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NJPIRG Law and Policy Center
The Star-Ledger
Mike Frassinelli


Amid a debate over whether New Jersey should increase its low gasoline tax to shore up the nearly broke transportation fund, a report released today cautions that gas taxes and other vehicle charges pay only half the cost of building and maintaining the nation’s roads.

In its report, the public interest research group NJPIRG said the notion by highway advocates that roads pay for themselves through "user fees" such as gas taxes is a myth.

"The amount of money that drivers pay in gasoline taxes is only loosely related to their use of the highways supported by these taxes," the group said.

Gov. Chris Christie has adamantly opposed increasing New Jersey’s gas tax which, at 10.5 cents per gallon, is the third lowest in the nation behind Wyoming and Alaska. The governor said Garden State residents are already overtaxed and that drivers have already had to contend with toll hikes.

A growing number of state lawmakers and public policy groups have advocated increasing the gas tax to prop up the Transportation Trust Fund, which pays for road and bridge repairs and transit services. The fund is set to run out of money early this year.

The NJPIRG report is not so much about a specific policy recommendation than it is about helping frame the debate over how to spend transportation funds most efficiently.

"We in New Jersey have precious dollars to spend — let’s spend them the right way," said Jennifer Kim, an advocate with NJPIRG.

The report also contends policies that give people alternatives to driving indirectly save the state money.

Noting that New Jersey exempts gasoline from the sales tax and has a combination of a high sales tax and low gas tax, Kim said, "New Jersey is the one state where the state loses money for the sale of gasoline. We’re subsidizing people to drive when they buy that gas."

New Jersey is the only state where the amount of money diverted from the general fund exceeds the value of state gas taxes, she said. If or when oil and gas become scarcer and more expensive, New Jersey taxpayer subsidies for gasoline will also grow more expensive, Kim said.

She said the canceled ARC train tunnel under the Hudson River, which would have doubled ridership capacity to New York City and increased property values along the line, is an example of a project that would have been a good investment for New Jersey.

Worried about billions of dollars in potential cost overruns, Christie terminated the project 10 weeks ago.

There has been speculation New Jersey would use part of its $2.7 billion share for the canceled project to salvage the Transportation Trust Fund, which over the years has been raided by politicians to pay for other projects.

The Christie administration in the coming weeks will likely announce its plan to cover the transportation fund.


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