ROI-NJ: Getting the most from N.J. infrastructure investments - Garden State Initiative



ROI-NJ: Getting the most from N.J. infrastructure investments

August 8, 2019


By Regina M. Egea, Garden State Initiative

There is broad agreement that infrastructure is the lifeblood of New Jersey’s economy. In a recent Fairleigh Dickinson University poll, 70% of residents rate the state’s roads, bridges and tunnels with the highest degree of importance to the local economy. Additionally, 63% believe the government is not doing enough to maintain them. They have good reason to feel that way: New Jersey’s infrastructure is rated “D+” by the American Society of Civil Engineers.

Time spent in traffic due to outdated or decaying infrastructure leads to additional costs in the delivery of goods and services. Those costs are felt by consumers and businesses alike.

In 2016, $16 billion of transportation spending was authorized to fund New Jersey’s Transportation Trust Fund for eight years through the 23-cent increase in the state’s gas tax. In 2018, the current administration increased the gas tax another 4.3 cents to ensure that funding source remained stable to improve our infrastructure.

New Jersey residents have good reason to ask the question: How is our money being spent? That was the question behind GSI’s latest research report, Adding It All Up: The Path to Saving $2 Billion on the Cost of New Jersey’s Roads and Bridges.

We’re paying more than ever in taxes to maintain and modernize our network of roads and bridges. The public is rightfully demanding an accounting of how their money is being spent and deserve a better return on their investment. New Jersey is an outlier, outspending our peer states by significant margins, while our infrastructure is not perceptively improving. This report demonstrates how transportation funds can be put to work more efficiently and, as a consequence, then pay down TTF’s debt more quickly, improve our infrastructure and ultimately reduce our tax burden.

When adjusted for population density and general costs of doing business, our analysis shows that New Jersey far outspends seven peer states in the region when it comes to core transportation services per state-controlled lane mile. New Jersey spends over $238,000 per state-controlled lane mile, the highest among the states analyzed. The next-expensive state, Massachusetts, spends only approximately $197,000.

If New Jersey spent on par with the second-best among the peer group, Delaware, taxpayers would save $1.5 billion; spending on par with the leader, Pennsylvania, would save $2 billion, or 20%, annually.

Now that we know we’re not spending money as efficiently as possible, what can we do to fix it?

Three common-sense strategies, employing best practices from other states, are detailed in this report and offer a path to achieve significant savings for taxpayers and provide funds for additional investments in modernizing our infrastructure. Included are:

  • De-layering and consolidation of services in the model of Massachusetts;

  • Employing private-public partnerships as utilized in Illinois, Indiana and Pennsylvania; and

  • Modernizing project planning, budgeting, and scoring as implemented in Virginia via Smart Scale, a scoring dashboard dedicated to picking the right transportation projects for funding and ensuring the best use of tax dollars.

Spurring an entrenched bureaucracy to action is a yeoman’s task. It is incumbent on all taxpayers, residents and business owners alike to demand action before another gas tax increase is on the table.

Regina M. Egea is president of the Garden State Initiative, an independent research and educational organization dedicated to promoting new investment, innovation and economic growth in New Jersey.