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$3.5B in Transportation Work Halts in NJ

Monday, July 11, 2016

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Hundreds of road and bridge projects valued at nearly $3.5 billion have been shut down as of Friday (July 8) as transportation funding in New Jersey threatens to run out by late summer.

Republican Gov. Chris Christie’s office released a 50-page list Wednesday (July 6) indicating all of the bridge, road and mass transit renovations that will be put on hold after being judged nonessential.

Gov. Christe, Acting Gov Guadagno
State of New Jersey Office of the Governore

Gov. Chris Christie declared a State of Emergency, calling for a stop to all nonessential transportation projects, based on the condition of the state's Transportation Trust Fund. Acting Governor Kim Guadagno released the list of affected projects in his absence.

The emergency action comes after the state legislature failed to approve a proposed gas tax increase intended to replenish the state’s Transportation Trust Fund (TTF). 

Halting these projects is meant to conserve what little money remains in the TTF. According to Executive Order No. 210, issued at the end of June, a State of Emergency exists because the fund has only enough reserves to sustain it through August.

“As this executive order states, in order to protect the health, safety, and welfare of the citizens of this State, it is necessary that the remaining amounts held by the TTF not be spent on any transportation project that is not absolutely essential,” Governor Christie stated in signing the Executive Order.

The plan exempts projects deemed essential for the protection of the health, safety and welfare of all citizens and will not impact projects funded through federal sources, Acting Governor Kim Guadagno explained in the announcement issued while Christie was travelling out of state.

Bridges, Roadway, Rail and Air

As specified in the order, the work stoppage was to be put into effect by 11:59 p.m. Friday (July 8). It is slated to extend for a period of at least seven days or until it is determined that an emergency situation no longer exists.

The order also called upon the New Jersey Department of Transportation (NJDOT) and NJ TRANSIT (NJT) to identify their nonessential state-funded projects. The two groups assessed and prioritized jobs in order to get the most benefit out of the remaining TTF funds.

In a 43-page document, NJDOT tapped more than $646 million worth of projects for stoppage, including maintenance pavement markings; maintenance bridge painting; maintenance concrete structural repair; steel and aluminum maintenance; intersection improvements; structural steel repair; roadway repair and resurfacing; bridge replacement, reconstruction, rehabilitation and repair; drainage improvements; rail replacement and expansion; airport runway rehabilitation and construction; and other road improvement and reconstruction projects.

road striping truck
© iStock.com / Andyqwe

Projects among those being halted July 8 range from concrete structural repair and bridge replacement to maintenance bridge painting, pavement marking and roadway resurfacing.

Another $129 million worth of “non-construction” projects related to roadways, bridges and rail were also specified. These contracts involve design and engineering, problem screening, concept development, environmental services, maintenance operations (including bridge and inspection services), construction inspection, highway and multimodal planning, support services, and maritime resources.

Savings to the TTF through NJDOT’s eligible projects total $775,684,072.95.

In its 7-page list, NJT identified $2.7 billion worth of projects under its programs that could be put on hold. Planned work and purchases on this list include station rehabilitation and repair; vehicular rehabilitation and refurbishment; bridge repair, rehab and design; and a bridge painting program, in addition to purchases of new locomotives and commuter buses and other projects.

Work on other transportation projects will be permitted to continue at the discretion of the Commissioner of NJDOT and Executive Director of NJT, and after consultation with the Office of the Governor, if those projects are absolutely essential for the protection of the health, safety and welfare of the state’s citizens or are required to ensure the receipt of federal funding. 

Funding Debate

According to NJ.com, Christie had proposed that the TTF could be replenished through a gas tax hike to 23 cents per gallon. (New Jersey has the second lowest gas tax in the nation, at 14.5 cents per gallon, The New York Times reported.) In exchange, the state’s sales tax would be reduced from 7 to 6 percent by 2018.

However, members of the state senate could not support the deal, they said, because it would pose an almost $2 billion blow to the state budget.

The senate’s alternate proposal is to raise the gas tax as described above, but in return to eliminate the state estate tax, create a tax deduction for charitable donations, expand a tax credit for the working poor, and raise the retirement income tax exclusion, the news site said.

Lawmakers plan to return to work at finding a funding solution the week of July 11.

Christie TTF conference
Governor's Office / Tim Larsen

Governor Christie held a press conference on the status of the Transportation Trust Fund in in late June.

In the meantime, the New Jersey State League of Municipalities (NJSLOM) and New Jersey Association of Counties (NJAC) urge state leaders to reach a compromise.

“The declared state of emergency is forcing county and municipal governments across the State to shut down operations on critical road and bridge projects that will jeopardize local businesses and economies and place the safety of residents at risk,” NJSLOM Executive Director Michael Darcy said in a joint statement

Other critics question Christie’s move to shut down work when funds remain available until August (about $85 million remains available, according to NJ.com) while pointing the finger of blame on the legislature’s failure to act.

“He didn’t have to do it so quickly,” Senate President Stephen M. Sweeney told the Times. “We should be trying to find a solution.”

Industry Response

Those at work in the industry expressed frustration at the timing of the shutdown—not only during the busy summer construction season but also as the state confronts a backlog of delayed maintenance work, NorthJersey.com reported.

“This is the best construction weather you can get,” Darcy told the area news site.

While some of the affected projects carry a high price, such as the $13.2 million needed to rebuild the Eighth Street over the Passaic River, many projects run at costs of less that $200,000, like the repaving and striping jobs identified in NJDOT’s list.

But those small jobs add up.

Todd Hay, vice president of the Newark branch of the New Jersey Society of Municipal Engineers, pointed out that with hundreds of such projects stopping simultaneously, contractors and construction works are going to take a hit that is both “immediate and devastating.”

“It couldn’t have come at a worse time,” Hay said. “For contractors, this is their bread-and-butter work.”

   

Tagged categories: Airports; Bridges; Funding; Government; Infrastructure; Infrastructure; Jobs; Maintenance coating work; North America; Program/Project Management; Rail; Roads/Highways; Striping; Transportation

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