N.J. Transportation Panel Hears Pleas for Higher Gas Tax

Raising New Jersey’s gasoline tax is the best way to replenish a nearly broke transportation fund, even if the move is unpopular with voters, proponents of increasing the levy testified at a public hearing.

The state must find at least $1 billion of new revenue to pay for road and bridge repairs, said Assemblyman John Wisniewski, a Democrat from Sayreville who is chairman of the transportation committee. He didn’t say where the money should come from. Representatives of AAA, the motorist group, and AFL-CIO, the nation’s largest labor organization, pointed to New Jersey’s gas tax, which is the second-lowest in the U.S.

“We need to speak to the elephant in the room, and that is the gas tax,” said Eric Richard, a lobbyist for the Trenton-based state AFL-CIO, which represents 1 million unionized workers. “Realistically, it’s the only solution to our problem.”

New Jersey’s 10.5-cent-per-gallon gas tax contributes about $500 million a year to the Transportation Trust Fund. All that revenue goes toward payments on $14 billion in debt, leaving nothing for new bridges, highway widening and other projects.

Republican Governor Chris Christie, who has opposed raising the gas tax, pledged in 2011 to use more cash and less debt for highway and bridge repairs. Instead, as state revenue came up short of forecasts, he put no money into the transportation fund for three years and borrowed $1 billion more than promised to keep it alive. The fund will be unable to borrow further by June 30, a year earlier than projected in 2011.

User Fee

Christie, when he appointed Democrat Jamie Fox last month to oversees state transportation spending, said he was open to all options for replenishing the fund. In the past, he had said he would never impose a higher gas tax on a population that pays the highest property taxes in the U.S.

Raising the tax “has to be part of the solution,” said Cathleen Lewis, a Florham Park-based lobbyist for AAA. She likened the charge to a user fee.

“There’s currently no other way to capture all of the users on our roads,” Lewis said.

Today’s hearing was the second of four scheduled around the state to consider suggestions for raising money for the transportation fund. Other options that have been suggested at the gatherings include applying the 7 percent sales tax to gasoline sales, merging transportation agencies for cost efficiencies and charging higher rates on toll roads.

Gordon MacInnes, president of New Jersey Policy Perspective, a Trenton-based group that advocates more government spending to benefit poor residents, favored applying the sales tax to gas and petroleum sales, and said doing so could raise $1.18 billion a year.

Assembly Speaker Vincent Prieto, who is among a group of Democrats who have spoken in favor of raising the gas tax, has said that the state would gain $50 million from each cent of an increase. Nobody at today’s hearing would say how much of an increase should be proposed.

“I’m hesitant to endorse a certain number,” Richard said.

Before it's here, it's on the Bloomberg Terminal.