Pumping Dollars

What’s up with gasoline prices these days?  It’s traditional for prices to rise this time of year as refineries divert some of their capacity toward products for the winter heating season.  But let’s compare prices in neighboring areas across state lines.  According to MSN, the average price per gallon in Trenton is $2.69 while in neighboring Morrisville, PA, the average is $2.75.  OK – that makes sense – after all, everyone knows that New Jersey’s gasoline taxes are among the lowest in the nation.  But take another look.  Rounded to the nearest penny, the Keystone State’s tax is 51¢ while ours is 33¢.  So the before-tax price in Morrisville is $2.24, while ours is $2.36.  If I were cynical, I would suspect the oil companies are reaping another 12¢ per gallon windfall by taking advantage of New Jersey’s low tax.

Of course, New Jersey drivers get the privilege of sitting in their car while someone else pumps their gas.  That costs something – but 12¢ per gallon or $2.40 for a 20 gallon fill-up seems a bit high.  Having lived in Upstate New York for three decades, I am used to pumping my own gas in sub-zero weather, and I prefer the do-it-yourself method.  I’ve ranted about New Jersey’s full serve regulations in the past, but in this day and age, I’m laying back a bit because I don’t want to see thousands of gas attendants added to the unemployment lines.  I’ll defer further complaining until the jobs situation improves.

Nevertheless, in this time of fiscal distress, the state needs to find revenue wherever it can.  Since Governor Christie feels that millionaires can’t afford to participate in his “shared sacrifice”, it’s up to the rest of us.  Raising the gasoline tax will result in an added burden on the poor (that’s bad) and on out-of-state drivers who use our roads (that’s good).  To alleviate this burden, low income drivers who own cars should get a rebate or tax credit to offset the added cost.  As I outlined this approach in a previous blog post, this has several beneficial effects:

  • Since a gasoline tax is already being collected, the additional overhead burden on tax collection is minimal.

  • Increases in gasoline prices would encourage conservation and purchase of more fuel-efficient vehicles.

  • More people would consider using mass transit (assuming the Governor doesn’t decimate NJ Transit)

  • Less driving would reduce wear and tear on our highway infrastructure.

  • Given that we are in the Boston to Washington corridor, a good portion of the added tax revenue would come from out of state drivers when they fill up at our newly renamed Corporate rest areas.

So, if higher gasoline prices are inevitable, it’s better that the added revenue goes to New Jersey’s coffers than those of the oil companies.

What do you think, Blue Jersey?  Should New Jersey allow optional self-serve?  Will enough people pay a premium for full serve to keep many of the attendants employed?  Should our gasoline tax be in line with neighboring states?

Comments (8)

  1. Winston Smith

    They do not reflect huge environmental costs, nor do they reflect the fact that oil is a finite resource.

    We are treating a finite capital asset like income.


    Peak oil and global warming.

    The party is over. Wake up.

  2. Rosi Efthim

    Good catch on the oil companies’ extra little windfall on New Jersey gas purchases. I did not know that.

  3. JoeLoRe

    Interesting that the gas companies can get away with gouging us for 12 cents on the gallon, but Christie won’t raise the gas tax at all.

    I guess it is better that the gas companies get that extra money, their subsidies are really low and we don’t really need the extra cash because we are just going to keep cutting everything from the budget until it is balanced.

  4. SmartyJones

    I agree that optional self service is a good idea if we weren’t in a period of high unemployment.

    However, here’s what I see on Rt. 17 North, above the Garden State Plaza.

    The cheapest gas stations have lots of cars. (Exxon – NOT)  They have 1 or 2 guys serving at least 4 bays. I don’t know if that is the correct term, but I mean 8 lines of cars, depending upon where your gas tank is located.

    I don’t know their shift hours, but it has to be physically exhausting. Some drivers become exasperated and start to fill their own tanks.  It is generally overlooked.

    Here’s the kicker.  I assume many of these stations are independently owned, which I support.  Try to use a credit/debit card and you are foccked (I don’t).

    So,  the small guys are getting foccked by the big guys and are foccking the smaller guys – attendants and us.

  5. brendanod

    of gas prices is so fluid that that a 5 or 10 cent increase would hardly be noticed.

    The gas tax is and was treated  treated by Corzine and Christie as thrid rail politics.  I think people would rationally understand the need for continuous maintenance, upgrade, and expansion of our transportation infrastructure.  The tax should be legislated to increase with inflation.  I don’t think it is as 3rd rail as they seem to.

    Have you watched the show on history channel, IRT in India?  The show is amazing to me because it really shows how awful their infrastructure is in that country and how advanced our roads are.  I don’t know how India will ever become a first rate economy with the infrastructure problems they have.  It is vital that we maintain and expand our infrastructure to remain a dominant economy.

  6. Bertin Lefkovic

    I don’t have any documentation to support this, but the way that it has been explained to me by many different people is that providing a self-service option would most likely result in the self-service price being the same as what the full-service price currently is and the full-service price being significantly higher, because the marginally reduced labor costs would be more than offset by dramatically higher insurance costs.

    I don’t know what the incidence of gas pumping accidents by individuals pumping their own gas versus “professionals” doing it is, but whatever it is or isn’t, the insurance companies assign a higher risk to stations in states that allow self-service versus those in states like NJ that forbid it.

    I think that the gas tax can be increased somewhat, but I believe that toll increases can be a better source of income from out-of-state sources.  Clearly, increasing both hurts the working poor and middle-class, but that pain could be offset with state income tax deductions.

    Also, even if gas prices/taxes are cheaper in NJ than in DE, NY, and PA, bringing them in line with these other states will most likely result in less out-of-state revenue as out-of-state drivers will not have an incentive to fill up in NJ as they are passing through our state.

    That said, neither source of revenue is nearly as good as a truly progressive income tax, which is where I believe the progressive community should be focusing its efforts.

  7. Babs NJSD

    Do NOT pump gas!


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