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New Jersey Transportation Trust Fund Authority  
      
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The Transportation Trust Fund provides funding for New Jersey's transportation system

Frequently Asked Questions


Q. What is the current financing capacity of the Transportation Trust Fund Authority? What are its sources of funding?

A. P.L. 2016, Chapter 56, as signed by Governor Christie on October 14, 2016, reauthorized the Transportation Trust Fund program and provided the Transportation Trust Fund Authority with new financing capacity.  An accompanying piece of legislation, P.L. 2016, Chapter 57, increased the petroleum products gross receipts tax on highway fuel from 2.75% to 12.85%, which converts to a cents-per-gallon rate increase of 22.6 cents (as of November 1st, 2016), and increased the tax on non-motor fuel petroleum products from 2.75% to 7%. The effective gas tax at the retail level, including both the motor fuels tax and the petroleum products gross receipts tax, increased from a base of 14.5 cents to 37.1 cents per gallon.  All of the revenue from motor fuels taxes are now constitutionally dedicated to transportation purposes in accordance with the voter-approved amendment of Article VIII, Section 2, paragraph 4 of the New Jersey Constitution, which appeared on the November, 2016 ballot.  In addition, the constitution continues to provide an annual dedication of no less than $200 million from the Sales and Use Tax.

Beyond the constitutional dedications, the Authority also receives annual revenue from contributions authorized by contracts entered into with the State’s toll road authorities.   Statutory dedications from certain motor vehicle violations and heavy truck registrations are also authorized, however those amounts are subject to appropriation and have not been provided by the Legislature in several years.

At its October 2016 meeting, the TTFA issued $3.2 billion in Federal Highway Reimbursement Revenue Notes, including $2.7 billion in indirect GARVEE bonds (2016 Series A) and a $.5 billion bank loan (2016 Series B). (See the GARVEE section of this website). These resources are projected to fully cover the TTFA’s cash expenses from fiscal year 2017 through fiscal year 2018.  

The 2016 reauthorization legislation also authorized bonding of $12 billion in fiscal years 2017- 2024 , the debt service for which will be paid solely from constitutionally-dedicated revenues.  These funding sources, as well as future pay-as-you-go appropriations from the revenue dedications, will satisfy the Authority’s fiscal needs during the eight year reauthorization period. 

The Fiscal Year 2017 Appropriations Act, which was enacted prior to the reauthorization legislation, recommended an appropriation to the TTFA of $1,296.8 million. As outlined below, this amount represented an increase of $100.9 million (8.4%) from the amount appropriated in the Fiscal Year 2016 Appropriations Act ($1,195.9 million), and is sufficient to pay for the Authority’s projected debt service costs.

The FY 2016 and 2017 appropriations are detailed below:

FY 2016 Appropriations Act*  
FY 2017 Appropriations Act*
$516.0m
Motor Fuels Tax
$515.0m
$215.0m
Petroleum Gross Receipts Tax
$218.1m
$452.9m
Sales and Use Tax
$551.7m
$12.0m
Toll Road Authority Contributions
$12.0m
$1,195.9m
Total
$1,296.8m

* Amounts shown are per Appropriations Act and does not reflect any lapses.

Of the amounts shown in the table above, all of the revenue generated from the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax are now constitutionally dedicated for transportation purposes, as is a minimum of $200 million annually from the Sales and Use Tax.

Beginning in FY 2017, annual revenues from the increased tax dedication are expected to significantly exceed the appropriations noted above. Those amounts are subject to appropriation by the Legislature.  Appropriations that exceed the annual amount required for TTFA debt service payments may be used to pay expenses on a “pay-as-you-go” basis.  Alternatively, if the Authority’s appropriations and other revenues exceed the amount required to meet its statutory purposes in a given FY, those additional amounts may be deposited into the newly authorized Transportation Trust Fund Account – Subaccount for Capital Reserves as a means of ensuring the adequacy of funding for future needs.

 

Q. What is the difference between the Transportation Trust Fund and the Transportation Trust Fund Authority (TTFA)?

A. The Transportation Trust Fund is also referred to as the Special Transportation Fund or the Transportation Capital Program. It is the project list that is submitted to the Legislature each year by the Commissioner of Transportation on March 1 and is approved in the Appropriation Act by June 30 of each year. The project list is the spending or contract authority that allows the New Jersey Department of Transportation (NJDOT) and New Jersey Transit Corporation to advance capital projects up to a specified limit.

The Transportation Trust Fund Authority (TTFA) is an independent agency that actually finances the cash disbursements to contractors as they occur for Transportation Trust Fund projects. The TTFA uses appropriated revenues and bond proceeds to finance the disbursements. The TTFA is a financing agency only with no involvement in the selection of capital projects.

 

Q. Which revenues are dedicated for transportation capital purposes in the State Constitution and which are not?
A. The Motor Fuels tax, Petroleum Products Gross Receipts Tax and general Sales Tax revenues are dedicated to transportation purposes by the State Constitution. The good driver registration surcharge fee, heavy truck fees and toll road authority contributions are dedicated by statute only.

Q. What is the difference between constitutional dedication and statutory dedication?
A. The Constitutional dedication is binding on the Legislature. However, the statutory dedication is not. The Legislature can use the annual Appropriation Act to override funding references in general statutes.

Q. Do the constitutionally dedicated revenues flow directly for transportation capital purposes or do they still need to be appropriated?
A. All revenues in New Jersey must be appropriated annually by the Legislature, even those dedicated by the State Constitution.

Q. Is it possible for the constitutionally dedicated revenues to be appropriated for a purpose other than the Transportation Trust Fund Authority?
A. Yes, the State Constitution only directs that the dedicated revenues be appropriated for the purpose of "paying or financing the cost of planning, acquisition, engineering, construction, reconstruction, repair, and rehabilitation of the transportation system in the State." There is no reference to the dedicated revenues flowing directly to the Authority.

Q. What is the current motor fuel tax rate?

A. As of November 1, 2016, the combined Motor Fuels/Petroleum Products Gross Receipts Tax rate at the consumer level is 37.1 cents per gallon on gas. The cents-per-gallon tax on diesel is 33.4 cents as of January 1st, 2017, and will rise to its full rate of 44.2 cents on July 1st, 2017.

Q. How does the annual spending authority provided by the newly reauthorized TTF program compare to past years?

A. Unlike the TTF legislation enacted in 2012, P.L. 2016, Chapter 56 does not prescribe the exact size of the TTF spending authorization for any given FY.  Instead, annual program spending plans of various sizes may be recommended so long as the total amount does not exceed $16 billion over the eight year period.  Ultimately, the Legislature must determine the precise spending authorization for any given FY.  The FY 2017 Appropriations Act authorized a TTF program totaling $1.6 billion, which matches the amounts that were authorized in annual Transportation Capital Plans from FY 2012 through FY 2016, including funds provided by the Port Authority of New York and New Jersey for the Lincoln Tunnel Access Program (LTAP).

 

Q. What percentage of the annual Transportation Trust Fund Capital Program is currently being spent on Authority debt service?

A. None. The Transportation Trust Fund Capital Program is a spending authorization for NJDOT/NJ TRANSIT capital projects. There is no line item for Authority debt service in the NJDOT/NJ TRANSIT capital program. Debt service is a function of the Transportation Trust Fund Authority which is separate and distinct from the NJDOT/NJ TRANSIT capital program. Debt service payments are funded through the State's annual capital appropriation to the Authority, not through the TTF Capital Program's spending authorization.


Q. The TTFA reauthorization statute enacted in June, 2012 authorized two types of bonds, namely Transportation System Bonds and Transportation Program Bonds. What is the difference between the two?
A. "Transportation System Bonds (referred to as "Prior Bonds" in L.2012, c.13) refers to bonds issued pursuant to authorizations previously provided in P.L. 1995, c. 108 and P.L. 2006, c.3, as well as any bonds issued to refund those “prior” bonds.  Transportation Program Bonds refers to bonds issued pursuant to the most recent authorization enacted in June, 2012 (P.L. 2012, c. 13) and any bonds subsequently issued to refund those particular bonds.

In fiscal 2013, the first year of the current re-authorization, the NJTTFA issued $1,247,000,000 of new money bonds consisting of $326,255,000 in 2012 Series A Transportation System Bonds and $920,745,000 in 2012 Series AA Transportation Program Bonds. The 2012 Series A Bonds used substantially all of the remaining new money bond authorization available for Transportation System Bonds (i.e., the “prior“ bonds) under the NJTTFA Act. The 2012 Series AA Bonds represented the first issuance of Transportation Program Bonds authorized under the Act. The proceeds of each issuance will be used to support transportation projects within the State of New Jersey.

In fiscal 2014 the NJTTFA issued $849,200,000 in new money 2013 Series AA Transportation Program Bonds. In fiscal year 2015, the NJTTFA issued $764,055,000 in 2014 Series AA Transportation Program Bonds and $297,500,000 in 2014 Series BB Transportation Program Notes, utilizing the remaining $326 million in bond cap carry forward from the prior authorization. In addition, the NJTTFA re-marketed a total of $297,500,000 of 2009 Series C and 2009 Series D variable rate bonds into fixed rate Transportation System bonds and terminated the associated Lines of Credit on those bonds. In the most recent fiscal year 2016, the NJTTFA issued the remaining $626,800,000 in bonding authority from the current reauthorization with the 2015 Series AA bond.

The Transportation Program Bonds will be issued as “state contract” debt backed by a new contract between the State Treasurer and the Authority. This contract pledges that constitutionally-dedicated revenues appropriated by the Legislature will be made available to the Authority for debt service payments on its Transportation Program Bonds. The Transportation System Bonds continue to be secured by the existing contract between the State Treasurer and the Authority which pledges that any dedicated NJTTFA revenues appropriated by the Legislature to the payment of such bonds will be made available to the Authority for debt service payments."

 

Q. How does the Authority go about selecting capital projects to finance?
A. The Authority has no role in selecting capital projects. NJDOT and NJ TRANSIT select the projects and submit them to the Metropolitan Planning Organizations and the Legislature for approval.

Q. What is " pay-as-you-go" and how is that term defined?
A. The TTF's "pay-as-you-go" component is equal to the appropriation revenue received by the Authority in a given year adjusted for any lapses, investment income, and Build America Bonds tax credits less the debt service payment for that same year. The difference represents the current year revenue that is available to pay capital project costs. Pay-as-you-go may also be derived from the State's contract with toll road authorities, subject to appropriations by the Legislature. Bond proceeds are added to "pay-as-you-go" revenue to cover total capital project costs for the year.

Q. Where is the Authority in reference to its current bond cap?

A. The The 2012 Series A bond issuance exhausted all $326 million of the remaining bond cap authority for the "old" TTFA Transportation System bonds.  From 2012 through 2016, the TTFA issued Transportation Program bonds in exact conformance with the amounts stipulated in the previous reauthorization legislation. The TTF reauthorization bill enacted in 2016 provides for an additional $12 billion in bonding capacity over the FY2017 - FY2024 period.  Unlike the previous reauthorization bill initiated in fiscal year 2012, the current program does not prescribe annual bonding limits by fiscal year. Provision of an overall cap, covering the entire reauthorization period, provides greater flexibility in determining the timing and size of prospective bond issuances. The Authority has not, to date, issued any state contract debt under the newly authorized program.

 

Q. What is the maximum maturity of TTFA bonds?
A. 31 years.

Q. When does the current capital program authorization expire?
A. P.L. 2016 Chapter 56, authorizes a $16 billion capital program from FY 2017 through FY 2024, which ends on June 30, 2024.
Q. When does the Authority expire?
A. Never. All reference to Authority expiration dates were removed from the TTFA statute in the 1995 Legislative Reauthorization.

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