NJ Guv says No to recommended gas tax hike

December 9, 2003

New Jersey Governor James McGreevey (Dem) has rejected the gas tax increases recommended by a panel he established to report on transport finance. He said it was the "wrong time" because the economic recovery is too fragile. He has asked his secretary of transport to go through the budget, "find savings, reduce costs, reduce bureaucracy and reprioritize." He said the state would "find a way to make this work with the revenues we have."

He did say: "At some time it may become absolutely necessary to re-visit this issue, but that time is not today."

Minority Republicans had vigorously criticized the proposed tax increase of 12.5c/gallon (3.3c/L), an amount that would have almost doubled the present state tax of 14.5c/gal (3.8c/L). At one point proponents of the gas tax increase attempted to buy the support of Republican opponents representing the Jersey Shore by suggesting some of the gas tax revenues be used to abolish tolls on the Garden State Parkway. However the political reality apparently is that a gas tax hike is more unpopular than the tolls.

A big problem remains however. The state's transport trust fund, so-called, is being consumed by debt service on borrowings irresponsibly undertaken without any revenue to support them. McGreevey's panel said that within 18 months the fund will have no surplus over debt service at all. Much of the borrowed money has dissappeared down the financial sinkhole of silly light rail projects.

The broader use of tolls seems not to have been considered by the panel. TRnews 2003-12-09v2

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