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NJ Municipal Road Repairs – Where’s the Money?

  • 5 min read

Municipal road repair needs are staggering

New Jersey’s municipalities need help. They’re in need of an adequate, steady source of funding for their road repairs. A recent report prepared for the New Jersey Society of Municipal Engineers estimates the annual need for municipal road repairs at almost $1.3 billion. New Jersey’s municipalities, who are constrained by a 2% tax cap, cannot adequately maintain their streets without both more funding from the Transportation Trust Fund (TTF) and a more equitable way of sharing those revenues with the counties.

On June 23, 2016 committees of both the New Jersey Senate and Assembly approved bills to provide new revenues for the New Jersey Transportation Trust Fund which supports Department of Transportation (NJDOT), New Jersey Transit (NJT) and County and Municipal road, bridge and mass transportation projects. Providing the capital to maintain the state’s transportation infrastructure is vital to New Jersey’s economic health

Local Aid to Municipalities is Meager

Unfortunately for Municipalities, they are at the end of the line when it comes to distribution of revenues from the Transportation Trust Fund. For the past ten years New Jersey Municipalities have received only about 3% of the state’s transportation funding (see graph below).

NJ Trans Funding 2006 -16

This fact is especially troubling to local Mayors, Administrators and Engineers who are responsible for the maintenance of New Jersey’s more than 29,000 miles of municipal roadways representing 75% of the centerline road miles in the entire state.

New Jersey’s Centerline Miles of Roads based upon 2010 NJDOT Inventory

  1. NJDOT                  2,323 = 6%
  2. Authority                   411 = 1%
  3. County                   6,449 = 17%
  4. Municipal           29,408 = 75%
  5. Park                           649 =   2%
  6. Total                    39,241 = 100%

Local Roads don’t get enough funding from the Transportation Trust Fund

Local roads (county and municipal) carry over 50% of the traffic in New Jersey every day. Presumably, at least 50% of the fuel consumed in New Jersey is used while driving on local roads. Thus 50% of the fuel taxes are generated by vehicles travelling on local roads. Why isn’t 50% of the fuel tax revenue distributed to municipal and county governments to maintain their respective portions of New Jersey’s transportation network. Unfortunately, Governor Christie doesn’t believe that municipal and county governments are deserving of a share of the fuel taxes collected.

State and Federal Aid to Municipalities and Counties

Since 2009, annual allocations of $78.75 million each have been made for County and Municipal road repairs. The counties have also received $25 million annually for bridge maintenance (a task that is predominantly a county responsibility). Counties also get a much larger share of federal aid – $140 million annually, while municipalities get only $10 million annually.

Unfortunately for municipal governments, this cost sharing formula does not reflect the actual cost to maintain New Jersey’s Municipal Road network. Ideally, municipal and county governments should receive sufficient state and federal funding so that the portion of road repair costs financed through property taxes is similar.

Property Tax Distribution Rates

The New Jersey Department of Community Affairs reports that the state’s 2015 property taxes were distributed as follows:

  • School Taxes            52.3%
  • County Taxes           18.1%
  • Municipal Taxes       29.6%

While the ratio of Municipal to County Road Mileage is 4.56 to 1, the ratio of Municipal to County tax levies is only 1.64 to 1.

Potential Cost Sharing Alternatives

Cost Split based upon Road Mileage

One option would be to apportion TTF local aid revenues between counties and municipalities based upon the length of roads within each jurisdiction, or:

  • 81% for municipalities
  • 19% for counties.

County Freeholders, Engineers and Executives would likely argue that such an allocation of funds was unfair – since county roadways are often wider and carry greater daily traffic volumes than do municipal streets. Such factors increase construction costs and the needed frequency of road repairs.

Cost Sharing Considering Traffic Volumes and Weighted Road Mileage

It may, therefore, be fairer to establish a method of sharing local aid that considers traffic loads as well as roadway length and also gives county roads a mileage bonus to account for their greater average width.

In this alternative, each of these two components for the sharing of local aid – Traffic and Weighted Mileage is used to allocate one half of the local aid funds.

Traffic Sharing Factor

  • 50% County, and
  • 50% Municipal

Weighted Mileage Sharing Factors (Using an allowance for the average county road being 40′ wide versus 30′ average width for municipal roads)

  • Municipal Mileage Factor (MMF) = Municipal Miles/(1.33*County Miles + Municipal Miles) = 29,408/37,985 = 77%
  • County Mileage Sharing Factor (CMF) = 1.33*County Miles/(1.33*County Miles + Municipal Miles) = 8,577/37,985 = 23%

Local Aid Sharing  Formula based upon both Traffic and road inventory

  • County Share = (Traffic + CMF)/2 =      (50% + 23%)/2 = 36.5%
  • Municipal Share = (Traffic + MMF)/2 =  (50% + 77%)/2 = 63.5%

This proposal would:

  • Provide immediate property tax relief,
  • Help to support adequate municipal road repairs, and
  • Distribute fuel tax revenues evenly over roads that were used to generate them.

What do you think?