ATR Opposes Gas Tax Increase in New Jersey
Americans for Tax Reform president Grover Norquist sent a letter to the New Jersey legislature and Governor Chris Christie this week urging them to reject efforts to increase the gas tax. After years of reckless overspending, the Transportation Trust Fund has racked up $18 billion of debt and is close to running dry.
A second hearing will be held in New Brunswick on October 14 where a number of special interests are expected to reiterate their calls for a gas tax increase. The state should reject these calls because a gas tax hike would harm families struggling to make ends meet, families who have had to grapple with 20 new or higher federal taxes over the past several years. A vote for any transportation funding package that raises the gas tax without dollar for dollar tax cuts elsewhere would be a violation of the Taxpayer Protection Pledge.
New Jersey doesn’t have a revenue problem; it has a spending problem.
A large reason the Trust Fund is out of money is because capital costs for transportation projects are astronomically high. According to the Reason Foundation’s 21st Annual Report on the Performance of State Highway Systems, New Jersey spends $2.02 million per mile of highway, more than any other state in the nation. New York spends less than a quarter of what New Jersey does at $462,000 per mile on its transportation system. Project Labor Agreements and prevailing wage laws have greatly contributed to exorbitant costs and a bankrupt Transportation Trust Fund.
Transportation packages that do not contain solutions for reining in spending and addressing these cost-drivers will do little to solve New Jersey’s long-term problems. The legislature should commission an independent audit aimed at identifying waste and mismanagement of Trust Fund dollars. Otherwise, tax dollars actually spent on transportation projects will continue to benefit those who build roads far more than those who actually use them.
New Jersey is already among the highest taxed states in the nation. Residents pay the highest property taxes and some of the highest income and corporate taxes as well. The state comes in second to last for the Tax Foundation’s Annual State Business Tax Climate Index. Discussions revolving around raising the gas tax make it seem as if there is a race to the top on every tax that exists in the state.
Legislators should work to cut costs, rein in spending, and reject all efforts to increase the overall tax burden.