The Real Gripe about Gas Tax

February 16th, 2006 by Tim Evans

With all the controversy over raising the gas tax, it’s interesting to note that New Jerseyans today ante up about 40 cents more per gallon than they did just eight weeks ago, without any notable protest.

The average price of gasoline statewide was $1.99 per gallon just before the December holidays.

This week gas prices average about $2.39 per gallon, even higher in some regions.

Sadly, this difference goes directly into oil company coffers with little direct return benefit to New Jersey.

New Jersey has the third lowest gas tax in the nation, at 10.5 cents per gallon; only Alaska (8 cents) and Georgia (7.5 cents) are lower. In neighboring New York, the state gas tax is 23.2 cents per gallon; in Pennsylvania, it’s 30 cents.

(Source: AAA, automotive.com and the US Energy Information Administration)

PUTTING THE TRUST BACK IN TRUST FUND
Can it be that New Jerseyans trust the oil companies more than their own state government?

The lack of outcry over a 20 percent jump in gas prices in recent weeks suggests they might, especially when contrasted with the protest of some to any minimal rise in the state gas tax.

Yet New Jersey’s most pressing financial problem is transportation funding. By June 30, the state will have depleted all of the revenue sources it now uses to pay for the maintenance and improvement of our road and transit systems. Nearly every penny paid through fuel taxes and fees will be needed to cover debt from past transportation spending. Moreover, if the problem isn’t corrected, billions of dollars in matching federal transportation dollars are at risk.

Borrowing brought New Jersey’s Transportation Trust Fund to its knees, and public trust in state government along with it. It will take bold leadership by the Governor and state legislators to reform today’s system and restore public trust, even as we search for new revenues to keep New Jersey moving. Raising New Jersey’s gas tax, one of the lowest in the nation, should be a part of these considerations.

For questions about this issue of Future Facts, contact Tim Evans, research director.