This summary was written by Jeffrey Stoller. Mr. Stoller is president of BJS Communications in Moorestown, N.J.
Jeanne Fox of Columbia University
For many years, New Jersey’s transportation, energy and water infrastructure has not kept pace with the urgent demands of its 21st century industries and population. Clearly, a major challenge for the state will be how to generate new funding for critical infrastructure upgrades when it is already facing large-scale fiscal problems.
That challenge was explored in depth during the 2019 Redevelopment Forum by a panel of leading infrastructure and policy experts including Jeanne M. Fox of Columbia University; Richard Keevey of the Bloustein School of Planning and Public Policy at Rutgers University; Anthony Attanasio from AECOM; and Chris Sturm from New Jersey Future, and moderated by Lester E. Taylor III, Esq., of Florio, Perrucci Steinhardt & Cappelli LLC.
Richard Keevey, New Jersey’s former budget director and comptroller, began with an overview of New Jersey’s current fiscal situation that highlighted:
- Forty consecutive years of property tax increases, with more ahead.
- Property tax revenues of $29.5 billion – more than annual income, sales and corporate tax revenues combined.
- Total state debt service of $4 billion – 11 percent of the state budget and the third highest in the nation.
- The second lowest credit rating of any state.
- One of the worst-funded pension systems in the country, with an unfunded liability of $115 billion.
- A projected gap between revenues and expenditures of between $ 3.3 billion and $4 billion.
- More than 500 local governments and school districts that rarely share services.
The problem of limited resources is all the more acute because the state’s infrastructure needs are so extensive. The American Society of Civil Engineers grades the condition of New Jersey’s existing infrastructure as D+. Several years ago, a State Budget Crisis Task Force estimated New Jersey’s total infrastructure needs and costs over a 10-year period at nearly $140 billion.
Despite this bleak outlook, there are efforts already under way to find long-term solutions. Speakers noted opportunities for progress, including:
- Closer coordination of key agencies. Significant savings are possible if New Jersey’s major infrastructure agencies and authorities work more closely together to coordinate capital plans and leverage their collective resources. For example, the New Jersey Transportation Agency Partnership (TAP) has been formed by the state Department of Transportation, the New Jersey Turnpike, NJ Transit, and the South Jersey Transportation Authority, to improve communications among themselves and with other stakeholders.
- A focus on the growing infrastructure “talent” gap. Even if money to design, procure for and build new projects becomes available, state agency staff are increasingly taking their extensive institutional knowledge into retirement. A strategy is needed to recruit experienced new staff at agencies like the DOT and DEP who have the ability to guide complex capital improvements in the years ahead.
- A shift to new energy sources. In the next few decades, traditional energy infrastructure such as natural gas power plants will eventually make way for renewable energy sources such as hydrogen, wind and solar power. Wastewater treatment plants will increasingly be energy self-sufficient by relying on sources like solar energy, more efficient operations, and technologies that extract energy from the sludge management process. In some cases, they may be able to power local micro-grids during power outages. New Jersey already has a significant number of photovoltaic generators powering homes and business, and offshore wind facilities will likely replace the 20th-century nuclear plants that will end their operations in the coming decades. (Some of the strongest consistent winds in the nation are found 20 to 30 miles off the New Jersey coast.) Technology will also drive development of energy storage equipment that lasts far longer than today’s batteries.
- Innovative water management efforts. Stormwater runoff is increasingly recycled and purified with nature-based filters ranging from “green roofs” to ordinary trees. And new technology will enable closer monitoring of leaks from water pipelines, which will save water and money and will help with new requirements for water purveyors to conduct water loss audits.
- Voter education efforts around needed rate increases. To cite one example, thanks to a strong public outreach effort, East Orange residents supported a dramatic increase in their water rates, because they understood that it was needed to ensure safe drinking water.
Ultimately, progress toward more efficient, fully funded infrastructure systems will require making many hard financial choices. Making those choices will be easier if New Jersey combines a strategic statewide Infrastructure Needs Assessment with a detailed multi-year state capital plan, in order to help guide all the public and private stakeholders involved.