Corzine's Transportation Fund 'Plan'

This isn't a plan. It's a recipe for disaster. Just not his disaster.

His 'plan' consists of refinancing the transportation trust fund, adding new layers of debt, and possible increases in NJ Transit fares and a possible gasoline tax increase somewhere down the road.

The 22-year-old highway program was facing a day of reckoning on July 1. Officials say that is when the gas tax revenue would be used to pay off existing debt, leaving the state with no money for road repairs or new projects. The state would also lose billions of dollars in federal highway funds without a stable transportation trust fund.

Corzine and his team of former Wall Street financiers believe they can generate the $8 billion mostly by borrowing money.

His plan also calls for generating nearly $1 billion by freeing up money from a variety of existing sources. That money would come partly from stretching out repayment of some of the fund's existing debt from 21 years to 30 years. It also would come from using 1.5 cents of the 14.5 cents per gallon gasoline tax for new projects and taking a small chunk from highway tolls that normally would go to the state budget for general purposes.

This pool of money would be used to fund some projects directly, and would allow the state to borrow $6.4 billion in new loans. Corzine and his advisers declined to say how much it would cost eventually to repay the new $6.4 billion over the coming decades.

Under the plan, the state could get working on $1.6 billion worth of projects annually over the next five years. Those could include a new rail tunnel under the Hudson River and improvements to Routes 1 and 9 in Bergen County.

But Corzine's solution means the transportation fund would be relying on a patchwork of financing and borrowing, with no new direct source of revenue -- something public-interest groups, unions and other advocates said was vital.

"We are disappointed that significant new revenues were not being considered at this point," said Tom Dallessio of the Regional Plan Association.

Anyone see a problem with this?

This isn't fixing the problem. It's going to make it worse. The more debt New Jersey takes on, the more that has to be repaid down the road, and the state simply doesn't have the ability to take on more debt, even for vital transportation projects. The key is to make sure that the Fund is properly funded, and that the gasoline tax is directed to solely fund transportation projects, not to help balance the state's general fund.

While seeking to not raise the gas tax is admirable, Corzine is refusing to take necessary steps elsewhere in the budget to fix the state's structural fiscal mess. And that's only going to make the situation worse because the problems will be compounded in just a few years time.