NJ Gas Tax Increase Must Not Be a Bargaining Chip

Image: Cyndy Sims Parr/Flickr

The good news: New Jersey Governor Chris Christie said he will consider signing a bill to raise the state’s gas tax if one crosses his desk.

The bad news: He’ll only sign that bill if the state legislature finds a way to cut taxes elsewhere.

The governor — who, by the way, never called for tax cuts to match the 9 percent New Jersey Transit fare increase which took effect today — calls this “tax fairness.” We call it irresponsible.

Governor Christie has been playing fast and loose with the Garden State’s transportation funding structure since announcing his 5-year capital plan in 2011. While it looked great on paper, without dedicated revenue to support it the plan was DOA. The entire plan, which was set up to rely less on debt and increasingly more on PAYGO, was predicated on nonexistent revenue. So with each passing year, the plan failed to deliver as promised and the PAYGO funds were diverted to the state’s general fund.

While the governor did not specifically endorse a particular tax cut, any deal that involves decreased revenue to the general fund could cause additional transportation funding shortfalls.  Just look at the recent NJ Transit operating budget shortfall of $60 million which led to a fare hike and service cuts. The state’s contribution to NJ Transit for operating assistance has decreased substantially from about $278 million in 2005 to a mere $33 million in 2016. That hole has been plugged with monies meant for the Clean Energy Fund and — you guessed it — the Access to the Region’s Core project.

New Jersey’s credit rating fell nine times under Christie’s watch due to fiscally irresponsible budget practices. If the legislature were to push for a tax trade off it would create additional financial problems for the state, potentially depriving the general fund of hundreds of millions of dollars annually. So to answer your question, Governor Christie, no, the state hasn’t “ground to a halt,” but with the way things are going, it will soon.

The governor blamed the heavily-Democratic legislature for “not putting anything on his desk to deal with the Transportation Trust Fund.” Yet he has made it clear since as early as 2012 that he would not sign any bill to increase the gas tax, and more recently, signed an “anti-tax pledge.” But the threat of a veto hasn’t stopped the Democrats from pushing other tax increases.

In 1933, the nadir of the Great Depression, the state’s gas tax was 3 cents per gallon – the equivalent of 55 cents per gallon today. Today, the real value of New Jersey’s gasoline tax, which has remained unchanged since 1988, has reached an all-time low and continues to fall leaving less and less money to meet the state’s growing transportation needs.

The current legislative session is well into the fourth quarter and the clock is ticking down on the Transportation Trust Fund’s solvency, but instead of working to find a solution to the problem, the governor is using the gas tax as a bargaining chip for other tax reform.

Yes, there is a crisis, but not because the state is running out of transportation funds. The crisis is that this governor doesn’t seem to recognize it.

Tick-tock.

2 Comments on "NJ Gas Tax Increase Must Not Be a Bargaining Chip"

  1. Mark Hutchinson | October 2, 2015 at 7:39 am |

    16 billion dollars in debt, most of it borrowed without the citizens voting on it as required by the State Constitution. Read the bonds they say we are not responsible for paying it back. The only way to fix it is to repudiate the unconstitutional debt.

  2. Clark Morris | October 2, 2015 at 8:49 pm |

    Let’s see, the taxpayer is paying over 50 percent of the cost of the ride for transit and that only is operating costs. The taxpayer also is on the hook (and/or the Port Authority) for the buses and trains as capital expenditures. To intra-state commuters who have to drive to work in part because some trips that might be viable by rail are ignored because New Jersey Transit doesn’t have reverse commuting ability on the line, doesn’t have schedules that allow commuting from many Shore and Corridor stations to places like Elizabeth or doesn’t integrate its bus and rail service. This is especially galling since the New York bound commuter pays most or all of the income tax dollars to New York, not New Jersey. Hamburg, Germany learned how to integrate all modes on one fare system over 40 years ago. New Jersey Transit has yet to integrate interstate bus, intrastate bus and rail.

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