Wednesday, February 22, 2006

More TTF plan and budget info

In an interview yesterday, the Philly Inquirer is reporting that Gov. Corzine took the Turnpike privitization off the table in the scramble to fund the Transportation Trust Fund before it goes broke in July. He plans to announce his solutions for the fund before March 21, the day that his total budget will be presented.

Corzine still wishes not to increase the gas tax, but the article does not state that he has ruled it out. He has not ruled out increasing the sales or income tax to fight the projected $4.5 billion hole in the budget.

Here's the part I didn't want to see, re: The TTF:

Refinancing the fund's debt of approximately $7.3 billion and pushing payments further into the future to pay for projects now is "a fiscally responsible" strategy, Corzine said. He has likened the strategy - used by past administrations - to stretching a home mortgage over 30 years instead of 20.
But critics argue that refinancing is only a temporary fix and will cost the state more in the long run. Yesterday, Corzine would not discuss specifics, saying only that the added hit that the state took depended on what revenue proposals he floated to lessen the blow.
"This will not be the only action we take" to fix the fund, he said.
New Jersey, which has the third-highest per capita debt in the country after California and New York, has done "too much borrowing for all kinds of crazy purposes," Corzine said. But issuing bonds to raise money for capital-transportation expenses is appropriate, he said.
"The idea of borrowing money to build 30 or 50 or 100-year assets, I think most intellectually honest individuals would say that's a good thing," Corzine said. "It spreads out the cost of who's paying for something and associates it with who gets the benefit."

Yes, it's like stretching the debt over 30 years instead of 20. That means you pay for ten more years, and pay interest for ten more years, and spend way more money over ten more years. It better not be the only action taken for the Fund; at this rate, maybe it'll take ten more years before we have this crisis again.

Seriously, do most roads and bridges really last 100 years? They'll need serious maintainence if we expect them to, and that takes serious funds- something we'll be short on in the future too, if we're still paying down the debt from decades gone by.

I'm disappointed that refinancing is a part of the plan for the TTF, yet I understand that it may be crucial to keeping the fund solvent in the near future. So, I'll wait until the final plan is announced next month before I get upset. The other elements of Governor Corzine's proposal may be bold and effective, and should be viewed as a complete package.

I sure hope the plan is bold and effective, because refinancing is simply shoveling off more debt payments onto my and my kids' backs.

1 comment:

Metroplexual said...
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