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January 6, 2011

RE: Governor Unveils New Transportation Funding Plan

Dear Mayor:

Today in Trenton, Governor Christie announced his transportation capital plan for the next five years. The plan is designed to improve critical infrastructure throughout New Jersey and begin to end the state's long over-reliance on debt to finance transportation projects. 

Over the plan’s five year period, the “Christie Transportation Capital Plan” promises “pay-as-you-go” funding for almost 37 percent of total project spending, up from the current plan’s five-year total of 10.6 percent.  The plan does not call for any new or increased taxes and the $200 million annual funding level for the “Local Aid” component of the Transportation Trust Fund will remain, unchanged.

Over the next five years, the “Christie Plan” would consist of cash contributions from the General Fund and the New Jersey Turnpike Authority, bonding and $1.8 billion in projects requested by the Governor to be undertaken by the Port Authority of New York and New Jersey (PANYNJ) in conjunction with the State Department of Transportation.  As a result, the Plan will be able to provide $1.6 billion each year for five years for much-needed transportation projects throughout New Jersey, including $672 million for New Jersey Transit capital needs and $200 million per year for local government projects.

The current plan, which is about to expire, began in Fiscal Year 2007 and provided $8 billion ($1.6 billion per year) for transportation projects, including $200 million per year for local government projects.  This plan relied on a stable $895 million annual General Fund appropriation that became almost entirely devoted to making debt payments, instead of funding current transportation needs.  Ultimately, the only way to continue paying for projects was for the state to incur debt.  As a result, the former plan allowed the fund to run dry, while nearly all the money spent on current projects was borrowed. 

Under the Governor’s new plan, over each of the next five years, cash contributions used to fund transportation projects will increase, while the use of borrowing will diminish. Click here for the Slides used in the Press Conference.
The “Christie Plan” will include the sixth successive reauthorization of the Transportation Trust Fund.  The Trust Fund’s borrowing is backed by State appropriations from constitutionally dedicated revenue streams (from the Motor Fuels Tax, the Petroleum Products Gross Receipts Tax, and the Sales and Use Tax).  Since the voters approved the constitutional dedications, there is no legal requirement for additional voter approval under the Debt Limitation Clause.  Instead, the Legislature establishes the bonding authority (i.e. authority to borrow up to a specified amount) and makes annual appropriations from constitutionally dedicated revenues. 

We will provide you with further details, as they become available. If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or

Very Truly Yours,


William G. Dressel, Jr.
Executive Director


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