Latest plan for billion dollar hike in NJ gasoline tax is disgusting.

New Jersey’s Transportation Trust Fund Authority (“TTFA”) is like Atlantic City government on steroids. For years it spent much more than the $1.5 billion it took in each year from tolls and gasoline taxes. It spent anywhere from four to eight times more for each mile of road here what was spent in any other state. It spent $600 million for 2.6 miles of causeway and three small bridges between Somers Point and Ocean City. That is three times more than what Virginia spent on its second Chesapeake Bay Bridge Tunnel that runs 17.4 miles through the ocean. It spent more than $1.1 billion to run mostly empty trolleys (light-rail) 34 miles between the dead downtowns of Camden and Trenton.

Like Atlantic City government under state “supervision”, the Transportation Trust Fund Authority borrowed heavily to support this unsustainable spending. It now owes $16 billion and is too broke to fix any more roads or bridges. It hocked every dime it will collect from tolls and gas taxes for the next 14 years to repay that debt with interest.

As with Atlantic City, there is a simple three-step process to clean up this mess. First, find out why construction and repair costs are so far out whack in this state. Second, we should change or get rid of those laws or regulations that drive up costs while doing little or nothing to promote safety or benefit the public.

Third, as with Atlantic City government, we need to get rid of most or all of that $16 billion of unsustainable debt that is consuming all of the $1.5 billion we pay for tolls and gas taxes each year.

However, there is one big difference between Atlantic City and New Jersey’s Transportation Trust Fund Authority. Atlantic City needs a messy federal bankruptcy to wipe out its unsustainable debt. New Jersey can get rid of all of its TTFA debt by simply complying with our State Constitution.

In countless decisions, including the Steve Lonegan case of 2003, our State Supreme Court ruled that without voter approval, debts and obligations of state authorities like the TTFA are not legally enforceable. Bondholders cannot force the state or its taxpayers to pay them unless a majority of voters approve the debt in a ballot question. None of the $16 billion debt of the Transportation Trust Fund Authority was approved by voters. Purchasers of its bonds were specifically warned of the risk in big bold letters written on the disclosure statements and bonds themselves.

There is a very good reason for this. Some 200 years ago, most state governments in America had high debt, taxes, and corruption very similar to what New Jersey has today. This caused a financial collapse known as the “Panic of 1837”.

New Jersey recovered from that disaster by changing our State Constitution to require voter approval for all future state government borrowing.

For years, New Jersey had no debt, sales tax, or income tax. During those years, our state grew and our economy boomed. That all changed starting in the 1960’s. That was when politicians and clever lawyers created dozens of “authorities” to by-pass this safeguard in our State Constitution.

If our State Senators and Assembly representatives understood and respected that Constitution, they would immediately refuse to fund any debt not approved by voters. They would let the mismanaged Transportation Trust Fund Authority collapse. Then they would redirect all of the $1.5 billion we pay each year in tolls and gas tax money as originally intended--to fix our roads and bridges. They would force the State Transportation Department to cut costs and live within its means.

But as with Atlantic City, they want to “rescue” the Transportation Trust Fund Authority instead. They plan to cut the estate tax for people who die owning more than $675,000. They offer tax breaks for certain retirees--including those 2,000+ retired public employees collecting getting pensions of more than $100,000 per year from insolvent Ponzi-style state pension funds. To pay for all this, they plan to nearly triple the gasoline tax to collect another billion dollars from the middle class. As with the Titanic, they give lifeboats to their rich friends, while everybody else drowns.

Seth Grossman, the executive director of Liberty & Prosperity 1776 (www.libertyandprosperity.org), is a former Atlantic City Council member and Atlantic County freeholder.  In 2013 he got 8% of vote running against Chris Christie in 2013 Republican primary for New Jersey governor.