As we’ve written about extensively, New Jersey’s Transportation Trust Fund is soon expected to collapse after decades of irresponsible borrowing and bonding. The first article in our series, A Pattern of Failure, detailed the inability of the New Jersey Turnpike Authority and state legislators to raise tolls on the Garden State Parkway and NJ Turnpike according to bond agreements.
This lack of fiscal fortitude has unfortunately not been limited to NJTA. Instead of paying for infrastructure by raising tolls and taxes, Governor Corzine and NJDOT Commissioner Kolluri are advocating an “asset monetization” plan to pull the state out of this looming fiscal disaster. The plan is expected to be revealed on January 8th.
The Campaign has long argued that the more sustainable solution to New Jersey’s Transportation Trust Fund woes is to raise the gasoline tax to an appropriate level (see MTR #556, 490, 472, etc). New Jersey’s gasoline tax, at 10.5 cents per gallon (14.5 cents if you add in the petroleum products gross receipts tax) ranks third lowest in the country, with only Alaska (8 cents) and Georgia (7.5 cents) boasting a lower rate. Last raised in 1988, the 10.5 cents gasoline tax is worth about 6 cents today when adjusted for inflation.
Only Alaska, Georgia and Virginia have been more reluctant to raise the gas tax in the last 20 years. Nineteen states have somehow mustered the political courage to raise gasoline taxes in the last 5 years. Yet, with the notable exception of Assemblyman Wisniewski, New Jersey’s elected leaders have been too scared of perceived political suicide to consider a gas tax hike.
Established by constitutional amendment in 1984 and initially intended only to pay for transportation improvement projects, The Transportation Trust Fund received most of its income from 2 cents of the then 8-cent-per-gallon gasoline tax. The 1984 amendment explicitly stated that the money was to be used only to plan, acquire, build, and repair the transportation system, and expressly forbade the Legislature “to borrow, appropriate, or use these amounts for any other purpose, under any pretense whatsoever.”
