Budgeting and Appropriations

Annual budget; fiscal year begins July 1.

Bonding or Pay-as-You-Go

Combination of bonding and pay-as-you-go financing. The Transportation Trust Fund Act caps bonding at $1.6 billion annually. The cap is reduced by any revenue appropriations in excess of $895 million (N.J. Stat. Ann. §27:1B-9).

State-Level Funding Provided for DOT Budgets

FY 2011 (approved): $1.6 billion*
FY 2010: $1.6 billion*
FY 2009: $1.6 billion*
FY 2008: $1.6 billion*
*These numbers are for the NJDOT/NJ TRANSIT Transportation Capital Program only. In addition, in FY 2011, NJ TRANSIT has a total operating budget of $1.8 billion.

Allocation of Federal Transportation Funds to the DOT

Federal transportation funds that support the capital program, like other funding of state government activities, is constitutionally subject to appropriation by law through the annual appropriations act (N.J. Const. art. VIII, §1, 2). Any federal funds that become available to the state for transportation projects that have not been appropriated to NJDOT in the annual appropriations act are deemed appropriated and may, subject to approval by the Joint Budget Oversight Committee and the state treasurer, be expended for any qualified purpose (N.J. Stat. Ann. §27:1B-21).

Allocation of State Transportation Funds to the DOT

State transportation funds are generally legislatively appropriated as a lump sum appropriation to the Transportation Trust Fund, from which they are appropriated for specific projects as part of the annual appropriations act. The Transportation Trust Fund Act limits the final appropriation, exclusive of federal funds, to $1.6 billion (N.J. Stat. Ann. §27:1B-21.1 and §27:1B-22.2).

Traditional State Funding and Finance for Highways

Fuel taxes; motor vehicle/rental car sales taxes; vehicle registration/license/title fees and surcharges; truck weight fees; interest income; $200 million from the general sales tax; $200 million from the petroleum products gross receipts tax; contractual contributions; revenue bonds.

State Funding and Finance for Other Modes

Transit, rail, aviation, ports and bridges: Funded by the same sources as highways through the multimodal Transportation Trust Fund. Dedicated revenue supports the state transportation system generally.

Innovative Transportation Funding and Finance

GARVEE bonds; Build America Bonds; PPPs (used for at least two transit projects); design-build (no authorizing statute found, used as a component of at least three projects); traffic camera fees; toll credits or "soft match."

Dedicated/Restricted State Funds and Revenues

The state constitution dedicates certain revenues-including from the motor fuel tax, petroleum products gross receipts tax and a portion of the general sales tax-to transportation system capital improvements, and prohibits the Legislature from borrowing, appropriating or using any part of these funds for any other purpose (N.J. Const. art. VIII, §2, 4). Statute dedicates other revenue sources-including certain vehicle registration fees and contractual contributions-to the multimodal Transportation Trust Fund (N.J. Stat. Ann. §27:1B-20). The statutory dedication of revenues, unlike that in the constitution, is not binding on the Legislature. The appropriation act takes precedence over dedication language in statute, and the Legislature has chosen not to fully appropriate the statutory revenues eight times since 1985.

DOT Authorized to Retain Surplus Funds

No. Funds lapse at the end of the fiscal year to the general fund and are reappropriated to NJDOT the following year.

Legislative Approval Required to Move Funds Between Projects

Yes, in some cases. In general, executive agencies may apply to the director of the Division of Budget and Accounting to transfer appropriated funds. If approved, the funds are transferred and the Legislative Budget and Finance Officer must be notified. Certain requests, however, must be submitted to the Legislative Budget and Finance Officer for legislative approval.

Transportation Funding Allocations through Local Aid

Local aid is allocated by the commissioner of transportation, pursuant to annual legislative appropriations from the Transportation Trust Fund and subject to statutory minimums. Aid is allocated to municipalities and counties by statutory formulas based on road mileage and population, then the commissioner determines the priority for funding projects based on certain criteria. Municipal aid is used for road improvement projects and county aid for road and transit projects (N.J. Stat. Ann. §27:1B-25).