This is a lot to take in. The governor is proposing borrowing enough money to cover paying down a large portion of the state’s debt, but also to replenish the state’s Transportation Trust fund and maintain the state’s toll roads for years to come.
Gov. Jon Corzine is billing his toll road proposal as a way to bail out a state awash in debt, a state with a political class that has relied on a host of gimmicks and accounting tricks to spend like drunken sailors while pushing off the consequences for another time.
That time is now. Debt payments are consuming a greater portion of the state’s budget every year. In addition, the state’s pension and healthcare funds are woefully underfunded. Together, these obligations are crowding out other priorities — including real property tax and educational funding reform.
Yes, the Legislature did provide some nominal tax relief this past fall. And yes, it approved on Monday a new school funding formula that calls for a $500 million boost in overall state spending on schools.
The reality, however, is that both of these accomplishments were nothing more than nibbling — a much larger infusion of state cash into local school is needed both to ensure equality of educational opportunity and to reduce the amount spent locally in property taxes. And this does not take into account the cash needed to build the affordable housing units needed both to provide housing and to desegregate this horribly segregated state.
Will the toll-road plan address these issues? Perhaps. The governor certainly seems to think so.
In a speech that may be the most important of his political career, Corzine described his plan as “comprehensive and sober,” adding that is bound to be “controversial.” He ticked off its four elements, some of which Republicans have been demanding for years.
“One: Freeze spending now,” Corzine said. “Two: Limit future spending to revenue growth. Three: Capture the enterprise value of our tollways to pay down debt and make capital investments. Four: Limit borrowing by requiring voter authorization.”
“If there is a better plan, I am open to its consideration,” he said. “Put it on the table.”
According to The New York Times, the governor wants to boost highway tolls over the next 15 years (by 50 percent in 2010, 2014, 2018 and 2022), while borrowing between $30 billion and $38 billion “to help the state pay off half of its debt and pay for transportation improvements.” The plan also calls for the state to “establish two new agencies, one to operate and maintain the roads, and the other to provide some oversight.”
It is an ambitious plan, that’s not in question; there is no way to address years of political timidity without being bold and ambitious.
What is questionable is whether this plan is the right plan to address the state’s woes. That’s a question I can’t answer at the moment.
My initial sense, however, is that this is just another in a long line of gimmicks foisted on taxpayers — though there is a twist: Taxpayers will not be the ones on the hook for the plan; drivers, the majority of whom the governor says come from out of state, will be. That, in the end, is his chief selling point.
At least the governor is being honest. Unlike his predecessors, who revalued the state’s pension plan so that they could avoid making payments into the fund (I’m talking to you, Christie Whitman and Jim McGreevey), Gov. Corzine is being honest about this plan and the pain, about its risky nature and about the pain it will cause for drivers.
I’m skeptical, but will keep an open mind. It’s now up to the governor, in his upcoming statewide dog-and-pony show, to convince voters and state legislators that his plan offers far more good than ill.
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Hank Kalet 