The Transportation Trust Fund Authority's (TTFA) financial planning includes short, medium, and long range elements. Planning for the Authority's next bond sale usually begins two to three months ahead of the planned bond sale date. The Authority works with the Office of Public Finance and the Office of the Attorney General to develop a detailed plan for sizing and structuring the pending bond sale. If it is determined it is in the best interest of the State to sell bonds on negotiated basis, the Authority also seeks sizing and structuring guidance from its assigned underwriter. On March 1 each year, the Authority must submit a medium range plan to the Legislature that shows how the Authority intends to finance the NJDOT/NJ TRANSIT Capital Program for the upcoming fiscal year. This annual financial plan includes estimated appropriation revenue, bond proceeds, investment earnings, and expenditures, but does not include detailed bond sale plans. The Authority also develops a multi-year projection model to determine the Trust Fund long-range financing capacity.
The TTFA authorized the sale of $1.247 billion in new money bonds in two series, the 2012 Series A Transportation System Bonds at $326 million and the 2012 Series AA Transportation Program Bonds at $921 million.
The Authority submitted a FY 2013 Financial Plan to the Legislature which outlines how it will finance NJDOT/NJ TRANSIT’s requested $1.6 billion capital improvement program.
The Authority's financing capacity is constrained by the relationship between its long-term revenue stream and its debt service schedule. Investors who are buying Authority bonds with maturities up to 31 years want reasonable assurance there will be funding available to pay principal and interest when they become due.
The Authority must not only consider its own debt service schedule but also the debt service payments made by NJ TRANSIT from Transportation Capital Program appropriations. While these debt service payments are not legal obligations of the Authority, they cannot be reimbursed by the Authority using bond proceeds. These payments must be financed with the TTFA's appropriation revenue. The Authority must compare the sum of its own debt service and NJ TRANSIT's Economic Development Authority (EDA) debt service with the dedicated appropriation stream in order to determine long-term financing capacity.
The existing financing plan, which is largely reflected in the TTF reauthorization statute (P.L. 2012, c. 13) enacted in June, 2012, assumes the issuance of $3.5 billion in new debt from fiscal year 2013 through 2016. That debt was to be financed with current interest bonds with maturities of up to 31 years. These resources are to be supplemented by pay-as-you-go funding, interest earnings, and bond premiums.
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