New Jersey Gov. James E. McGreevey has proposed the creation of a Transportation Finance Corporation to provide $80 billion in transportation funding over six years without increasing the gas tax or the federal deficit.
McGreevey presented the plan at a governors-only meeting during the National Governors Association conference in Indianapolis. In a report titled "Bridging the Gap," McGreevey noted that states will need more than $97.6 billion annually in order to maintain the nation's transportation network over the next six years.
"The states not only need significant program growth," he said, "but we also need a six-year program that provides a stable and predictable funding source. Extending the current program by either one or two years would damage our ability to invest in long-term projects at a cost to the transportation industry and our residents."
McGreevey proposes that federal-aid highway and transit programs be reauthorized for six years and increased to a level of $300 billion, with $245.5 for highways and $54.5 for transit. An additional $60 billion would be provided for transportation through the issuance of $80 billion in tax-credit bonds by a Transportation Finance Corp. The remaining $20 billion would be used for a sinking fund to repay the principal, and funds from the Highway Trust Fund would be used to reimburse the federal treasury for the lost revenue from tax credits.
The proposal, McGreevey said, "is an alternative way to add $60 billion to highway and public transportation programs without a federal motor fuels tax increase, without adding to the national deficit and without shifting the burden to the states."
