NJ-ARP Blog

By now, you’ve probably heard that it will cost $13.6 Billion dollars to bring New Jersey’s deficient and obsolete bridges up to current standards. OK, that’s fine. After all, no one wants the Pulaski Skyway to collapse. But it seems the state government is deliberately pushing aside the simplest way to pay for the work, and instead is touting Governor Corzine’s super-secret asset monetization plan.

In remarks to reporters after he released the report, Corzine offered no new insight into his long-awaited plan to use the state’s toll roads to raise billions of dollars to pay down state debt and make infrastructure improvements. However, he said, the enormous bridge repairs alone prove the need for his so-called “asset monetization” plan…

[State Transportation Commissioner] Kolluri said the state now spends $509 million a year on bridges maintained by the DOT and by the county and local governments.

To “substantially reduce” the number of structurally deficient and functionally obsolete state-owned bridges, spending would have to be increased to $800 million a year, Kolluri said.

He acknowledged in a letter to Corzine submitted with the bridge report that that figure is “staggering and perhaps unattainable.” So he recommended increasing spending by $150 million a year, to $659 million, and focusing on the structurally deficient bridges rather than the functionally obsolete ones.

Corzine said his administration would consider raising the tax that motorists pay when they buy gasoline to pay for bridges and other transportation needs, but he doesn’t consider it the “optimal response for how we get resources.”

“There are other alternatives,” he said. “What we have to do is find the alternative that takes us farthest down the road to solving all of our problems.”

So an extra $300 million per year is “staggering and perhaps unattainable,” but the super-secret asset monetization plan will provide only $150 million per year. And that means we can only repair bridges that are ready to fall down, and not improve the obsolete bridges.

Does this make sense to you? Is an extra $300 million really unattainable? Let’s take a look at the gas tax:

According to the New Jersey Transportation Trust Fund Authority, each 1 cent/gallon increase in the motor fuel tax brings in an additional $52.7 million per year. That means a 6 cent per gallon tax increase will bring in an extra $316 million per year. More than enough to repair the bridges, according to the transportation commissioner.

At current gasoline prices, that’s only a 2.4% increase in the price of gas. Certainly reasonable considering that the motor fuels tax hasn’t been raised since 1988, and New Jersey’s fuel tax rate is the third-lowest in the nation. A 6 cent/gallon increase would still place NJ’s rate well below the nation’s average.

So why do we have to wait for Corzine’s super-secret asset monetization plan, when a small, long-overdue motor fuel tax increase will get us more bang for the buck? I suspect the answer to that is: Follow the money.

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Posted by Bob Scheurle under Tolls & Taxes.