GOVERNOR CORZINE ADDRESSES INFRASTRUCTURE ADVOCACY GROUP ON FY09 BUDGET AND THE STATE’S FISCAL FUTURE

TRENTON - Governor Jon S. Corzine today briefed the Alliance for Action, an infrastructure advocacy group, on his FY09 budget, which reduces spending by $2.7 billion. He also explained the correlation between the budget, the continuing need to pay down the state’s crushing $32 billion debt and how it contributes to the state’s current inability to make investments in transportation infrastructure.

“Our chronic, short-sighted, year-to-year budget approach has not only left us with mountains of debt but has also afflicted the physical condition of our infrastructure,” Governor Corzine said. “Continually pushing infrastructure improvements off until next year has left our transportation network outdated and in decay, and hand-to-mouth budgeting has left us with little to no money to fund improvements.”

The Governor has proposed a plan, composed of four elements, to put the state’s fiscal house in order. First, get state spending under control. Second, ensure future spending matches future recurring revenue. Third, end out-of-control borrowing and fourth, reduce the state’s crushing debt load and fund investments in infrastructure. This budget accomplishes the first task in that plan.

Balancing the FY09 budget proposal required $2.7 billion in spending reductions. Continually rising debt service payments accounted for approximately $3 billion of the budget and will continue to grow unless the state’s $32 billion debt is drastically reduced.

In fact, the state already anticipates a deficit of at least $1.7 billion for the upcoming FY10 budget.

“It is imperative that we continue to work towards a solution to reduce our $32 billion debt and fund important transportation projects that are vital to business and economic growth,” Corzine added.

The state’s Transportation Trust Fund (TTF), which has underwritten transportation projects for a quarter-century, will run dry in 2011, jeopardizing $1.7 billion in federal transportation funds. Additionally, another $2.5 billion in federal funding for the ARC Tunnel into Manhattan will be lost if the state cannot come up with its share of the costs this summer. Given the previously described budget scenario it is clear that the TTF, and in turn transportation infrastructure, cannot be funded just by cutting spending.

Current unfunded transportation priorities include the ARC Tunnel, the expansion of the PATCO rail line in Gloucester County, the Northern Branch rail line in Bergen County, repairing hundreds of structurally deficient bridges in the state and the widenings of the New Jersey Turnpike and the Garden State Parkway. The costs of these projects are not fixed and if delayed they will continue to rise significantly in the coming years due to increased labor, construction and inflationary costs.

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Photos from Governor Corzine's public events are available in the Governor's Newsroom section on the State of New Jersey web page.