DEPARTMENT OF TRANSPORTATION AND MOTOR VEHICLE … · 2012-04-30 · Department of Transportation and Motor Vehicle Commission FY 2012-2013 Highlights 2 Motor Vehicle Commission •

DEPARTMENT OF TRANSPORTATION

AND

MOTOR VEHICLE COMMISSION

2012 - 2013FISCAL YEAR

ANALYSIS OF THE NEW JERSEY BUDGET

PREPARED BY OFFICE OF LEGISLATIVE SERVICESNEW JERSEY LEGISLATURE • APRIL 2012

NEW JERSEY STATE LEGISLATURE

SENATE BUDGET AND APPROPRIATIONS COMMITTEE

Paul A. Sarlo (D), 36th District (Parts of Bergen and Passaic), ChairBrian P. Stack (D), 33rd District (Part of Hudson), Vice-ChairJennifer Beck (R), 11th District (Part of Monmouth)Anthony R. Bucco (R), 25th District (Parts of Morris and Somerset)Sandra B. Cunningham (D), 31st District (Part of Hudson)Linda R. Greenstein (D), 14th District (Parts of Mercer and Middlesex)Steven Oroho (R), 24th District (All of Sussex, and parts of Morris and Warren)Kevin J. O'Toole (R), 40th District (Parts of Bergen, Essex, Morris and Passaic)Joseph Pennacchio (R), 26th District (Parts of Essex, Morris and Passaic)Nellie Pou (D), 35th District (Parts of Bergen and Passaic)M. Teresa Ruiz (D), 29th District (Part of Essex)Jeff Van Drew (D), 1st District (All of Cape May, and parts of Atlantic and Cumberland)Loretta Weinberg (D), 37th District (Part of Bergen)

GENERAL ASSEMBLY BUDGET COMMITTEE

Vincent Prieto (D), 32nd District (Parts of Bergen and Hudson), ChairmanGary S. Schaer (D), 36th District (Parts of Bergen and Passaic), Vice ChairmanAnthony M. Bucco (R), 25th District (Parts of Morris and Somerset)John J. Burzichelli (D), 3rd District (All of Salem, and parts of Cumberland and Gloucester)Gary R. Chiusano (R), 24th District (All of Sussex, and parts of Morris and Warren)Albert Coutinho (D), 29th District (Part of Essex)Gordon M. Johnson (D), 37th District (Part of Bergen)Declan J. O'Scanlon, Jr. (R), 13th District (Part of Monmouth)Troy Singleton (D), 7th District (Part of Burlington)Bonnie Watson Coleman (D), 15th District (Parts of Hunterdon and Mercer)Jay Webber (R), 26th District (Parts of Essex, Morris and Passaic)Benjie E. Wimberly (D), 35th District (Parts of Bergen and Passaic)

OFFICE OF LEGISLATIVE SERVICES

David J. Rosen, Legislative Budget and Finance OfficerFrank W. Haines III, Assistant Legislative Budget and Finance Officer

Marvin W. Jiggetts, Director, Central StaffDonald S. Margeson, Section Chief, Authorities, Utilities, Transportation and Communications Section

This report was prepared by the Authorities, Utilities, Transportation and Communications Section of the Office of LegislativeServices under the direction of the Legislative Budget and Finance Officer. The primary author was Patrick Brennan withadditional contributions by Charles A. Buono.

Questions or comments may be directed to the OLS Authorities, Utilities, Transportation and Communications Section (609-847-3840) or the Legislative Budget and Finance Office (609-292-8030).

DEPARTMENT OF TRANSPORTATION AND MOTOR VEHICLE COMMISSION

Budget Pages....... C-7, C-16, C-25; D-337 to D-354; H-8

Fiscal Summary ($000)

Expended FY 2011

Adjusted Appropriation

FY 2012 Recommended

FY 2013

Percent Change

2012-13 State Budgeted $1,293,562 $1,434,982 $1,525,984 6.3%

Federal Funds 757,043 1,227,821 996,299 ( 18.9%)

Other 1,811,865 2,088,573 2,243,587 7.4%

Grand Total $3,862,470 $4,751,376 $4,765,870 0.3%

Personnel Summary - Positions By Funding Source

Actual FY 2011

Revised FY 2012

Funded FY 2013

Percent Change

2012-13 State 1,709 1,567 1,589 1.4%

Federal 870 798 875 9.6%

Other 624 617 630 2.1%

MVC 2,111 2,085 2,181 4.6%

NJ Transit 11,078 11,232 11,319 0.8%

Total Positions 16,392 16,299 16,594 1.8%

FY 2011 (as of December) and revised FY 2012 (as of January) personnel data reflect actual payroll counts. FY 2013 data reflect the number of positions funded.

Link to Website: http://www.njleg.state.nj.us/legislativepub/finance.asp

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Highlights

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Motor Vehicle Commission • The Motor Vehicle Commission (MVC) is recommended to receive gross operating

revenues of $325.1 million in FY 2013, a $25 million increase over the prior year. Most MVC revenues are set by statute at a portion of a variety of driving and security related fees and fines. In FY 2013, the total amount being redirected through budget language from the MVC to other departments or the General Fund is $101.2 million, a decrease of $35 million from FY 2012. Net operating revenues for FY 2013 are about $272 million, up about $31 million from FY 2012. Significant unexpended balances from FY 2012 should be available to augment net operating revenues.

Department of Transportation (DOT) • State appropriations for maintenance and operation of State and local highway facilities

by the DOT are recommended to decrease by $20 million in FY 2013 from an adjusted appropriation of $63.5 million in FY 2012. This reduction is attributed to $20 million in supplemental funding for winter operations in FY 2012. In FY 2013, as in prior years, the budget contains language authorizing supplemental funding for DOT winter operations as needed, which will increase the amount of the appropriation by an unknown amount later in FY 2013. The budget forecasts winter operations cost of about $25 million, implying supplemental FY 2013 funding of $20 million.

Transportation Trust Fund (TTF) • The FY 2013 budget recommends a $1.047 billion appropriation to the Transportation

Trust Fund Account to fund debt service on prior bonds and $77.7 million to fund debt service on transportation program bonds. This is the first year in which the budget has distinguished between existing bonds and new bonds. This appropriation is an increase from the $1.035 billion amount appropriated in FY 2012. Funding beyond the constitutional and statutory minimum of $895 million will be provided from the General Fund through an increase in the appropriation of revenues derived from the Motor Fuels Tax, the Petroleum Products Tax, and the Sales and Use Tax. The recommended appropriation is equal to the expected debt service requirement of $1.124 billion for FY 2013.

• The FY 2013 budget proposes $1.6 billion for new transportation capital spending, the

same amount as in recent years. The $1.6 billion is composed of $353 million in Port Authority funds and $1.247 billion from the Transportation Trust Fund.

• Between debt service and new capital projects, the Budget provides $2.724 billion in

total nonfederal transportation financing. That $2.724 billion is composed of $353 million in Port Authority Funds, $260.6 million in Turnpike Authority funds, and $1.124 billion in State funds, and will entail approximately $986 million in new debt issuances. This amount of new debt exceeds the current bond volume cap of the Transportation Trust Fund Authority.

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Highlights (Cont’d)

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• New budget language is recommended authorizing use of state funds via the Transportation Trust Fund Authority to finance, on either an interim or permanent basis, the capital projects that are to be funded by the NY/NJ Port Authority, if the Authority does not provide funds in accordance with its agreement with the State.

New Jersey Transit • The State operating subsidy to support NJ Transit for FY 2013 will be $333.8 million, an

increase of $24.3 million from the FY 2012 subsidy of $309.4 million. Pursuant to proposed budget language, the NJ Transit subsidy is to be funded in part through a $5 million transfer from the Commercial Vehicle Enforcement Fund and a $29 million transfer from the NJ Turnpike Authority.

• The budget conveys $34.4 million in NJ Turnpike Authority funding to NJ Transit for

operations/preventive maintenance, a decrease of $75.6 million from the Authority’s $110 million support for these costs in FY 2012.

• The overall increase in operating costs for NJ Transit in FY 2013 is $9 million, from

$1.895 billion to 1.904 billion. The increase in costs is proposed to be funded through a $24 million increase in the State subsidy, a $13 million increase in farebox revenue, and a $6 million increase in commercial revenues, offset by a $34 million decline in other reimbursements. NJ Transit’s operating budget reflects a decrease in wages, and modest increases in materials and supplies, tolls, and other operating expenses.

• Transportation Assistance for Senior Citizen and Disabled Residents is recommended to

decrease to $22.6 million in FY 2013 from $25.1 million in FY 2012. This appropriation is determined by casino tax collections, which have fallen significantly in recent years. The funding level for the program had been as high as $36.9 million in FY 2008. Based on current casino tax projections and assuming a consistent funding policy, this appropriation could decline further in FY 2014, and then increase in FY 2015.

Background Papers Department of Transportation Operations…………………………………………….p. 18 FY 2012 to 2016 Proposed Capital Funding Program…….……………..………...p. 23

Department of Transportation and Motor Vehicle Commission FY 2012-2013

Fiscal and Personnel Summary

AGENCY FUNDING BY SOURCE OF FUNDS ($000)

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Adj. Expended Approp. Recom. Percent Change

FY 2011 FY 2012 FY 2013 2011-13 2012-13

General Fund

Direct State Services $92,748 $65,161 $45,161 ( 51.3%) ( 30.7%)

Grants-In-Aid $276,715 $309,400 $333,773 20.6% 7.9%

State Aid 0 0 0 - -

Capital Construction $895,000 $1,035,300 $1,124,418 25.6% 8.6%

Debt Service 0 0 0 - -

Sub-Total $1,264,463 $1,409,861 $1,503,352 18.9% 6.6%

Property Tax Relief Fund

Direct State Services $0 $0 $0 - -

Grants-In-Aid 0 0 0 - -

State Aid 0 0 0 - -

Sub-Total $0 $0 $0 - -

Casino Revenue Fund $29,099 $25,121 $22,632 ( 22.2%) ( 9.9%)

Casino Control Fund $0 $0 $0 - -

State Total $1,293,562 $1,434,982 $1,525,984 18.0% 6.3%

Federal Funds $757,043 $1,227,821 $996,299 31.6% ( 18.9%)

Other Funds $1,811,865 $2,088,573 $2,243,587 23.8% 7.4%

Grand Total $3,862,470 $4,751,376 $4,765,870 23.4% 0.3%

PERSONNEL SUMMARY - POSITIONS BY FUNDING SOURCE

Actual Revised Funded Percent Change FY 2011 FY 2012 FY 2013 2011-13 2012-13

State 1,709 1,567 1,589 ( 7.0%) 1.4%

Federal 870 798 875 0.6% 9.6%

Other 2,735 2,702 2,811 2.8% 4.0%

NJ Transit 11,078 11,232 11,319 2.2% 0.8%

Total Positions 16,392 16,299 16,594 1.2% 1.8% FY 2011 (as of December) and revised FY 2012 (as of January) personnel data reflect actual payroll counts. FY 2013 data reflect the number of positions funded.

AFFIRMATIVE ACTION DATA

Total Minority Percent 28.1% 28.5% 29.0% 3.2% 1.8%

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Significant Changes/New Programs ($000)

Budget Item Adj. Approp.

FY 2012 Recomm. FY 2013

Dollar Change

Percent Change

Budget Page

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I. Vehicular Safety – Motor Vehicle Commission Motor Vehicle Services – Other funds $299,864 $325,132 $25,268 8.4% D-342

The increase in this line item reflects changes to the division of MVC revenues between the General Fund and the MVC operating account. Specifically, $15 million of the $20 million Commercial Vehicle Enforcement Fund is allocated to the MVC, compared to none in FY 2012, and $14.4 million more of other MVC revenues are allocated to the MVC instead of to the General Fund as State revenue. About $28 million of this line item in each fiscal year is dedicated by law for emergency helicopter services (Medevac) and other law enforcement purposes, and is transferred to the Department of Health and the Division of the State Police. Other language provisions require transfer of the resources in this line item to other agencies to support their operations; in some but not all cases these operations are related to services these agencies provide to the MVC, e.g., revenue processing. Those required transfers total $30.44 million in FY 2012 and $24.8 million in FY 2013. The MVC’s operating resources are also augmented with unexpended balances from prior years, so the actual FY 2013 MVC operating budget and how it differs from FY 2012 cannot be conclusively determined from the above information. The MVC will not finalize its detailed budget for FY 2013 until after the appropriations act is approved. II. State and Local Highway Facilities Maintenance and Operations - DSS $57,649 $37,649 ($20,000) ( 34.7%) D-345

The decrease in this line item reflects $20 million in FY 2012 supplemental funding for winter operations. As is previous years, the recommended budget for Maintenance and Operations appears to be substantially reduced from the adjusted current year appropriation, reflecting budget language authorization for supplemental funding for winter operations as needed. Such language is continued in the FY 2013 Budget Recommendation. Evaluation data on p. D-344 of the Budget forecasts winter operations cost of about $25 million, the same as the FY 2012 estimate, so supplemental FY 2013 funding of $20 million can be expected. III. Special Transportation Trust Fund Trust Fund Authority – Prior Bonds - Capital Construction $1,035,300 $1,046,718 $11,418 1.1% D-346

This line item reflects the amount of estimated debt service on “prior” trust fund bonds, presumably bonds issued prior to June 30, 2012. The basis of the recommended amount is not clear, given that $78.6 million of the FY 2012 appropriation is projected by the Executive to

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Significant Changes/New Programs ($000) (Cont’d)


FY 2012Recomm.FY 2013

DollarChange

PercentChange

BudgetPage

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remain unspent and lapse at the close of the year. The Authority could issue up to $326 million in “new money” bonds under its current debt ceiling, which would affect the amount needed in FY 2013 for “prior” bonds. Trust Fund Authority – Transportation Program Bonds - Capital Construction $0 $77,700 $77,700 — D-346

This represents a new line item in the budget separating debt service for bonds issued on or after July 1, 2012 from those issued before that date. This line item represents the amount the department anticipates it will need to service the debt on bonds issued during FY 2013. Transportation Systems Improvements – Other funds $66,380 $260,980 $194,600 293.2% D-346

This appropriation of $261 million for Transportation Systems Improvements represents the FY 2013 installment of the total $1.25 billion the New Jersey Turnpike Authority agreed to provide the State in support of the State transportation system from FY 2012 through FY 2016. This funding is expected to be appropriated to the Transportation Trust Fund Authority for funding of the transportation capital program. Transportation Trust Fund – Federal Highway Administration – Special Transportation Trust Fund $1,205,196 $973,674 ($231,522) ( 19.2%) D-346

This decrease represents a reduction in funds that the State expects to receive in the form of federal transportation appropriations for maintenance and capital costs related to the State’s highways, bridges, and transportation system.




DollarChange

PercentChange

BudgetPage

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IV. Public Transportation – NJ Transit D-350-351 NJ Transit – Distribution by Fund and Object A. Expenditures

1. Bus Operations $649,800 $656,800 $ 7,000 1.1%

2. Rail Operations $764,000 $772,800 $ 8,800 1.2%

3. Light Rail Operations $86,000 $88,400 $ 2,400 2.8%

4. Corporate Operations $258,900 $246,300 ($12,600) ( 4.9%)

5. Purchased Transportation $136,200 $139,573 $ 3,373 2.5%

Total $1,894,900 $1,903,873 $ 8,973 .5% B. Revenues

1. State Subsidy $309,400 $333,773 $24,373 7.9%

2. NJT Resources:

Farebox $881,000 $894,200 $13,200 1.5%

Other Commercial $104,300 $109,800 $ 5,500 5.3%

Other Reimbursements $600,200 $566,100 ($34,100) ( 5.7%)

Total $3,789,800 $3,807,746 $8,973 .5% NJ Transit’s operating budget proposes to increase by 0.5% or $9 million in FY 2013; however, the budget provides NJ Transit a 7.0% increase in its operating subsidy or $24.3 million. This increase in operating subsidy is due mostly to a $34.1 million reduction in Other Reimbursements anticipated for FY 2013. This reduction is in turn the outcome of a $75.6 million decrease in contributions from the NJ Turnpike Authority. Other reimbursements for NJ Transit typically involve federal and TTF dollars provided to NJ Transit as reimbursements for capital activities undertaken by the organization. Transportation Assistance for Senior Citizens and Disabled Residents (Casino Revenue Fund) $25,121 $22,632 ($2,489) ( 9.9%)

Casino Revenue Fund dollars provide support through NJ Transit for county transportation systems which provide transportation to elderly and disabled residents. The appropriation is a percentage fixed by statute of total casino taxes paid into the Casino Revenue Fund. The most recent year’s appropriation, FY 2013, is a percentage of the last concluded year’s (FY 2011) revenue. This year’s 9.9% decrease is part of a downward trend in funding since FY 2008 as a result of a drop in casino taxes. The amount provided in FY 2008 was $36.9 million.




DollarChange

PercentChange

BudgetPage

8

Assuming a consistent funding policy, the appropriation would decrease further in FY 2014 based on current projections of casino tax revenue, before rising in FY 2015. All Other Funds- Railroad and Bus Operations $110,000 $34,400 ($75,600) ( 68.7%) D-351

This line item reflects amounts provided to New Jersey Transit by the New Jersey Turnpike Authority via the State for operations and preventive maintenance. The reduction in this line item is due to a shift of Turnpike resources to system-wide transportation improvements, to meet the pay-as-you-go component of the Governor’s five-year transportation capital plan

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Significant Language Changes

EXPLANATION: FY 2012 language not recommended for FY 2013 denoted by strikethrough. Recommended FY 2013 language that did not appear in FY 2012 denoted by underlining.

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Motor Vehicle Revenue – Funding Shift

Revision 2012 Handbook: p. B-163 2013 Budget: p. D-342

Notwithstanding the provisions of any law or regulation to the contrary, $20,000,000 $5,000,000 of monies received in the "Commercial Vehicle Enforcement Fund" established pursuant to section 17 of P.L.1995, c.157 (C.39:8-75) shall be deposited in the General Fund as State revenue, and existing Commercial Vehicle Enforcement Fund balances are appropriated to offset all reasonable and necessary expenses of the Division of State Police, the New Jersey Motor Vehicle Commission, the Department of Transportation, and the Department of Environmental Protection in the performance of commercial vehicle safety and emission inspections and Other-Clean Air purposes, subject to the approval of the Director of the Division of Budget and Accounting. Notwithstanding the provisions of any law or regulation to the contrary, of the amount appropriated for New Jersey Transit, $20,000,000 $5,000,000 thereof shall be paid from Commercial Vehicle Enforcement Fund receipts pursuant to section 17 of P.L.1995, c.157 (C.39:8-75), as shall be determined by the Director of the Division of Budget and Accounting.

Explanation

The first recommended language provision directs the transfer of $5 million, $15 million less than in FY 2012, in receipts from the Commercial Vehicle Enforcement Fund (CVEF) to the General Fund as State Revenue. This revenue is then directed from the General Fund to NJ Transit pursuant to the second language provision. The Commercial Vehicle Enforcement Fund is a non-lapsing dedicated account in the General Fund which is intended to support the Commercial Vehicle Enforcement Program administered by the Motor Vehicle Commission (MVC). Pursuant to NJSA 39:8-75, 40 percent of the revenues collected by the fund are intended for use by the MVC with the balance to be distributed to support programs and activities of the Department of Law and Public Safety, the Department of Transportation, the commission and the Department of Environmental Protection. However, pursuant to the proposed budget language, it appears that NJ Transit will receive approximately 25% of CVEF revenue in FY 2013.

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Significant Language Changes (Cont’d)


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The amount appropriated to the New Jersey Motor Vehicle Commission is based on proportional revenue collections for that fiscal year pursuant to the statutes listed in subsection a. of section 105 of P.L.2003, c.13 (C.39:2A-36). Of that amount, $8,138,000 $2,500,000 is appropriated for transfer to the Interdepartmental property rental and household and security accounts, $5,150,000 is appropriated for transfer to the Department of Transportation for the maintenance and operations program, $4,800,000 is appropriated for transfer to the Division of Revenue within the Department of the Treasury, $612,000 is appropriated for transfer to the Division of State Police, and $800,000 is appropriated for transfer to the Bureau of Forestry within the Department of Environmental Protection for its Forest Fire Fighting Program. In addition, the Motor Vehicle Commission shall pay the non-State hourly rate charged by the Office of Administrative Law for hearing services, or an amount no less than $500,000, subject to the approval of the Director of the Division of Budget and Accounting.

Explanation

The recommended budget language directs the transfer of $2.5 million, $5.6 million less than in FY 2012, in MVC revenue to the Interdepartmental property rental and household and security accounts. This payment is provided as a reimbursement for commission utility, security, and building maintenance costs.



Notwithstanding the provisions of section 105 of P.L.2003, c.13 (C.39:2A-36) or any law to the contrary, $25,750,000 $31,388,000 is appropriated from the revenues appropriated to the Motor Vehicle Commission for deposit in the General Fund to reflect savings from implementation of fiscal 2011 continuing savings initiatives, subject to the approval of the Director of the Division of Budget and Accounting. Notwithstanding the provisions of section 105 of P.L.2003, c.13 (C.39:2A-36) or any law to the contrary, $50,000,000 $30,000,000 is appropriated from the revenues appropriated to the Motor Vehicle Commission for deposit in the General Fund as State revenue, subject to the approval of the Director of the Division of Budget and Accounting.



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Explanation

The first item of recommended budget language directs the transfer of $31.4 million, $5.6 million more than in FY 2012, in MVC revenue to the General Fund. Savings initiatives in an equivalent amount are assumed; however no specifics regarding these initiatives are available. The second language item directs $30 million, reduced from $50 million in FY 2012, in MVC revenue, to the General Fund as State revenue. These are amounts that would otherwise be available in support of commission operations. The net result of these items is a $14.4 million reduction in the amount of commission revenue directed to the General Fund.

State and Local Highway Facilities – Funding From Authorities


Notwithstanding the provisions of any law or regulation to the contrary, of the amounts hereinabove appropriated for the Department of Transportation from the General Fund, $36,500,000 $12,500,000 thereof shall be paid from funds received from the various transportation-oriented authorities pursuant to contracts between the authorities and the State as are determined to be eligible for such funding pursuant to such contracts, as shall be determined by the Director of the Division of Budget and Accounting.

Explanation

Under contracts with the New Jersey Turnpike Authority and South Jersey Transportation Authority, the State will receive moneys from these authorities in an amount anticipated in the FY 2013 budget (p. C-7 “Autonomous Transportation Authorities”) of $53.5 million, a decrease of $24 million from FY 2012. The above language provides that toll road authority contract revenue is to fund General Fund appropriations to the DOT to the extent of $36.5 million in FY 2012 and $12.5 in FY 2013 (a decrease of $24 million). Of the remaining anticipation, as in prior years, $12 million of contract revenue is available if needed through budget language (p. D-347) to the TTF for the capital construction program while $29 million is appropriated through budget language (p. D-351) to New Jersey Transit as part of the State operating subsidy.



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State and Local Highway Facilities – Appropriation of Fees


Receipts in excess of the amount anticipated from the Logo Sign Program fees, which include the Trailblazer Sign Program, the Variable Message Advertising Program, the Excess Parcel Advertising Program, and the Land Service Road Advertising Tourist Oriented Directional Signs Program, fees are appropriated for the purpose of administering the program programs, subject to the approval of the Director of the Division of Budget and Accounting.

Explanation

The recommended budget language authorizes excess receipts from fees for the Logo Sign Program and Tourist Oriented Directional Sign Program to be appropriated for the administration of those programs. This ensures that revenues generated by the program remain with the program. In FY 2012, excess receipts from the Directional Signs Program were not appropriated.

State and Local Highway Facilities – Revenues From Sponsorships and Advertising

Addition 2012 Handbook: - 2013 Budget: p. D-347

Revenue received from fees or other payments made for the placement of sponsorship acknowledgment and advertising on signs, equipment, materials, and vehicles used for a safety service patrol or emergency service patrol program pursuant to P.L.2011, c.133, are appropriated to the Department for transportation purposes, including contract incentives for heavy duty towing contracts that support the clearance of traffic incidents. Use of the funds is subject to any federal requirements. The unexpended balance at the end of the preceding fiscal year is appropriated for the same purpose.

Explanation

The recommended language appropriates any revenue generated by the private sponsorship of the safety service patrol or emergency service patrol program to the DOT for use on program related expenses. This is new language related the enactment of P.L.2011, c.133, allowing the Commissioner to enter into these private sponsorship agreements or contracts. No estimation was made for revenue that might be generated.



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Transportation Capital Program – Debt Service


The amount hereinabove appropriated for the Transportation Trust Fund account Subaccount for Debt Service for Prior Bonds and for the Transportation Trust Fund Subaccount for Debt Service for Transportation Program Bonds shall first be provided from revenues received from (i) motor fuel taxes, which are hereby appropriated for such purposes pursuant to Article VIII, Section II, paragraph 4 of the State Constitution; (ii) $222,500,000 $228,000,000 from the petroleum products gross receipts tax, which is hereby appropriated for such purposes pursuant to Article VIII, Section II, paragraph 4 of the State Constitution; and (iii) $265,800,000 $344,418,000 from the sales and use tax which is hereby appropriated for such purposes pursuant to Article VIII, Section II, paragraph 4 of the State Constitution; (iv. In addition, the amount hereinabove appropriated for the Transportation Trust Fund Subaccount for Debt Service for Prior Bonds may also be provided from (i) $12,000,000 of funds received from the various transportation-oriented authorities pursuant to contracts between such transportation-oriented authorities and the State; and (vii) such additional sums pursuant to P.L. 1984, c.73 (C.27:1B-1 et seq.);.) as may be necessary and are hereby appropriated to satisfy all fiscal year 2012 2013 debt service, bond reserve requirements, and other fiscal obligations of the New Jersey Transportation Trust Fund Authority. relating to the Prior Bonds.

Explanation

As in past years, the FY 2013 Executive Budget recommends language directing the appropriation to the TTF account to be provided from revenues dedicated under the Constitution and under specified State laws, and, if necessary, from funds receivable under contract from various “transportation-oriented” (i.e., toll road) authorities. Amounts so dedicated under the Constitution include: (1) a minimum $200 million from sales and use tax revenue, (2) a minimum $200 million from petroleum products gross receipts tax revenue, and (3) an amount equal to $0.09 per gallon of revenue from the motor fuels tax, increased to $0.105 per gallon, or a minimum of $483 million, pursuant to P.L.2006, c.3. These amounts together provide a minimum of $883 million. Recent language has also provided $12 million through payments from toll road authorities to the TTF for a grand total of $895 million in funding. In addition to the constitutionally and statutorily required amounts dedicated to the TTF, the recommended budget language provides for an additional $229 million through increases to the amounts appropriated from the above sources of revenue. The language increases the contribution from the petroleum products



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gross receipts tax by $28 million to $228 million and the sales and use tax appropriation by $144.4 million to $344.4 million. The amount contributed from the motor fuels tax is not specified through language but the FY 2013 estimate on page C-4 is $565 million, an increase of $20 million over FY 2012, of which between $540 million and $552 million is expected to be utilized for debt service. The total amount of funding provided to the Transportation Trust Fund Account is $1.047 billion for prior bonds and $77.7 million for program bonds in FY 2012, up from $1.035 billion for all bonds in FY 2012 (p. D-343).

Transportation Capital Program – Debt Service

Additions 2012 Handbook: - 2013 Budget: p. D-347

Notwithstanding anything to the contrary contained in any other laws or regulations, in the event that some of the amounts hereinabove appropriated are not required to pay amounts due under the State Contract between the State Treasurer and the New Jersey Transportation Trust Fund Authority for the Prior Bonds as the result of the receipt of federal subsidies for debt service on the Prior Bonds, or other obligations issued by the New Jersey Transportation Trust Fund Authority in connection with the Prior Bonds the amount hereinabove appropriated from the sales and use tax revenues in clause (iii) of the first paragraph above shall be reduced by such corresponding amount. Notwithstanding anything to the contrary contained in any other laws or regulations, in the event that some of the amounts hereinabove appropriated are not required to pay amounts due under the State Contract between the State Treasurer and the Transportation Trust Fund Authority for the Prior Bonds or the State Contract between the State Treasurer and the New Jersey Transportation Trust Fund Authority for the Transportation Program Bonds as the result of refundings, restructurings, lowered interest rates or any other action which reduces the amounts required to make the payments under such State Contracts, the amount hereinabove appropriated from the sales and use tax revenues in clause (iii) above for the Transportation Program Bonds or the Prior Bonds shall be reduced by such corresponding amounts.

Explanation

The recommended budget language provides for a reduction in the amount of sales tax revenue provided to the Transportation Trust Fund Account for debt service on prior bonds or program bonds in the event that the amounts needed for actual debt service payments are lower than projected in the FY 2013 Executive Budget. Budget language specifies that the receipt of federal subsidies for debt service, refunding debt, restructuring debt, lowered interest rates, or any other action which reduces the amount of debt service payments required will result in a reduction in the amount of the appropriation from sales and use tax revenues. The



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language lowers the amount of the appropriation so that the total appropriation for debt service is equal to the contractually required debt service payment on Transportation Trust Fund debt.

Transportation Capital Program – Authorized Funding Level

Revision 2012 Handbook: p. D-348 2013 Budget: p. B-166

Notwithstanding the provisions of P.L.1984, c.73 (C.27:1B-1 et al), there is appropriated up to $1,257,000,000 $1,247,000,000 from the revenues and other funds of the New Jersey Transportation Trust Fund Authority, for capital purposes as follows: Airport Assets Bridge Assets Capital Program Delivery Congestion Relief Local System Support Mass Transit Assets Multimodal Programs Road Assets Safety Management Transportation Support Facilities

Explanation

The recommended language authorizes Transportation Trust Fund Authority support for the FY 2013 transportation capital program and establishes $1.247 billion as the maximum level of such support. The department has stated that this will permit flexibility in matching TTFA financing to the scope and needs of the capital program. The language indicates the categories of “capital purposes” to be funded from the TTFA. (In the Appropriations Act, the projects within the several categories will be individually specified; as in past years, the list of proposed projects was not finalized in time for its inclusion in the budget recommendations.)

The recommended budget language provides a $1.6 billion level of annual appropriations for the FY 2013 State transportation capital program, composed of $1.247 billion in State support through the Transportation Trust Fund and $353 million in support from the Port Authority of New York and New Jersey for State projects in the port region. The language decreases the amount appropriated from the Transportation Trust Fund for capital purposes by $10 million from FY 2012. This reduction is made possible by a $10 million increase to $353 million in anticipated capital project expenses by the Port Authority (p. D-346 – Project Costs



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– Other Parties). The Port Authority funding is part of a $1.8 billion funding agreement between the State and Port Authority over the FY 2012 to FY 2016 period. The specific projects to be funded by the Port Authority can be found in the final language provision on page D-348 of the FY 2013 Executive Budget.

Transportation Capital Program – Funding From New Jersey Turnpike Authority


Notwithstanding the provisions of any law or regulation to the contrary, in addition to the amount hereinabove appropriated for the Transportation Trust Fund Authority, there are appropriated such sums as are received from the New Jersey Turnpike Authority, not to exceed $66,000,000 $260,600,000, pursuant to a contract between the Authority and the State for transportation systems improvements.

Explanation

The recommended budget language appropriates $260.6 million in funds from the NJ Turnpike Authority to the NJ Transportation Trust Fund Authority (TTFA). This $260.6 million presumably represents the portion of “pay as you go” funding available to the State transportation capital plan for FY 2013. This is a $194.6 million increase from the amount provided in FY 2012, and is part of a $1.25 billion agreement between the State and the NJ Turnpike Authority to provide funding from FY 2012 – 2016.

Transportation Capital Program – State and NY/NJ Port Authority Project Funding

Additions 2012 Handbook: - 2013 Budget: p. D-348

Notwithstanding the provisions of any law or regulation to the contrary, the Commissioner of Department of Transportation, upon approval of the Director of the Division of Budget and Accounting, may transfer Transportation Trust Fund Authority monies to the Pulaski Skyway, Route 7/Wittpenn Bridge, and New Road Projects which are to be funded by the Port Authority of New York and New Jersey pursuant to an agreement between the Port Authority of New York and New Jersey and the Commissioner of the Department of Transportation dated July 29, 2011, until such time as funding from the Port Authority of New York and New Jersey is paid to the State pursuant to such Agreement. Subject to the receipt of those funds, the Transportation Trust Fund Authority shall be reimbursed for all monies transferred



17

to advance these projects. In the event that all of such transfers are not reimbursed by the Port Authority of New York and New Jersey pursuant to the Agreement, an amount equivalent to such unreimbursed monies are hereby appropriated from the Transportation Trust Fund Authority to such projects and such amounts shall constitute line item appropriations approved by the Legislature.

Explanation

The recommended budget language serves two purposes: first, it allows the Transportation Trust Fund Authority to advance funds for the construction of the Pulaski Skyway, Route 7/Wittpenn Bridge, and New Road Projects which the Port Authority of NY and NJ agreed to fund, and second, it provides that if the Port Authority does not fully reimburse the State according to the funding agreement, state appropriations to the Transportation Trust Fund Authority will be used for the projects, and that this language shall serve as legislative approval for any such appropriation. Authorization of the use of State resources if necessary for the specified projects involving Port Authority funds is apparently intended to assure the advance and completion of the projects if the Port Authority is unable to fulfill its financial commitment. This language is also presumably intended to provide flexibility in the construction of these projects so that financing is available to advance the projects, even if project funding needs do not directly align with the funding schedule between the DOT and the Port Authority.

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Background Paper: Department of Transportation Operations

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Introduction

The New Jersey Department of Transportation (“department”) builds, operates, maintains, and provides for the safety of the motoring public on the State’s highway system.1 The department’s work is organized into five major areas: Maintenance and Operations; Capital Program Management, Planning and Development; Multimodal Services; Administration; and Financial Services. This background paper will focus on Maintenance and Operations.

The department’s Maintenance and Operations division is responsible for maintaining the State’s roads and bridges, ensuring the safe and efficient movement of traffic, and disseminating real-time travel information. Specifically, Maintenance and Operations: (1) rehabilitates existing roads, bridges, and appurtenances on the State highway system for greater safety and to decrease maintenance costs; (2) administers snow and ice control programs for public safety and convenience in inclement weather; (3) protects the roadside through landscape maintenance, control of roadside advertising and junkyards, and control of access on State highway and public transportation properties; (4) maintains non-operating State-owned railroad properties; (5) constructs, maintains, and operates traffic signals, highway lighting facilities, and other electrical devices on the State highway system; (6) maintains and operates moveable bridges; (7) maintains the motor vehicle equipment fleet of the department and other State departments and agencies; (8) operates a Statewide network of service facilities, including fuel stations for use by other State agencies; and (9) fabricates specialized equipment on an as-needed basis.

These nine functions of Maintenance and Operations fall under the general oversight of

the Assistant Commissioner of Operations. The following four units have specific oversight responsibility within the Maintenance and Operations Division: (1) Regional Operations; (2) Operations Support; (3) Traffic Engineering and Safety; and (4) Emergency Management. Each of these units has specified functions concerning the department’s operations and is further organized into sub-units. Due to the narrow scope of many of the nine functions of Maintenance and Operations, some of those functions fall under the jurisdiction of multiple units.

The following is a description of each of the duties and functions of the units and the

sub-units within each unit: Regional Operations Unit Regional Operations is divided into three sections by geographic categories: Regional Operations – North; Regional Operations – Central; and Regional Operations – South. The Regional Director for each of these sections is responsible for overseeing the maintenance of State highways, rest areas, roadsides, and bridges; equipment repair; electrical operations; minor access, utility and miscellaneous permits; and facility repairs within that director’s region. Within each region, the director is assisted by the Personnel Coordinator’s Office, which assists all personnel within that region.

1 The State’s public transportation system, though connected throughout with the highway system, is separately owned, operated, and maintained by the New Jersey Transit Corporation, in but not of the department.

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Background Paper: Department of Transportation Operations (Cont’d)

19

Each region also has two sub-units under the director’s purview. Those units are

Maintenance and Equipment Operations and Electrical Operations. Maintenance and Equipment Operations The responsibilities of the Maintenance and Equipment Operations sub-unit are diverse. Regional maintenance crews are responsible for maintenance of State-owned Park and Ride facilities; general roadway maintenance, including, but not limited to, pothole repair, crack sealing work, litter removal, grass mowing, and snow and ice control; and incident response. In addition to a regular maintenance crew, each region has specialty crews responsible for the maintenance of all regulatory traffic signs, landscape maintenance (e.g., tree trimming and removal), bridge maintenance, and catch basin repair.

The Regional Maintenance and Equipment sub-unit is also responsible for the access

permit process and for oversight of all work within the State’s right of way that is not sponsored by the Department or the Federal Highway Administration (FHWA). Engineering staff is responsible for contract administration and inspection for various regional support contracts, and for ensuring that storm water management activities are carried out in accordance with regulations set by the New Jersey Department of Environmental Protection. The sub-unit also provides traffic safety support to State and local police for incidents on the State highway system.

Finally, the Equipment Service Center for each region maintains all vehicles and heavy

equipment assigned to Regional Operations and to other state agencies located within that region.

Electrical Operations The responsibilities of Electrical Operations include the maintenance and repair of

traffic signals, highway lighting, illuminated signs, traffic counting stations, certain lift bridges, and emergency responses related to traffic signal issues and motor vehicle crashes. This sub-unit is also responsible for traffic signal upgrades and pedestrian improvement projects. Operations Support Unit Under the supervision of the Director of Operations Support, who manages Statewide functions at the Department’s headquarters, the Operations Support unit is responsible for: Maintenance Engineering and Support; Equipment Engineering and Operations; and Maintenance Engineering and Operations. Maintenance Engineering and Support The Maintenance Engineering and Support sub-unit is responsible for drawbridge operations, providing services and staffing for 17 drawbridges across the State. Within this sub-unit are the Electrical Maintenance group, and the Maintenance Management group. The Electrical Maintenance group establishes the policies and procedures for the Electrical Maintenance staff, purchases electrical inventory, assigns and tracks electrical work


20

orders, and manages contracts for department electrical work, such as traffic signal re-lamping, overhead lighting, and underground installation. The Maintenance Management group is responsible for administering the Maintenance Management System, which is a comprehensive planning and tracking tool for daily operations, and for developing various management reports. In addition, the group processes claims when electrical facilities are damaged. Equipment Engineering and Operations The Equipment Engineering and Operations sub-unit is responsible for the Statewide coordination of fleet management, vehicle repair and maintenance, acquisition of the department’s equipment fleet, preparation of equipment specifications, bid analysis, and contract administration. The sub-unit is also responsible for the fuel management system and the installation and repair of mobile radios, “walkie-talkies”, cellular phones, and other electronic devices, including the new automated vehicle locating system.

The sub-unit also handles budget and accounts for equipment expenses, ensures that winter equipment units are operational, supports the Department of the Treasury at the monthly vehicle auctions, and provides support to that department and the State Police in the operation of the M4 Fleet Management System.

Maintenance Engineering and Operations The Maintenance Engineering and Operations sub-unit is responsible for providing

engineering expertise for various bridge repair and roadway maintenance contracts and for repairing all Delaware and Raritan Canal and orphan bridges. This sub-unit’s responsibilities also include the processing of claims for damage to State highways caused by automobile crashes and providing minor improvements and maintenance work for other agencies. The sub-unit manages the department’s Sign Shop, which fabricates and installs overhead signs. The sub-unit has an annual capital program of over $180 million and executes approximately 60 contracts per year for capitalized maintenance. Traffic Engineering and Safety Unit Under the Director of Traffic Engineering and Safety, who manages Statewide functions at the department’s headquarters, the Traffic Engineering and Safety unit is responsible for the following sub-units: Investigations; Safety Programs; Transportation Data Development; and Traffic. Traffic Engineering and Safety-Investigations The Investigations sub-unit is responsible for conducting traffic engineering studies to determine the need for the installation or revision of traffic signals, signs, and pavement markings within the existing geometry along State highways.


21

Traffic Engineering and Safety-Safety Programs The Safety Programs sub-unit, part of a collaboration with the Rutgers Center for Advanced Infrastructure and Transportation (CAIT), provides a web-based database known as “Plan 4 Safety” (www.plan4safety.rutgers.edu). The sub-unit also is responsible for collecting motor vehicle crash reports from both the State Police and municipal police jurisdictions in the State. The data from these crash reports is entered into a database and analyzed and evaluated in order to support various motor vehicle and pedestrian safety improvement projects. These projects are then administered, in part, by the sub-unit. Traffic Engineering and Safety-Transportation Data Development The Transportation Data Development sub-unit is responsible for collecting and verifying roadway data used in the planning and design stages of capital program project developments. The unit is also responsible for submitting monthly and annual reports to the FHWA on behalf of the department for the purpose of securing federal fund apportionments.

Types of data compiled by the unit include: traffic counts, vehicle classifications, traffic volumes, roadway attributes, mile post delineations, vehicle miles traveled, cross-section geometry, truck weights, and digital roadway images. The department’s Straight Line Diagrams (SLD) database, which serves as the standard reference source for other roadway information operational databases in the department, is produced and maintained by the sub-unit.

Traffic Engineering and Safety—Traffic The Traffic sub-unit is responsible for the review, evaluation, and provision of

recommendations of traffic and electrical engineering submissions for Capital Program and Major Access Permit projects. The unit also prepares designs for temporary and final traffic signals, pavement markings, and highway lighting and performs plan reviews for work zone traffic control devices. In addition, the unit provides field assistance to contractors, resident engineers, and construction safety staff and creates new and updated CADD drawings for traffic signal and electrical designs. Emergency Management Unit The Office of Emergency Management is responsible for the mitigation, response and recovery from natural and man-made emergencies. The office ensures that all required employees receive the necessary training to prepare them for potential emergencies.


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Maintenance and Operations Operating Budget for Fiscal Year 2011 The following chart details the operating budget for the department’s Maintenance and Operations Division. The chart details the number of employees that are employed by a particular unit and the funding source for that unit.

FUNDING SOURCE ($MILLIONS)

BUREAU

FILLED POSITION

LEVEL PP 05/11

DSS APPROP TTF FEDERAL

MOTOR VEHICLE

COMMISSION 2 OTHER FUNDS3 TOTAL

Non Salary Costs Equipment 215 $5.6 $0.0 $5.9 $0.0 $0.0 $11.5

Maintenance Administration 58 0.2 0.0 0.0 0.0 0.0 0.2

Drawbridge 84 0.1 0.0 0.0 0.0 0.0 0.1 Electrical 123 6.2 0.0 2.9 0.0 0.0 9.1 Gateway Corridor 12 0.1 0.0 0.0 0.0 0.0 0.1

Landscape 13 0.4 0.0 0.0 0.0 0.0 0.4 Roadway

Maintenance4 657 2.8 0.0 0.0 5.2 0.0 8.0 Operations 102 0.0 0.1 0.0 0.0 0.0 0.1

Traffic Engineering & Safety 117 0.2 0.0 0.0 0.0 0.0 0.2

Non Salary Total 1,381 $15.6 $0.1 $8.8 $5.2 $0 $29.7

Salary /Centrally Paid Accounts

(telephone, postage,

equipment maintenance) $22.3 $25.3 $42.9 $0.0 $14.0 $104.5

TOTAL 1,381 $37.9 $25.4 $51.7 $5.2 $14.0 $134.1

2 Budget Language provides this amount to the Department, from the Motor Vehicle Commission for Maintenance and Fixed Charges, subject to the approval of the Director of the Division of Budget and Accounting. 3 $8.7 million is provided from the NJ Turnpike Authority and South Jersey Transportation Authority as reimbursement of the department for the cost of maintaining sections of roadway that “feed” a toll road interchange. The remaining funding is from revenue accounts and reimbursements which are utilized for salary and non-salary needs. 4 There is an open-ended supplemental appropriation for snow removal and winter operations.

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Background Paper: FY 2012 to 2016 Proposed Capital Funding Program

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Budget Pages.... D-346, H-8

Background: The New Jersey transportation capital program provides the funding necessary to plan, finance, construct, and maintain State roadways, NJ Transit rail and bus facilities, and certain air and water facilities. The program provides matching funds to leverage federal transportation resources and provides assistance to counties and municipalities in support of their transportation infrastructure. The capital program utilizes the Department of Transportation (DOT) and NJ Transit to manage and perform construction activity, while the Transportation Trust Fund (TTF) manages the financing activity of the program. The TTF Authority (N.J.S.A. 27:1B-1 et al.) was originally created in 1984 under the Kean administration to administer State and federal transportation funds and maintain a separate, dedicated stream of funding to protect transportation investments. In the period immediately prior to the establishment of the TTF, transportation investment experienced what was largely a “feast-or-famine” approach under which years of bond issuances and high levels of funding were followed by years in which there were relatively low funding levels for transportation capital. Major transportation projects that can take 10 years from the start of planning to completion of construction require consistent and reliable funding for efficient planning and management of those projects, and the TTF created that consistency. Historically, the TTF has funded new capital projects through direct appropriation of constitutionally and statutorily dedicated sources of revenues and TTF Authority bond financing. Over the years, the size of the capital program has grown, and as a result the amount of money appropriated each year has grown as well. However, the increases in appropriations have not kept pace with the increases in capital spending, and the State has faced steadily increasing annual debt service obligations, forcing the capital program to rely on bond financing for current year capital needs, rather than on pay-as-you-go (non-bonded) funding. This unsustainable pattern was identified a number of years ago, and FY 2012 marked the point when the minimum amounts of constitutionally earmarked revenues would be consumed by TTFA debt service, requiring use of additional funds to pay for debt service on new bond issuances. FY 2012-2016 Capital Program Between FY 2007 and 2011, the TTF received $895 million per year in funding. This funding derived from constitutional dedications, pursuant to Article VIII, Section II, paragraph 4 of the State Constitution, of roughly 95% of State motor fuels tax collections, at least

Allocation of TTF Annual Revenues

0%

20%

40%

60%

80%

100%

1985 1985 1985 1997 2001 2005 2009 2013

Perc

enta

ge o

f Ann

ual F

unds

TTF Debt Service TTF Pay-As-You-Go Funding

Department of Transportation and Motor Vehicle Commission FY 2012-2013 Background Paper: FY 2012 to 2016 Proposed Capital Funding Program (Cont’d)

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$200 million of the petroleum products gross receipts tax, and at least $200 million of the sales tax; it also included $12 million in contributions from the State toll road authorities under a statutory earmark. In FY 2011, all $895 million generated from these sources was expended on debt service for previously issued bonds. In FY 2012 the program required additional funding, or it would not be able to pay the debt service on new debt it would need to issue to fund the capital program. The sources of additional funding identified were those very same sources that provided the first $895 million in revenue. The constitution sets a minimum level of capital funding for the State’s transportation system, but does not set a maximum level. Collections in excess of the minimums set by the State Constitution or statute from these sources are General Fund revenues and appropriated for State purposes other than transportation capital funding. In the Governor’s 2012-2016 transportation capital plan, it was proposed that 100% of the motor fuels tax and the petroleum products gross receipts tax be appropriated to the TTF, together with a gradually increasing amount of sales tax revenue. These additional revenues come from the same sources as the original $895 million, but they are amounts that require budgetary action each year in order for the capital program to actually obtain the proposed funding. The distinction between this new funding and the old amount of $895 million is important. Amounts the plan relies on that are above the constitutional floor can also be considered for other budget priorities, so their annual appropriation to fund the plan it is less certain. However unlikely it is that debt service requirements will not be met, attaining the pay-as-you-go targets under the proposed capital plan is less assured. Indeed, the FY 2013 budget indicates that there is no intention to use dedicated revenues above the constitutional floor for anything other than debt service in the first two years of the plan (it appears the targets can be met by other sources as reflected in the plan). Two other major sources of additional revenue identified in the Governor’s 2012-2016 transportation capital plan were made possible by the cancellation of the Access to the Region’s Core trans-Hudson rail tunnel project. One was the provision of $1.8 billion in funding between 2012 and 2016 by the Port Authority of New York and New Jersey for the construction of the Pulaski Skyway, the Wittpenn Bridge, and New Road projects. This agreement was made official on July 29, 2011 and provides annual contributions to the capital program of between $343 and $376 million. This funding has effectively become dedicated pay-as-you-go funding for the FY 2012-2016 period. In September 2011, the NJ Turnpike Authority Board officially approved $1.25 billion in funding to the State for Transportation Systems Improvements from FY 2012-2016. This funding from the Turnpike is not dedicated solely to the TTF; however, the funding is expected to be expended either as debt service on TTF Authority bonds or pay-as-you-go funding on State capital projects. The details for how this additional revenue fits into $1.6 billion annual capital programs are shown in a table provided by the Department of Transportation below:


25

[Amounts above in millions of dollars] Unresolved Issues The proposed 5-year plan appears to address the structural imbalance between sources of TTF revenues and uses of those revenues that had developed by the close of 2011. It does so


26

without requiring any increases to existing fuel taxes or other taxes. That being said, this plan leaves a variety of unresolved issues. 1. TTF Renewal: When the TTF was originally created it had to be legislatively reauthorized or it would expire. During the 1995 TTF renewal, all expiration dates regarding the TTF were eliminated, making it a permanent financing mechanism for State transportation investment.

That did not end legislative restrictions on the TTF, however, because annual and aggregate debt levels for the TTF remained. During the 2006 renewal, the annual program authorization and bonding limit was increased to $1.6 billion from FY 2007-2011, and the aggregate debt limit was, in effect, increased to $15.6 billion. The TTF utilized unused bonding authority over that period to finance its FY 2012 plan; however, according

to the TTF website there is only $326 million in bond authority still available under the aggregate cap, meaning that legislative authorization will be required before FY 2013-2016 of this plan can be completed. No activity has taken place yet with regard to a legislative renewal. 2. Lack of dedicated revenues: In prior renewals and reauthorizations, any new revenue for the TTF was typically provided through statute or through constitutional dedication, so that funds planned for the TTF were substantially protected against redirection or reduction. This plan offers no such assurance. This plan relies on the assumption that over the next 5 years, the State will appropriate $1.8 billion from the General Fund and utilize it to replenish TTF pay-as-you-go funding. Transportation funding history suggests that the actual amount appropriated from General Fund sources from FY 2012-2016 will more closely resemble the minimum amount necessary to make debt service payments, leaving the pay-as-you-go component at a relatively depressed level.

Bonding utilization FY 1996 - 2012 ($ milllions)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1996 1999 2002 2005 2008 2011Aggregate New Bond Issuance Unused Annual Debt Limit


27

Annual Transportation Capital Program Spending

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1985 1985 1985 1985 1997 2000 2003 2006 2009 2012 2015Year

Am

ount

($ M

illio

ns)

3. Plan establishes 10 years at the $1.6 billion cap level: If the State were to maintain its $1.6 billion program for a full 5 years beyond the FY 2007-2011 period, the maintenance of capital appropriations at a constant level for 10 years would be unprecedented in TTF history. Since, 1984 the TTF has never gone more than five years without increasing the size of the program. During the 1988 reauthorization when a 7-year plan was established at a $365 million annual average, a cap lift was required to raise spending to $565 million from 1991-1995. During the 1995 renewal, the annual appropriation was set at $700 million, yet by 1998 another cap lift was required. This plan proposes to maintain the $1.6 billion annual appropriation for a full 10 years against a backdrop in which the primary input costs to transportation projects (crude oil and labor) have steadily risen. 4. Funding not assured after 2016: The amounts provided to the capital program by the New Jersey Turnpike Authority and the Port Authority of New York and New Jersey are not permanent commitments. The agreement with each of those agencies expires in FY 2016 and at this point there will be no money coming from those sources in FY 2017. This means that in FY 2017 the State will need to identify $692 million in additional revenues. Projecting the numbers from this plan into FY 2017, would mean that the pay-as-you-go funding in the 2017 budget would fall to less than $240 million from $605 million in FY 2016. The amount of debt issued would rise from $626.8 million in FY 2016 to $1.36 billion in FY 2017. With that level of pay-as-you-go and new debt, the annual General Fund contributions to the TTF would be fully consumed by debt service in 2019, and annual increases of greater than $100 million per year would be needed just to keep up with new debt service payments each year.

OFFICE OF LEGISLATIVE SERVICES

The Office of Legislative Services provides nonpartisan assistanceto the State Legislature in the areas of legal, fiscal, research, bill

drafting, committee staffing and administrative services. It operatesunder the jurisdiction of the Legislative Services Commission, a biparti-san body consisting of eight members of each House. The ExecutiveDirector supervises and directs the Office of Legislative Services.

The Legislative Budget and Finance Officer is the chief fiscal officer forthe Legislature. The Legislative Budget and Finance Officer collects andpresents fiscal information for the Legislature; serves as Secretary to theJoint Budget Oversight Committee; attends upon the AppropriationsCommittees during review of the Governor's Budget recommendations;reports on such matters as the committees or Legislature may direct;administers the fiscal note process and has statutory responsibilities forthe review of appropriations transfers and other State fiscal transactions.

The Office of Legislative Services Central Staff provides a variety oflegal, fiscal, research and administrative services to individual legisla-tors, legislative officers, legislative committees and commissions, andpartisan staff. The central staff is organized under the Central StaffManagement Unit into ten subject area sections. Each section, under asection chief, includes legal, fiscal, and research staff for the standingreference committees of the Legislature and, upon request, to specialcommissions created by the Legislature. The central staff assists theLegislative Budget and Finance Officer in providing services to theAppropriations Committees during the budget review process.

Individuals wishing information and committee schedules on the FY2013 budget are encouraged to contact:

Legislative Budget and Finance OfficeState House Annex

Room 140 PO Box 068Trenton, NJ 08625

(609) 292-8030 • Fax (609) 777-2442

Documents

DEPARTMENT OF TRANSPORTATION AND MOTOR VEHICLE … · 2012-04-30 · Department of Transportation and Motor Vehicle Commission FY 2012-2013 Highlights 2 Motor Vehicle Commission •