the lack of any guarantee that the state will actually issue the bonds
and carry out the work even if approved
"Citizens must resoundingly defeat this bond issue to send a message
to our elected representatives that we will not allow them to manipulate
us into seeming support of their irresponsible actions regarding the
funding of capital construction for transportation," said Sandra Matsen,
LWVNJ League president. "The New Jersey Constitution gives citizens
the right to approve or disapprove increases in state debt by voting
on bond issues. Our representatives have scorned this constitutional
right by allowing state authorities to issue $5.6 billion in bonds
for transportation projects since 1992--without public vote. $1.5
billion of this amount is being bonded this year, three times as much
as the amount citizens will see on the ballot."
"Elected officials have shown a startling lack of fiscal responsibility,
not only by increasing the total cost of construction through borrowing,
but also by refusing to raise additional tax revenue to fund the costs,
even though it was clear several years ago that additional revenue
was essential," continued Matsen. The League pointed out that annual
borrowing for transportation purposes rose from $272 million in 1992
to $611 million in 1996, and to $1.5 billion in 1999-2000, using both
the Transportation Trust Fund and the Economic Development Authority
to issue bonds in the latest year. The cost of repaying principal
and interest on transportation bonds has ballooned to $9.3 billion,
and debt repayments soon will reach half a billion dollars annually,
the League reported.
"If they approve this $500 million bond issue, New Jersey citizens
should be aware that elected leaders will use their YES vote as a
justification for voting for a tax increase next year," said Matsen.
She pointed out that elected representatives, as part of their duties,
are responsible for raising adequate tax revenue to provide for essential
services, including transportation.
The League charged that this bond issue has been placed on the ballot
this year because the Transportation Trust Fund (TTF) expires in 2000,
eliminating the authority and with it the state's major source for
borrowing transportation money. The Fund cannot be extended unless
and until the administration and legislature approve an increase in
some tax, presumably the motor fuels (gasoline) tax, to pay for additional
capital spending.
Proponents of the bond issue are ignoring the $250 million, which
will go to the state for unspecified projects and are drumming up
support by focusing on the other $250 million for bridge repairs by
counties. They are playing up fear of collapse or closing of bridges
resulting in traffic bottlenecks.
The League pointed out that originally the bond issue called for
all $500 million to be spent on bridges, but that was changed at the
last minute. "This change seriously undermines the state's arguments
about the seriousness of the bridge emergency. Why, if bridge conditions
are so serious, has the state--having spent over $5 billion in state
construction funds and billions more in federal funds--failed to allocate
some proportion to address the hazards?" asked the League president.
Voters also should be aware that
passage of this bond issue does not guarantee that the
bonds will be issued and the construction undertaken. If
approved, the state would have a total of $1.3 billion of
voter-approved bonds that have not been issued. State
policy is to bond only $300 million annually of
voter-approved bonds. Other projects, including many
environmental protection projects approved by voters
years earlier, could be funded rather than the
transportation projects,concluded Matsen.
Bonding for
Transportation Capital Needs
1992-2000
|
1992
|
$272 Million
|
Transportation Trust Fund (TTF)
|
|
1993
|
495
|
TTF
|
|
1994
|
461
|
TTF
|
|
1995
|
182
|
TTF
|
|
1996
|
611
|
TTF
|
|
1997
|
674
|
TTF
|
|
1998
|
715
|
TTF
|
|
1999
|
700
|
TTF
|
|
2000
|
900
|
TTF
|
|
|
633
|
Economic Development Authority
|
TOTAL: $5.643 billion
|
Debt Service on
Transportation Bonds
|
Repayment of
Principal & Interest
|
|
Existing Debt Service, 1998
|
$5,279,952,211
|
|
Anticipated Debt Service on $1.4 Billion for
1999 and 2000
|
$2,877,099,250
|
|
Estimated Debt Service on Additional $833
Million in 2000
|
$1,191,000,000
|
|
TOTAL
|
$9,348,051,461
|
This fiscal year, 1999-2000, the state will borrow $1.53 billion
for transportation projects without public vote. The Transportation
Trust Fund is authorized to borrow (bond) $900 million. It has issued
$454 million and is preparing to bond the rest. In addition, the state
used the Economic Development Authority to borrow another $633 million
for Light Rail Projects in South and North Jersey.
In 1998, the state reported that debt service on bonds issued by
the Transportation Trust Fund and an estimated $1.4 billion in bonds
to be issued in 1999 and 2000 totaled $8.157 billion. This estimate
does not include an additional $200 million in bonding by TTF-authorized
for 2000 and the $633 million bonded by the Economic Development Authority.
Using the same ratio of interest to principal used in the state's
debt report, 43%, total debt will increase to $9.3 billion for transportation
projects alone.
The state has used money borrowed by the TTF to pay for some salaries
and repairs, items that it is reasonable to believe should be paid
for from annual tax revenue rather than through bonding
LWVNJ 10/99
