Will New Jersey Raise Its Gas Tax?

New Jersey's gas tax has been stuck at 14.50 cents per gallon since 1988; only Alaska's is lower. An Assembly committee began hearings on increasing the tax to fix crumbling roads and improve transit. It's high-end benchmark: a 31-cent increase.

3 minute read

October 3, 2014, 7:00 AM PDT

By Irvin Dawid


Steve Strunsky of NJ Advance Media writes two back-to-back articles for NJ.com on the per capita cost per year for motorists if a substantial gas tax hike was applied. He compares it to the annual cost if the gas tax remained at 14.5 cents*, ranked #50 [PDF] in the nation (includes the District of Columbia) as of July 1 by American Petroleum Institute (API).

To "raise an additional $1.6 billion a year for the [transportation] trust fund," writes Strunsky on Sept 28, the gas tax would need to be raised by 31-cents, resulting in an "estimated $200 annual cost...according to the state’s non-partisan Office of Legislative Services."

Assemblyman Scott Rumana, the ranking Republican on the state transportation committee, said he invoked the 31-cent figure during [the Sept. 24] hearing as a high-end benchmark for discussion purposes only, and he made it clear he was not advocating such a big increase.

While that may sound substantial, the cost of doing nothing is three times as much, "mostly to replace cracked rims or repair damaged suspensions," writes Strunsky on Sept. 29. That doesn't include costs of personal injuries (or deaths) where degraded road conditions contributed to crashes.

A 31-cent state gas tax hike would give the state a 45.50 cent tax, a nickel less than neighbor New York's, and the fifth highest in the nation, per API [PDF].

We last wrote in Dec., 2009 about an attempt to increase the NJ gas tax when it was the fourth lowest in the nation. That attempt was quashed by Gov. Chris Christie, though NorthJersey.com noted he had the public's backing:

The public, however, remains largely opposed to raising the gas tax. A poll released Tuesday by Connecticut-based Quinnipiac University found 62 percent of those surveyed oppose increasing the gas tax to pay for road and transit improvements in New Jersey.

However, according to NJ Advance Media for NJ.com, "Christie has recently been less adamant in his [gas tax increase] opposition. In a radio interview last week, Christie said 'everything is on the table for discussion'.”

Over the years, Gov. Christie has managed to divert funds to the state's ailing transportation trust fund without raising the gas tax.

In April we noted that Gov. Christie diverted Port Authority funds to pay for road and bridge projects.

In April, 2012, we summarizedNew York Times article that "notes that critics have suggested the decision [to cancel the $9 billion ARC project] 'was more about avoiding the need to raise the state's gasoline tax, which would have violated a campaign promise. The governor subsequently steered $4 billion earmarked for the tunnel to the state's near-bankrupt transportation trust fund, traditionally financed by the gasoline tax.'"

*According to NJ Spotlight, "New Jersey imposes a 10.5-cent-per-gallon gasoline excise tax on retail gas sales and a 4-cent-per-gallon petroleum products gross-receipts tax on motor fuels that is levied on refineries and distributors and then passed along to motorists." Lots of great information on NJ's gas tax in this article by Mark J. Magyar.

[Hat tip to Tanya Snyder, Streetsblog USA]

Sunday, September 28, 2014 in NJ.com

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