New Jersey finance officials and executives from two large Wall Street firms are meeting behind closed doors to discuss the future of the state's Transportation Trust Fund Authority.

State officials said they are working with executives from Bear, Steams & Co. and Dillon, Read & Co. on the matter. A spokesman for Gov. Christinc Todd Whitman said the meetings are "closed," and would not provide details.

The firms are examining ways the state can recapitalize the fund, Wall Street sources said. The exact nature of their work could not be identified. State officials, however, confirmed that the firms are discussing a possible increase in New Jersey's gas tax to pump revenues into the trust fund.

The New Jersey Transportation Trust Fund Authority employs two financial advisers: Municipal Advisory Partners Inc. and Altman & Co. Sources said Bear Steams and Dillon Read are completing tasks similar to those performed by the financial advisers.

The trust fund has financed $4.3 billion of transportation projects since its creation in 1984. But the fund's enabling legislation ends in June 1995, and revenues currently dedicated to pay debt service on authority bonds are not sufficient to meet the state's transportation capital needs.

As a result, state officials are now seeking financial advice on how to capitalize the fund for the foreseeable future. New Jersey is economically dependent on its transportation infrastructure.

Most recently, the trust fund issued $400 million of debt in May 1994 through a competitive bid. The deal received an A-plus rating from Standard & Poor's Corp. and a Aa from Moody's Investors Service.

Carl Golden, a spokesman for Whitman, said that while Bear Steams and Dillon Read are working for the itate, neither firm is getting paid for its services.

"Dillon Read and Bear Stearns have offered advice, but they are not acting in any official capacity with the state," Golden said.

Wall Street sources said they are concerned that the relationship between the state and the two firms will give the bond houses an advantage if the fund selects underwriters for negotiated bond sales.

State officials said they have yet to determine if the bonds will be sold through a negotiated or competitive bidding process.

Bear Stearns served as senior manager on the trust fund's first, negotiated revenue bond offering in January 1985. Kym S. Arnone, an associate director at Bear Steams who handles New Jersey issues, said she was not authorized to speak to the press. A company spokeswoman said "we can neither confirm nor deny" the firm's dealings with New Jersey.

Mark Mayer, a senior vice president in the public finance department at Dillon Read, who also covers the state, said he has no Comment on the matter.

Whitman said last month that she is considering an increase in the state's gas tax and possible toll increases to recapitalize the trust fund.

Transportation Department spokesman Robert McHugh said the governor will likely announce a recapitalization plan when she presents her fiscal 1996 budget in February. The state's fiscal year starts July 1.

The state has recapitalized its transportation trust fund three times since 1984, when it was first created. When the trust fund was created, voters approved a constitutional amendment dedicating to the fund 2.5 cents of the state's 8 cent per gallon gas tax.

In 1988, the legislature raised the gas tax 10.5 cents per gallon, and the fund's dedicated portion was raised to 4.5 cents, McHugh said.

The gas the fund's principal source of revenue, generating about $138 million in 1993. The fund also receives a $24 million annul contributionfrom state toll roads and $30 million in trucking fees.

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