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Budget Gimmicks tapped out, Chrisco turns to borrowing to fund NJ Transportation

Posted by WillD on Wed May 30 03:13:32 2012

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Christie backtracks on financing transportation projects

New Jersey’s governor often portrays himself as a man of his word.

Before taking office he vowed he wouldn’t raise taxes on millionaires and so far, he hasn’t. He’s also taken on the New Jersey Education Association by pledging to reform tenure and funding, infuriating numerous educators, administrators and legislators from Hackensack to Cape May.

So it might seem surprising that the governor known for slashing budgets, requiring public employees to contribute more to healthcare and pension costs, and putting a chokehold on various types of aid is changing his tune a bit on one of his major funding concerns: transportation. The change is inconsistent with past statements made by Christie so we’re putting that change to the Flip-O-Meter.

The Flip-O-Meter rates politicians' consistency on particular topics from No Flip to Full Flop. The meter is not intended to pass judgment on their decisions to change their minds. It gauges whether they did.

Christie’s stance changed with Wednesday’s announcement that the administration will borrow an extra $260 million for transportation projects. That’s contrary to a Christie announcement more than a year ago that through his transportation capital plan, the state would begin relying less on borrowing for that type of work.

From a state Department of Transportation news release on Jan. 6, 2011: "Today, we are continuing to put New Jersey on the path towards fiscal health and proposing a sensible and responsible plan that prioritizes vital transportation projects, while limiting the already-heavy debt burden carried by the taxpayers of our state."

So what happened? Call it a miscalculation of sorts.

Both the Christie administration and David Rosen, chief budget officer for the nonpartisan Office of Legislative Services, are estimating revenue shortfalls in the budget that will ultimately mean Christie has less available cash to give to transportation. Christie’s revenue shortfall is $676 million through the end of the next fiscal year, while Rosen’s is $1.3 billion. That’s a difference of about $600 million between shortfall predictions.

Christie’s original transportation capital plan for FY 2012-2013 called for borrowing $986 million and using $260 million cash in 2013. Now, New Jersey will borrow the $260 million instead, increasing the total amount borrowed to $1.2 billion.

The $260 million in cash in addition to other cost-saving measures would help plug the revenue shortfall and allow the administration to kick off an across-the-board 10 percent income tax cut.

But Martin E. Robins, director emeritus of the Alan M. Voorhees Transportation Center at Rutgers University, told The Star-Ledger on Wednesday, "We’re really falling right back into the capital financing that the governor critized Jon Corzine for."

Despite the move to increase transportation borrowing, State Treasurer Andrew Sidamon-Eristoff emphasized that the governor’s original goal to lessen reliance on bonding for transportation remains.

"This is a one-year initiative, and we do not make this recommendation casually," Sidamon-Eristoff said at an Assembly Budget Committee hearing Wednesday.

Our ruling

Christie has stated previously that he wants the state to rely less on borrowing for transportation projects and in January 2011 announced a transportation capital plan that calls for more pay-as-you-go financing. But now he’s saying the state will borrow an additional $260 million for transportation work next year in part because of projected revenue shortfalls in the state budget. The governor’s about-face is inconsistent with his previous statements, which rates the change a Half Flip on the Flip-O-Meter.

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