BUSINESS & ECONOMY

Moody’s, Critics Worry About Affordability of TTF Plan

By Brenda Flanagan
Correspondent

“This bill is unfair to New Jersey’s future. It’s unfair to the responsibilities we have,” said Assemblyman John Wisniewski.

Critics waved big red flags as legislators approved raising New Jersey’s gas tax 23 cents to refuel the Transportation Trust Fund, which was running on empty. But it’s the so-called “tax fairness” provision — a $1.3 billion package of tax cuts passed to appease voters — that alarmed Wisniewski.

“Over the next decade this bill is going to take $12.3 billion out of the state budget,” he said. “We can’t afford it.”

Analysts warn the revenue drained by the tax cuts would rob the state of money needed to fully fund New Jersey’s education formula, pay for public worker pensions, even provide more beds for substance abuse patients. On cue, Wall Street credit ratings giant Moody’s this week ominously dubbed the TTF bill package “credit negative”.

“This tax plan will increase the budget challenges for the state’s general fund because it is reducing revenues that help support general obligations in the state,” said Moody’s Vice President Baye Larsen.

The gas tax increase is expected to raise $16 billion over eight years but if New Jersey borrows against that money to pay other bills, it piles onto the already staggering debt load New Jersey’s currently struggling to pay. Architects of the TTF package weren’t surprised at the negative assessment.

“At some point you just have to realize in order to get something done you’re going to sometimes have to accept something that isn’t ideal to you — and this wasn’t ideal to me — so it wasn’t a surprise,” said Senate President Steve Sweeney.

Sweeney and other TTF supporters today called on Gov. Chris Christie to sign the tax package passed last week. If he signs soon, the tax increase would hit the gas pumps — and people’s wallets — Nov. 1.