Lawmakers approved a plan Monday to borrow $6.4 billion over five years and refinance another $1.7 billion in debt to pay for road and rail projects through 2011, the first major legislative victory for Gov. Corzine.
The Senate's 25-13 vote, on the heels of a 48-28 vote in the Assembly last week, paves the way for $8 billion in transportation construction over five years — without raising gasoline taxes, but at a cost of about $20 billion over 35 years.
The program helps the Transportation Trust Fund avoid drying up in July, when its yearly debt payments would have consumed its $805 million in funding. But in 2011, unless lawmakers act further, the trust fund will again need to be rescued.
Democrats conceded the plan isn't a final answer for the trust fund but said it was the best option given the tax hikes likely to be considered for the state's operating budget.
"Gov. Corzine is presented with multiple problems, fiscal problems that were 20 or more years in the making. We can't realistically — nor should we, because we would ruin the economy of the state — deal with all the deficits in one year," said Sen. Raymond J. Lesniak, D-Union.
Corzine spokesman Anthony Coley referred to the bill as an "interim plan" that enables the state to keep receiving federal aid and provides fiscal reforms, such as limited spending on capitalized maintenance.
Some critics say they may sue to block the borrowing, saying it violates the state constitution because whatever savings are derived from the refinancing ought to be applied toward reducing the state's debt, not bankrolling new borrowing.
Environmental lobbyists and some transportation groups opposed the bill because language that would have limited spending on new highways was removed. They plan to campaign this fall against a constitutional amendment dedicating 1.5 cents from the gas tax to transportation construction, hoping that would derail the entire plan.
The plan calls for refinancing $1.7 billion of the roughly $7 billion in existing trust fund debt in May. That will reduce payments in the near term but cost $3 billion by the time it's repaid in 2024, with more than $1.6 billion of that in the last four years.
In May, the state also plans to borrow $1.1 billion in new cash from bondholders, money that won't be repaid until 2036 at a cost of $3.4 billion. And it plans larger borrowing in 2007, 2008, 2009 and 2010, too.
Source Asbury Park Press