To new Transportation Commissioner Jamie Fox, the challenge is clear, and so is the solution: After years of “taking a Band-Aid approach to everything,” New Jersey’s transportation system is in crisis. The only way out is to raise taxes to replenish the soon-to-be-empty Transportation Trust Fund (TTF) and build a new rail tunnel under the Hudson.
“If we did a 30 cents a gallon gas tax, they (the public) would tar and feather us, and throw us out of New Jersey,” Assemblywoman BettyLou DeCroce warned, even though that tax hike would still leave New Jersey’s gas tax — currently the second-lowest in the nation at 14.5 cents per gallon — below New York’s 50.6-cent-per-gallon tax. DeCroce said the state should consider a mixture of solutions, such as extending the state sales tax to gasoline, which would generate the equivalent of 24.5 cents per gallon based on an average price of $3.50 a gallon. She also suggested increasing the petroleum products gross-receipts tax, which is levied at the refinery or distributor level; imposing a tax on airport car rentals, as most other states do; and adding a tax on containers that come into Port Newark and Port Elizabeth.
“Crisis is opportunity. We are broke. We can let our infrastructure fall apart and become worse. Or we can put the ‘D’ and ‘R’ aside and pass a revenue enhancer, whatever that is,” Fox said in an impassioned plea to business and labor leaders to fight for a stable, long-term source of funding for highway, bridge and mass transit projects.
“This is not an easy vote to pass,” Fox warned the New Jersey SEED (Society for Environmental, Economic Development) business-labor coalition in Atlantic City Friday, referring to polls showing that most New Jerseyans oppose an increase in the gas tax. “There has to be a revenue enhancer. If it’s a gimmick, we’ve failed. We have to tell legislators we will be there with them. Anyone who thinks we’re going to get this done without a tax is just mouthing words.”
Fox said in an interview following the NJ SEED speech that ideally he would like to increase annual state transportation capital funding from the current $1.6 billion a year to $2 billion. That hike has been recommended by Forward New Jersey, a broad-based pro-transportation coalition headed by State Chamber of Commerce President Tom Bracken, but one that would presumably require a larger “revenue enhancer” at a time when Christie may be about to launch a bid for the 2016 GOP presidential nomination.
Christie, who had previously ruled out a gas tax increase, said when he announced Fox’s nomination that “everything’s on the table.” When asked if that included a gas tax, he responded testily, “What part of ‘everything’s on the table’ don’t you understand?”
Assemblywoman Betty Lou DeCroce (R-Morris), who also serves on the Assembly Transportation Committee, said there is a growing recognition among Republicans that a revenue increase will be needed to pay for transportation capital projects.
“If we did a 30 cents a gallon gas tax, they (the public) would tar and feather us, and throw us out of New Jersey,” DeCroce warned, even though that tax hike would still leave New Jersey’s gas tax — currently the second-lowest in the nation at 14.5 cents per gallon — below New York’s 50.6-cent-per-gallon tax.
DeCroce said the state should consider a mixture of solutions, such as extending the state sales tax to gasoline, which would generate the equivalent of 24.5 cents per gallon based on an average price of $3.50 a gallon. She also suggested increasing the petroleum products gross-receipts tax, which is levied at the refinery or distributor level; imposing a tax on airport car rentals, as most other states do; and adding a tax on containers that come into Port Newark and Port Elizabeth.
Even Assemblyman Jay Weber (R-Morris), a former state GOP chairman and leading conservative, acknowledged that an increase in New Jersey’s relatively low gas-tax increase was a possibility, although he suggested it should be accompanied by a corresponding cut in the state’s high estate and inheritance taxes.
Political fear of raising the gas taxes is not confined to Trenton.
U.S. Rep. Frank LoBiondo (R-NJ), who serves on the House Transportation and Infrastructure Committee, noted that “just as New Jersey hasn’t raised its gas tax, the federal government hasn’t raised its gas tax either.” And just as New Jersey’s Transportation Trust Fund is scheduled to run out of money for new projects early in the next budget year, Congress was forced to do a short-term extension when its Highway Trust Fund started running out of money in July.
Finding a funding solution that guarantees the continued flow of federal transportation aid to the states is critical for New Jersey, whose $1.6 billion state Transportation Trust Fund is matched on a dollar-for dollar basis with federal aid, LoBiondo and Fox both noted.
“Am I worried?” Fox said, when asked about the fiscal problems that would be created if Congress was unable to agree on a sufficiently robust federal transportation funding formula. “Of course, I’m worried.”
