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New Jersey Transportation Trust Fund Authority  
      
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Capital Program



The Transportation Trust Fund provides funding for New Jersey's transportation system

Frequently Asked Questions


Q. What is the current financing capacity of the Transportation Trust Fund Authority?

A. The Transportation Trust Fund Authority was provided with new financing capacity as a result of the reauthorization legislation enacted in June 2012. The state constitution authorizes minimum annual appropriations for the Motor Fuels Tax (amount equivalent to the revenue derived from the 10.5 cent tax per gallon, but not less than $483m per fiscal year), the Petroleum Products Gross Receipts Tax ($200m minimum, per fiscal year), and the Sales and Use Tax ($200m minimum, per fiscal year). The Legislature may appropriate more than the minimums noted above, however. Also subject to appropriation are several statutory dedications of revenue from toll road contributions, motor vehicle registrations, and the diesel tax.

In fiscal year 2014, the Legislature appropriated a total of $1,160.5m, which represents an increase of $66.0m from the amount appropriated in fiscal year 2013 ($1094.5m). The fiscal year 2014 appropriation is detailed below:

$531.0m
Motor Fuels Tax
$228.0m
Petroleum Gross Receipts Tax
$389.5m
Sales and Use Tax
$12.0m
Toll Road Authority Contributions
$1,160.5m
Total

The reauthorization legislation authorized bonding of $1,247m in fiscal year 2013, which exactly matches the total program spending authorization for the year. The Authority also carried forward unused bond cap authority of $326m from prior fiscal years. That amount may be issued at the Authority's discretion to address cash needs during the reauthorization period. Maximum bond maturities continue to be 31 years.

The Authority expects to have sufficient revenue and bonding capacity to support $3.7b of program spending from fiscal year 2014 through fiscal year 2016. The Port Authority of NY/NJ will provide an additional $1.1b in resources to help support a Transportation Capital Program totaling $4.8b during that span.

 

Q. What is the difference between the Transportation Trust Fund and the Transportation Trust Fund Authority (TTFA)?
A. The Transportation Trust Fund is also referred to as the Special Transportation Fund or the Transportation Capital Program. It is the project list that is submitted to the Legislature each year by the Commissioner of Transportation on March 1 and is approved in the Appropriation Act by June 30 of each year. The project list is the spending or contract authority that allows the New Jersey Department of Transportation (NJDOT) and New Jersey Transit Corporation to advance capital projects up to a specified limit. The Transportation Trust Fund Authority (TTFA) is an independent agency that actually finances the cash disbursements to contractors as they occur for Transportation Trust Fund projects. The TTFA uses appropriated revenues and bond proceeds to finance the disbursements. The TTFA is a financing agency only with no involvement in the selection of capital projects.

Q. What are the sources of revenue for the Authority?
A. The TTF Authority is supported by the revenue equivalent of 10.5 cents on the motor fuels tax, the petroleum products gross receipts tax, a portion of the general sales tax, "good driver" registration surcharge fees, heavy truck fees, and contributions from the New Jersey Turnpike Authority and South Jersey Transportation Authority.

Q. Which revenues are dedicated for transportation capital purposes in the State Constitution and which are not?
A. The motor fuels tax, petroleum products gross receipts tax and general sales tax revenues are dedicated to transportation capital by the State Constitution. The good driver registration surcharge fee, heavy truck fees and toll road authority contributions are dedicated by statute only.

Q. What is the difference between constitutional dedication and statutory dedication?
A. The Constitutional dedication is binding on the Legislature. However, the statutory dedication is not. The Legislature can use the annual Appropriation Act to override funding references in general statutes.

Q. Do the constitutionally dedicated revenues flow directly for transportation capital purposes or do they still need to be appropriated?
A. All revenues in New Jersey must be appropriated annually by the Legislature, even those dedicated by the State Constitution.

Q. Is it possible for the constitutionally dedicated revenues to be appropriated for a purpose other than the Transportation Trust Fund Authority?
A. Yes, the State Constitution only directs dedicated revenues for the purpose of "paying or financing the cost of planning, acquisition, engineering, construction, reconstruction, repair, resurfacing, and rehabilitation of the transportation system in the State." There is no reference to the dedicated revenues flowing directly to the Authority. Of the estimated $531 million currently collected from 10.5 cents on motor fuel consumption a minimum of $483 million is specifically directed to the Transportation Trust Fund Authority via statute. In fiscal year 2014, $531 million was appropriated to the TTF.

Q. What is the current motor fuel tax rate? Does the Authority receive all motor fuel revenues? If not, where do they go?
A. The current tax rate on gasoline is 10.5 cents per gallon and 13.5 cents on diesel. The State Constitution dedicates the revenue equivalent of 10.5 cents on both the gasoline tax and diesel tax for transportation purposes. Revenues from the remaining 3 cents of the diesel tax are dedicated by statute only under the heavy truck fee category that was implemented in 1984. As noted above, $531 million was appropriated to the TTF in FY 14.

Q. What percentage of the annual Transportation Trust Fund Capital Program is currently being spent on Authority debt service?
A. None. The Transportation Trust Fund Capital Program is a spending authorization for NJDOT/NJ TRANSIT capital projects. There is no line item for Authority debt service in the NJDOT/NJ TRANSIT capital program. Debt service is a function of the Transportation Trust Fund Authority which is separate and distinct from the NJDOT/NJ TRANSIT capital program. Debt service payments are funded through the State's annual capital appropriation to the Authority, not through the TTF Captial Program's spending authorization.

Q. The TTFA reauthorization statute enacted in June, 2012 authorized two types of bonds, namely Transportation System Bonds and Transportation Program Bonds. What is the difference between the two?
A. "Transportation System Bonds refers to bonds issued pursuant to authorizations previously provided in P.L. 1995, c. 108 and P.L. 2006, c.3, as well as any bonds issued to refund those “prior” bonds.  Transportation Program Bonds refers to bonds issued pursuant to the most recent authorization enacted in June, 2012 (P.L. 2012, c. 13) and any bonds subsequently issued to refund those particular bonds.

In fiscal 2013, the NJTTFA issued $1,247,000,000 of new money bonds consisting of $326,255,000 of Transportation System Bonds, 2012 Series A and $920,745,000 of Transportation Program Bonds, 2012 Series AA Bonds.  The 2012 Series A Bonds will use substantially all of the remaining new money bond authorization available for Transportation System Bonds (i.e., the “prior“ bonds) under the NJTTFA Act. The 2012 Series AA Bonds represent the first issuance of Transportation Program Bonds authorized under the Act. The proceeds of each issuance will be used to support transportation projects within the State of New Jersey. In fiscal 2014 the NJTTFA issued $849,200,000 of new money Transportation Program Bonds, 2013 Series AA.

The Transportation Program Bonds will be issued as “state contract” debt backed by a new contract between the State Treasurer and the Authority.  This contract pledges that constitutionally-dedicated revenues appropriated by the Legislature will be made available to the Authority for debt service payments on its Transportation Program Bonds. The Transportation System Bonds continue to be secured by the existing contract between the State Treasurer and the Authority which pledges that any dedicated NJTTFA revenues appropriated by the Legislature to the payment of such bonds will be made available to the Authority for debt service payments."

 

Q. How does the Authority go about selecting capital projects to finance?
A. The Authority has no role in selecting capital projects. NJDOT and NJ TRANSIT select the projects and submit them to the Metropolitan Planning Organizations and the Legislature for approval.

Q. What is the current pay-as-you-go percentage and how is that term defined?
A. The "pay-as-you-go" component is equal to the appropriation revenue received by the Authority in a given year adjusted for any lapses, investment income, and Build America Bonds tax credits less the debt service payment for that same year. The difference represents the current year revenue that is available to pay capital project costs. Pay-as-you-go may also be derived from the State's contract with toll road authorities, subject to appropriations by the Legislature. Bond proceeds are added to "pay-as-you-go" revenue to cover total capital project costs for the year.

Q. Where is the Authority in reference to its current bond cap?
A. As noted earlier, the TTFA will rely on $326 million in bond cap carryforward from prior fiscal years to pay bills in fiscal year 2014. The 2012 Series A used up all of the cap authority for the "old" TTFA Transportation System bonds. Since the law authorized the sale of $1.247b of new bonds in 2013, and since the TTFA only used $920m of that on the 2012 Series AA Transportation Program bond in 2013, the remaining $326m remains available. It is expected that the remaining $326m bond cap carryforward will be utilized during FY 2015.

Q. What is the maximum maturity of TTFA bonds?
A. 31 years.

Q. When does the current capital program authorization expire?
A. There is no specific expiration date to the current capital program authorization, which authorizes spending through fiscal year 2016. The current statute limits the Commissioner of Transportation to requesting no more than $1.6 billion annually.

Q. When does the Authority expire?
A. Never. All reference to Authority expiration dates were removed from the TTFA statute in the 1995 Legislative Reauthorization.

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