New Jersey Department of Transportation will spend $4.5 billion on capital improvements in the new fiscal year.

Officials released the department’s fiscal ’24 capital financing plan on Tuesday. It leans on a mix of state and federal funding to bankroll repairs and upgrades to transportation networks across New Jersey.

“This capital program reflects the need to prioritize spending by carefully evaluating transportation needs and targeting limited resources toward safety, fix it first and state of good repair initiatives,” focusing on “safety, infrastructure preservation, mass transit, mobility and congestion relief, and operations and maintenance,” the department said in a statement.

The plan spends $2.8 billion on bridges, roads and highways, with a small $131 million subset for multimodal freight projects and bicycle and pedestrian improvements.

The state’s commuter rail and bus service, NJ Transit, will receive $1.7 billion for an array of work.

Officials announced in April that NJ Transit faced a fiscal cliff as federal COVID-19 relief funding dries up and ridership struggles amid post-pandemic changes to office work, and they expected to see revenue shortfalls starting at $119 million in 2025 and growing to $957 million by 2027.

NJ Transit has no dedicated funding stream and officials have instead relied on “the continued use of capital funds for operating expenditures,” said William Glasgall, senior director for public finance at the Volcker Alliance.

“The governor has dialed that back but it does continue, although the FY24 budget isn’t enacted yet,” he said.

New Jersey Assemblymember Eliana Pintor Marin, D-Essex, chair of the budget committee, said last week during a budget hearing with transportation officials that finding NJ Transit a dedicated funding source would likely not be addressed in the fiscal 2024 budget.

The New Jersey Transportation Trust Fund Authority plans to sell $938 million of tax-exempt special obligation revenue bonds in a two-tranche deal tentatively scheduled to price May 25, according to an online investor presentation.

The deal includes $674 million of transportation program bonds, 2023 Series AA, to refund outstanding bonds; and $262.8 of transportation system bonds, 2023 Series A system bonds to defease outstanding bonds subject to a tender offer from the authority.

Following the recent round of upgrades to New Jersey’s state bond rating, the transportation trust fund authority’s linked ratings are also up.

S&P Global Ratings assigned the bonds an A-minus with a stable outlook, one notch below New Jersey’s issuer default rating as funding for debt service was subject to annual appropriation by the treasurer.

“We view New Jersey’s involvement as ultimate obligor as strong; the intended payment source of motor fuels tax, other transportation-related revenues, and state sales and use tax also as strong; and we believe there are no material political or administrative risks to the appropriation of debt service payments.

Fitch Ratings assigned the bonds its A rating, Kroll Bond Rating Agency its A rating and Moody’s Investors Service an A2 rating, all with outlooks stable.

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