We have entered the zone of pure politics, as though we’ve been operating outside of it since Gov. Christie first entered the race for New Jersey governor in 2009.
I don’t mean that as a crack against the governor, but against the entire political environment that has overtake the state since he took office and the state began operating under a divided government.
Political games are the norm these days, but the debate over the governor’s canceling of the ARC tunnel, what should be done with the ARC money allocated by the federal government and whether toll hikes approved to cover the tunnel project should be repealed has descended into pure nonsense.
What we know is this: The Democrats want to repeal the toll hikes; the governor wants them to stay in place and he wants to use the money to help replenish the Transportation Trust Fund. The Office of Legislative Services says the hikes can be repealed; the N.J. Turnpike Authority’s bond counsel says doing so will damage the authority’s ability to raise money.
The memo warns that among the potential ramifications are litigation brought against the Turnpike Authority or state by bond owners.
The Turnpike Authority may not be able to issue enough bonds to entirely fund its $7 billion Capital Improvement Project, and the ratings on the Turnpike Authority bonds would likely be lowered. The U.S. Securities and Exchanges Commission could investigate or bring litigation against the Turnpike Authority based upon financial projections that included the revenue from the hikes, the memo says.
“Any such downgrading of the Bonds will increase the costs of the Authority’s future borrowings and impair the Authority’s ability to borrow needed capital funds,” it reads.
Bleak, to say the least. The question is not so much who is correct — the bond counsel’s opinion is just that, an opinion. The question is not about fact, but about policy, though the argument is being portrayed by the political ones as an argument over facts.
Let’s consider several other facts: The state Transportation Trust Fund has gone bust and someone will need to pay to refill it. We could do so by boosting the state gas tax, by using toll money or by raising general purposes taxes.
The gas tax is a use-based approach. If you drive in New Jersey, you pay the freight. The toll approach is also use-based, but targets a subset of drivers, most of whom are from out of state. The general tax approach hits everyone — including those who don’t drive. Which of these is best? Again, this is a policy debate. I would argue for the gas tax because it holds the potential of altering our driving behavior, but that is not on the table — the governor has promised to veto it. Same goes for the general tax — a problematic approach anyway.
The toll hike has been passed, is supposed to generate $1.25 billion in revenue. The governor wants to put it in the trust fund, which is used to repair and maintain roads and bridges and expand public transportation.
I’ll let you be the judge.
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