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Transportation "Trust" Fund Thoughts
We don't
need a gas tax to repair our roads.
 Neither Party possesses a monopoly on poor fiscal policy. A
few years back, a Republican administration proposed to
increase the gas tax. It was a rotten idea then; it has not
improved with age.
At that
time, some of the gasoline tax revenues still ended up in
the general fund, as did the receipts from the Petroleum
Products Gross Receipts Tax. Then, as now, the TTF faced
bankruptcy as a result of shameless, ridiculous borrowing.
Then, as now, a few lonely conservatives stood up to
vociferously oppose the tax grab. We had the better of the
argument then; we have the better of the argument now.
No one
disputes that maintaining transportation infrastructure
rates among the most important of the core obligations of
state government. But we conservatives recognized then, as
we do today, that in the TTF, State government had produced
an entity designed to go bankrupt every few years. Instead
of using its tax receipts to pay for necessary
transportation projects on a "pay as you go basis", it
leveraged the tax receipts to underwrite borrowing. This
enabled it to front-load spending – always a desirable thing
for incumbent politicians who enjoy presenting checks and
attending ribbon cutting ceremonies. But repaying the
mounting debt eventually consumed all the available tax
revenues. New revenue must be found, or construction will
stop.
We conservatives proposed a fiscally
responsible alternative:
- dedicate ALL the gasoline taxes to the TTF
- dedicate the GRT to the TTF
- dedicate a penny on the sale tax to the TTF
- and, for good measure, cut the sales tax by a penny.
At the
same time, we proposed that the TTF be forbidden from
borrowing and that the Fund be constitutionally dedicated to
prevent raids on it from cash strapped administrations.
This
would have required some discipline – other governmental
spending would not have been able to increase above the rate
of inflation – but it would have provided more than $1
billion per year for the TTF, in perpetuity. Problem
solved.
We
defeated the proposed tax increase. Later, leadership
proposed (and enacted) a dedication of the balance of the
gasoline tax and the GRT to the Fund. They say imitation is
the subtlest form of flattery; what about outright theft?
Unfortunately, they did not constitutionally dedicate the
money, nor prohibit future borrowing. Hence, we face the
same problem yet again.
Many of these solutions would solve the problem again today WITHOUT any gas tax increase.
First, the TTF MUST be constitutionally dedicated strictly to transportation expenses.
Second, it MUST be prohibited from borrowing any more money.
Third, it needs a stable source of revenue. The gas tax and the GRT produce only just enough to pay for the ill considered debt. One cent on the sales tax provides $1 billion, sufficient, for the time being, to fund necessary projects while the debt is repaid.
In the last two years, the McGreevey administration has increased taxes by $3 billion, and expenditures to match. Despite this shameful record of profligacy, it contends that needs another $1 billion or so of our money to attend to its basic duty to maintain transportation infrastructure. It doesn't.
Cutting spending isn't that tough. For example, aid to Newark could be slashed by the $200 million it received from the Port Authority for Newark Airport. That money could – should – be used to support its own schools instead of wasted on an Arena. The program to provide free day care at every Abbott school could be scotched, saving hundreds of millions more. Restricting Abbott schools to the state average expenditure on school administration (no more quarter million dollar superintendent salaries, two chauffeurs, limos, paid Boards of Ed, etc.) would save another $100 million or so. For good measure, eliminating giveaways to Camden and "Christmas Tree" spending on purely local projects in Democrat districts saves hundreds of millions more.
That should be sufficient to enable the state to get by with less sales tax revenue in the General Fund. Coupled with the huge growth that the national Republican economic policies are producing, tax revenues from existing levies should increase, enabling the state to fund all of its necessary programs without digging ever deeper into the taxpayers' pockets.
New Jersey is already among the highest taxed states in the nation. With $25 billion of our money, the assertion that $1 billion can't be found for roads and trains is absurd. If we simply stopped borrowing and stopped profligate spending – especially in the cities – more than sufficient revenue would exist to adequate fund our transportation needs.
Indeed, there'd be lots left over for real property tax reform.
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