New Jersey Transportation Fund Almost Empty After $1.75 Billion Bond Deal

New Jersey’s Transportation Trust Fund Authority approved $1.75 billion in new and refunding bonds, using up almost all the borrowing capacity in the state’s main funding source for highway and mass-transit improvements.

The debt, consisting of as much as $1.25 billion in new money and $500 million in refunding, is scheduled to price later this month. The authority approved the transaction at a meeting near the state capital of Trenton today.

The transportation fund for the most densely populated U.S. state will run out of money for new projects by next year unless officials allocate new sources of revenue. Debt service on more than $12 billion in authority bonds outstanding will consume most of the $895 million in revenue, including gasoline taxes, that is paid into the fund annually for the next 31 years, authority projections show.

“This fall I will put forward a plan for the TTF,” Governor Chris Christie, a first-term Republican, said at a press conference on an unrelated matter in Camden today.

Christie, 47, has said he would renew the transportation trust fund without raising New Jersey’s 10.5-cents-per-gallon gas tax. Democrats, who control the Legislature, are urging an increase in the tax, the third-lowest in the U.S., according to a July report from the American Petroleum Institute.

The bonds will help support a $3.54 billion spending program for highway and mass transit during the fiscal year that started July 1.

Barclays Plc is manager of the bond issue.

To contact the reporter on this story: Dunstan McNichol in Trenton, New Jersey, at dmcnichol@bloomberg.net.

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