than expected growth. The governor said he does not believe the proposal would be too dependent on the health of the state’s economy.
“There’s always going to be a significant amount of general fund weight on the health of the state’s economy,” Christie said. “But, right now, the state’s economy is doing extraordinarily well. We’re three-tenths of a point underneath the national unemployment rate. We have more people employed now than we had at any point in the state’s history. So the state’s economy is doing quite well at the moment, in a macro sense. So this might be exactly the right time to do that.”
The current trust fund will be out of cash by early August, state officials have said. But the governor’s budget proposal, due by the end of June, assumes a solution will be in place by that time.
Christie has refused to negotiate with Democrats about the trust fund, though he has said publicly that he will consider a tax increase only if it comes with tax cuts elsewhere, something he calls “tax fairness.” There have been discussions in the Senate about phasing out the estate tax, creating a write-off for charitable giving, raising the exemption threshold for retirement income and boosting the earned income tax credit
The governor, who noted on Wednesday that he has “outlined for them what would be necessary for me even to consider any increase in any other taxes,” also said he was not concerned that the Legislature appeared to have much work left to do.
“Often the Legislature can’t do more than one meaningful thing at a time, right?” Christie said. “So we finished Atlantic City on Friday. And then there was a holiday weekend. And I suspect they’re going to get to work now on TTF.”
Still, he said it appeared Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto were not in agreement on the issue.
“As far as I can tell, there’s no agreement between the Senate president and the speaker at this point, so they probably don’t have anything yet they want to convey to me, because they don’t have a unified position on it yet,” he said. “These things happen relatively quickly. I’m not sitting here, lying awake at night. It will be alright.”
In a statement, Prieto said restoring the trust fund “has always been a top priority for me, no matter what other issues were being discussed.”
“I was discussing the impending crisis long before others, and remain ready and willing to negotiate a responsible, long-term plan that overall is fair to working class residents,” he said.”
Luke Margolis, a spokesman for Sweeney, said in a statement that Christie “knows that we have offered solutions.”
“He also knows time is running out to solve this crisis,” Margolis said. “The truth is, the only leader who has yet to propose a solution is the Governor. So what’s he waiting for? He likes to talk about leadership, well now is the time for him to step forward and offer his recommendation. We are anxiously awaiting his suggestions.”