Voters approved a constitutional amendment on November 8, securing all of the state’s fuel-tax dollars solely to fund and finance road, bridge and rail projects. Getting to this point, however, was a drama the size of the city of Trenton.
Historically, funding for New Jersey’s transportation projects has come from borrowing and from outside funding sources such as the Port Authority. However, in 2014, testimony from legislative budget committee meetings showed a five-year Transportation Trust Fund (TTF) finance plan enacted in 2011 was already low on cash.
There was fear that the TTF would go bankrupt. The Forward NJ Coalition began a campaign to raise awareness about what could happen to the state’s roads, bridges and rail system if there was no funding for transportation. The group’s campaign consisted of television and radio ads, letters to newspaper editors, social media, and other formats.
The group also lobbied leaders in Trenton, pointing out that in nearly three decades the state’s gas tax had not been increased, even though transportation spending had overtaken annual revenues, plunging the TTF into debt.
Last summer, all state-funded transportation projects were shut down when the Democratic legislative leaders would not go along with passing a gas tax hike to fund the TTF. They did not agree with a package of tax cuts that the governor and other Republicans insisted must be passed with any increase of the gas tax.
When the five-year TTF finance plan did run out, the Assembly went along with Gov. Christie on a sales-tax cut that would cost the state budget an estimated $1.6 billion. However, the Senate refused to pass it.
Christie and the state legislature finally made a deal last September to increase the gas tax by 23 cents per gallon, but folded into that deal was an agreement to eliminate the estate tax, create a tax deduction for veterans, and reduce the state sales tax in 2018 from 7 to 6.625 percent. That bill was signed by the Governor on October 14.
The gas-tax increase, which raised the per-gallon tax from 14.5 cents to 37.5 cents, was scheduled to go into effect on November 1, right before Election Day. It is expected to generate more than $1 billion in annual revenue and put the TTF is back on track for the next eight years. However, there was no official dedication to the TTF in place to prohibit the revenue from being used other purposes through the annual state budget process.
Recognizing this vulnerability, Assembly Speaker Vince Prieto (D-Hudson) sponsored the ballot question, the New Jersey Dedication of All Gas Tax Revenue to Transportation Amendment, which asked voters whether or not all gas tax revenue should be required to be deposited into the Transportation Trust Fund (TTF).
Voters approved the constitutional amendment on November 8, securing all of the state’s fuel-tax dollars solely to fund and finance road, bridge and rail projects.
The TTF deal remains controversial with some Democrats calling it too generous to the rich who benefit most from the tax cuts; and many Republicans condemning the size of the gas-tax hike. Additionally, there was confusion over whether the ballot question was really a referendum on the tax increase itself and whether the wording made it clear that voting yes also meant agreeing that the revenue could be used as backing for new borrowing to finance major transportation projects.