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The Commissioner's Report

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Governor McGreevey takes
leadership role on funding


Governor McGreevey has taken a national leadership role in the fight to renew the federal transportation program and bring home more funding for New Jersey highway and public transit projects.

At the National Governors Association annual meeting in Indianapolis, the Governor unveiled a bold proposal that would:
  • Reauthorize the federal funding program for six years;
  • Increase federal funding for highways and public transit by 38 percent over current levels;
  • Ensure that all Highway Trust Fund user fees are distributed reliably to the states;
  • Maintain current funding guarantees and budget firewalls;
  • Maintain the current funding split between highways and public transportation.
The Governor offered his plan to break an impasse in Washington over reauthorization of the program, called TEA 21, which expires September 30. The Bush Administration has proposed a $248 billion program, while a group of House Republican leaders has offered a $375 billion program that would rely on a substantial increase in the federal gas tax.

“Governor James E. McGreevey has put himself in the middle of the fight over a new federal transportation spending bill,” The Star-Ledger editorialized. “It may not be a bad place to be.” The newspaper noted the importance of generating more transportation funding for New Jersey.

On other editorial pages, the Home News Tribune welcomed the Governor’s “new thinking” on transportation while the Asbury Park Press declared the Governor’s plan “warrants a serious look.”

Governor McGreevey’s plan would create a non-profit Transportation Finance Corporation (TFC), which would be empowered to issue $80 billion in tax credit bonds. The states would receive $60 billion of the revenue in transportation aid while the remaining $20 billion would be held in a “sinking fund” to retire the principal. The $60 billion would protect public transit’s share at $12 billion.

transportation finance corporation graphic

The plan would avoid a tax increase, which the Bush Administration has made clear it will not support, and would not increase the national budget deficit. In addition, the TFC would serve only as a financing mechanism; Congress would continue to exercise control over funding formulas and allocations to the states.

For New Jersey, the Governor’s plan would mean an additional $2 billion over current funding levels and the means to support 84,000 jobs.
 
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  Last Updated:  January 19, 2005