Transportation Trust Fund Advocacy, June 2000
The following letter, sent to all Senators before the June 8 vote,
summarizes League concerns with current legislation. S16 was approved
by the Senate, but the bill to place the constitutional dedication on
the November ballot did not receive the needed votes. It will
probably be before the Senate again before the deadline to be placed
on the ballot
S.16 Congestion Relief and
Transportation Trust Fund Renewal Act of the Year
2000
Dear Senator:
While the League of Women Voters of New Jersey believes it is
essential to the future of New Jersey to provide a stable and
dependable source of funding for the Transportation Trust Fund, S.16
fails to provide a long-term solution. It is a four-year stopgap
measure to our massive continuing needs for transportation
infrastructure. Despite some decrease in the earlier years, the plan
continues to depend on long-term (20 year bonds) borrowing. The $433
million annual debt service payment for TTF in 2001 will increase
dramatically to reflect increased annual debt service payments on the
$2 1/2 billion in this bill. More will be needed to pay for the $500
million in bonds approved by the voters in 1999, and with
transportation capital projects bonded by other state authorities,
the debt service for transportation is likely to grow to more than
$700 million annually in just a few years.
If you vote to approve this legislation, the administration and
legislature in power in 2004 will face the exact same problem as you
face now, except it will be on a much larger scale. Most of the money
that you are being asked to constitutionally dedicate will be eaten
up by increased debt repayment costs. The legislature will need to
identify additional new revenues, of even greater magnitude, to fund
continuing capital infrastructure needs. The first year increase in
pay-as-you-go funding cited by the sponsors as a reason to vote for
S.16 will disappear rapidly, and any early year reduction in
borrowing will be replaced by increasing annual bonding.
The League cannot support S.16 because it provides no new revenue.
It merely shifts existing money from the General Fund, making it
unavailable for other state programs and needs. Furthermore, it would
constitutionally dedicate this revenue to transportation. As State
Treasurer Machold pointed out in his testimony, it would stabilize
funding for transportation capital needs but destabilize the state
budget.
The League does not oppose the use of revenue from the Petroleum
Products Gross Revenue Tax to fund Transportation Trust Fund capital
programs. There is a logical relationship between the revenue source
and its use for transportation related construction.
The League strongly opposes the constitutional dedication of $200
million in Sales Tax revenue. There are innumerable other demands on
sales tax revenue that have just as powerful a claim as the
Transportation Trust Fund which already has a variety of funding
sources dedicated to its programs.
During the past 6 1/2 years, 39 taxes have been reduced,
significantly reducing future revenues of the state. Billions in
borrowing—for schools, higher education, prisons, and other
state building needs as well as transportation—will place
enormous pressure on future state budgets. Any slowing of the economy
will force legislators to make terrible decisions on what programs to
reduce or eliminate. Constitutional dedication will exacerbate the
pain that will have to be inflicted on recipients of other programs
and services. New Jersey’s elected leaders have approved
increases in borrowing for transportation from $272 million in 1992
to $900 million in 2000. During the same period, you have refused to
increase the motor fuels tax, or any other new revenue source. It is
not acceptable for today’s legislators to force future
legislators to raise, and taxpayers to pay, even higher taxes, or
reduce other programs, because you refused to accept fiscal
responsibility for the programs you approve with your votes.
The long-term solution that you need to embrace is to provide
new tax revenue now in order to increase pay-as-you-go
funding and to reduce both the amount of future borrowing and
accompanying future increase in debt payments
Sincerely,
Sandra L. Matsen
President
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