Gov. Jon S. Corzine revealed the details of his asset monetization plan to a packed statehouse today during his State of the State address, calling for 50 percent increases in tolls on the state’s highways beginning in 2010 as a way of fixing the state’s complicated financial problems.
Management of the state’s roads would be turned over to a new public benefit corporation, which could borrow against those increases in massive bond issues that would allow New Jersey to instantly pay down around half of its $32 billion debt and restock the Transportation Trust Fund, which is set to run out in a few years.
The trust fund is the major source of funding for the maintenance of New Jersey’s massive transportation system.
Other parts of the plan would include a state spending freeze for the next fiscal year, while simultaneously seeking out around $2.5 billion in budget cuts to address a $3.5 billion budget deficit and prohibit future budget increases that go beyond projected state revenue increases.
The other billion dollars in debt would instantly be eliminated by the plan, through the elimination of exorbitant debt service annually sustained in the state budget.
Also, any future measure that would incur debt without naming a dedicated revenue source would be put to a referendum, allowing New Jersey’s voters to approve the increased spending.
Gov. Corzine said this was the only feasible solution to the state’s financial woes.
“Pigs will fly over the state house before any budget or spending cuts can fix these problems,” Gov. Corzine said.
The projected toll increases – which would begin in 2010 and increase by 50 percent every four years thereafter – would mean the current average $1.10 toll paid today would balloon to over $5.00 by 2022.
The governor reminded the audience that tolls have never kept up with cost of living increases or inflation, noting the Garden State Parkway has seen only one increase, in 1989, over its entire history.
Reaction from legislators following the address was somewhat grim, with both Sen. Tom Kean Jr. and Sen. Alex DeCroce labelling the plan as a massive tax increase placed on the shoulders of New Jersey’s residents, especially those who commute.
New Jersey’s debt means that if equally shared, every resident would owe around $3,700.