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Would You Be OK with a 24-Cent Gas Tax? [AUDIO]

Finding a funding source to pay for fixing New Jersey’s decaying roads and bridges is a hot topic in the State House, and pressure is mounting for a gas tax increase of some sort. New Jersey Policy Perspective, a liberal Trenton think-tank, is now proposing an outside-the-box idea that is sure to generate a lot of debate.

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Gas Pump
Kevork Djansezian, Getty Images

NJPP suggests expanding the state sales tax to have it apply to gas too.

“Our recommendation is that we apply the sales tax to gasoline purchases,” said NJPP president Gordon MacInnes. “If you apply a sales tax rate of 7 percent to gas prices, at today’s prices in New Jersey that’s the equivalent of about 24.5 cents a gallon.”

Although he is hesitant to do so, MacInnes said he does support constitutionally dedicating revenue from sales tax expansion to transportation projects. He said the Transportation Trust Fund is broke, and anyone who has driven New Jersey roadways or taken a train knows the state has a lot of work to do.

“At today’s gas prices you would be able to generate in the range of $1.2 to 1.4 billion a year,” MacInnes said. “If gas prices go down you pay less, and if they go up you pay more, so it adjusts automatically for inflation.”

Funding for the state TTF would be boosted by 25 percent for the next 10 years, up to $20 billion over the decade from $16 billion if NJPP’s recommendation is enacted, MacInnes said.

“It’s no surprise that funding for the Transportation Trust Fund has stagnated, since New Jersey’s leaders have been unwilling to raise additional money to support this important investment,” said NJPP budget and tax analyst David Rousseau in an emailed press release. “Policymakers haven’t increased the tax on gas in nearly 25 years and, as a result, New Jersey’s gas tax is now the second-lowest in the nation and the state is running out of options to fund vital transportation needs.”

A copy of the report, “Taking Bold Action on Transportation Will Give New Jersey’s Economy a Firm Foundation for the Future,” is available at www.njpp.org/assets/reports/NJPPTransportationApril2014.pdf.

Gov. Chris Christie is on record as being adamantly opposed to new or increased taxes.

“The governor does not support increasing taxes on New Jersey families,” said Christie spokesman Kevin Roberts. “New Jersey has one of the highest overall tax burdens in the country; we should not be adding to that already heavy burden on taxpayers.”

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