TRENTON - Proposed diversion of $90 million from the Transportation Trust Fund to the state's General Revenue Fund is unsound fiscal policy says Judith C. Cambria, tax policy advisor to New Jersey Policy Perspective.

"Basically this is a raid on the Transportation Trust Fund, which is supposed to be used for improving our roads, bridges and mass transit system," she said.  "It results in an increase in the amount of borrowing by the Fund to enable diversion of $90 million to pay for annual operating expenses."

State officials announced last week that the proposed Fiscal Year 2002 budget would put into the general state treasury $90 million in revenue from motor vehicle registrations and diesel fuel taxes that had been dedicated by law to transportation purposes and allocated to the Transportation Trust Fund for capital improvements.

At the same time, the proposed budget gives permission to increase borrowing beyond the $650 million authorized last year by $85 million-or 94% of the amount diverted.

"There is no defensible reason for this fiscal sleight of hand," Cambria said. The proposed state budget calls for an increase of $1.7 billion, but the state still needs $90 million more from the Transportation Trust Fund to pay its regular bills."

The state has refused to adequately fund essential transportation improvements or consider a gasoline tax increase that would provide stable funding. New Jersey has one of the nation's lowest gas taxes.

From 1996, 89 percent of the spending by the Transportation Trust Fund has been with borrowed money.  The Fund has borrowed more than $5.5 billion since 1993, and debt repayments in 2002 will eat up $468 million of our tax money.

Cambria pointed out that when the state last year sought voter approval to increase Transportation Trust Fund borrowing, the money was said to be needed for major spending on necessary projects.

"The public has shown its support for improving our transportation system by dedicating money from three different taxes in 1995 and 2000 and approving the $500 million bond issue in 1999," she said.  "They expected this would increase the money available to improve roads, bridges and mass transit-not be siphoned off to pay regular ongoing expenses.  Skimming and pushing more and more costs off to the future is cynical and short-sighted."

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