The Gimmick Wins for New Jersey Transportation Fund
Two things about the plan to refinance New Jersey’s Transportation Trust Fund by refinancing the existing debt.
(#1)They left the mother of all gimmicks, selling or leasing the Turnpike and/or Parkway on the table.
(#2)If you judge the success of a political solution by the fact that nobody is 100 percent happy, then this solution is a roaring success. Nobody will be holding celebration parties for this one.
Actually, the financial firms that will sell the new debt will make a couple of hundred million in fees and services. Yes, the bankers and lawyers always win.
According to today’s Star-Ledger (”Corzine’s transit fund rescue to sidestep gas tax increase“) NJ governor Jon Corzine will formally submit a plan to get a cash infusion into the NJ transportation trust fund by refinancing the funds outstanding debt. The plan will lower annual debt payments but add almost $11 billion in new debt to our states ledgers. They will also take about $100 million in auto and truck taxes that currently go into the general treasury and dedicate the money to the fund.
Corzine and the democrats in Trenton have given up on the idea of trying to convince the public that an increase in the gasoline tax would be the best way to replenish the transportation fund. So much for “making tough choices”. This isn’t exactly a profile in courage for NJ democrats.
I read somewhere that the governor doesn’t need legislative approval to do this. Luckily for him. Republicans need to come out strong against this, if only to make a statement. State senator Leonard Lance has been a strong opponent of the borrowing gimmicks that republicans and democrats have been using to avoid cutting spending.
Bubbling under the surface is the fact that the 2006-2007 budget will have a raft of new taxes and Corzine and the democrats don’t want to use up all their political capital fighting for a gas tax now. So my guess is that it’s a done deal.