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What We Now Know (maybe)

by: Creed Pogue

Wed Nov 28, 2007 at 11:47:32 PM EST



The current motor fuels tax is 10.5 cents per gallon of gasoline and 13.5 cents per gallon for diesel.  This tax brings in $553 million a year of which $483 million is Constitutionally dedicated to the Transportation Trust Fund and $45 million to New Jersey Transit.  It would appear that an additional $25 million of diesel tax revenue also goes to the TTF for a total of $508 million. 

Assemblyman Wisniewski, the Chair of the Transportation Committee, has made a proposal to double the gas tax instead of tolls.  Transportation Commissioner Kris Kolluri has said that to pay for the transportation needs of New Jersey that the gas tax would have to increase to $58.5 cents.  Wisniewski has responded with the logical statement that if the Commissioner could specify an amount that the gas tax would have to increase, then the Commissioner
(more to come)

Creed Pogue :: What We Now Know (maybe)
also knows how much tolls would have to increase.  If the Constitutionally dedicated 10.5 cents tax produces $528 million, then each cent of tax produces $50.3 million.  A gas tax of 58.5 cents would therefore produce $2.94 billion which is an increase of $2.39 billion over what we receive now.

According to the Turnpike Authority 2006 Annual Report, toll revenue for the Parkway and the Turnpike was $737.3 million.  (I do not know where the APP has come up with $1.12 billion in toll revenue across New Jersey because the Expressway is only another $50 million).  In order to produce $2.39 billion more a year, Parkway and Turnpike tolls would have to increase by 3.24 times over what we pay now.

It is quite possible that the Commissioner's figures were based on the ultimate dream list rather than anything seriously being discussed.  We could probably finance $50 billion with a $2.39 billion annual payment.

It would also appear to be true that $20 billion of bonding over 40 years at 5% would cost $1 billion a year.  That would require the tolls on the Turnpike and Parkway to increase by 136%.  It could instead be paid for with an increase in the gas tax of 19.9 cents.  This would take us from the lowest in the nation to 5.8 cents higher than New York's and 0.8 cents lower than Pennsylvania's.

However, it may free up $1.5 billion currently being paid for debt service.  That would keep the rebate program afloat.

There is still a lot we don't know.  There is a lot of back and forth about paying for new transportation needs and paying off old debt.  If we don't want to move from the frying pan into the fire, we should make sure the two are kept separate.  One thing that everyone can agree upon is that there is no easy fix.  But, that makes it even more important to not dig the hole any deeper than it already is.

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good idea, but a hard sell (0.00 / 0)
If there is anything that the people in this state would hate more than a increase in tolls, it would be an increase in gas taxes, especially considering that there are plenty of people like me who drive 40 miles or more per day round trip, but never pay a single toll, especially as more and more people live in the western part of the state and work in its eastern part.

Any thoughts on how you would sell this idea to the public?  I understand everything that you have written above and I also understand the benefits of a gas tax that you did not mention above, but I am smarter than your average NJ voter, who is prone to irrational anger over any form of tax increase.  What do you tell them?

Also, how would NJ's gas tax compare with Delaware's?  Right now, cars and trucks, traveling through NJ are more apt to stop in NJ to refill their tanks, because if they drive through regularly, they know that we offer the cheapest gas around, but that is likely to change dramatically, once drivers notice a nearly 20 cents per gallon increase.

Is it possible that the gas tax would have to be increased more to offset a dramatic decrease in out-of-state utilization.  If so, we are back to a solution that puts the onus on NJ residents, which in my opinion would require a tax deduction for the working poor and middle class to minimize the impact and also make this idea sellable.

It should also be noted that due to the current debt crisis in this country, next year and possibly the year after will be the best opportunity that the state will have to refinance its debtload, so whether bonding is paid for with an increase in tolls or an increase in the gas tax, it should happen sooner rather than later.

Unfortunately, the 2008 and 2009 election seasons will probably prevent anything groundbreaking from happening until the lame duck session in 2009 at the earliest and by then, NJ will have probably missed its opportunity to get the most bang for its buck.

None of these questions are intended to discredit Creed's proposal in any way.  At its core, this is an extremely sound proposal and a testament to why Creed should stick to talking about fiscal issues, where his expertise is undoubtedly valuable, instead of social issues like marriage equality, where his pragmatism often, if not always, comes across as something far worse.


Straw Men and Backhanded Compliments (0.00 / 0)
I did not advocate for an increase in the gas tax.  I simply did the math that no one else (outside the Front Office-maybe) has done yet.

I didn't make any proposal, sound or otherwise.  I tried to put together what we know and how much we still need to find out even for those who consider themselves "smarter than the average NJ voter."  Like I've been saying, there aren't any "great ideas."  There are only "less bad" ones.

I don't know how many people are going to drive to Delaware to save 7.4 cents per gallon in fuel tax and the privilege to pump their own gas.  Additionally, the difference in fuel taxes is not the sole determinant of prices.  I am not sure about the relative savings of the Turnpike gas stations versus the Delaware service plaza.

Finally, realism is realism whether it is on fiscal issues that some posters show virtually no understanding about or social issues which some posters want to pontificate about with no understanding about how to get anything done.



[ Parent ]
I Wish... (4.00 / 2)
...both of you could find a way to chill out.

Each of us here has a part to play and a contribution to make. 

We're all flawed humans and have all, at times, been wholes of asses. 

Yet the fact remains (I believe) that we're in the same book (if not always on the same page ;-) when it comes to opposing the Bush agendas and the agendas of the machines/bosses in/of our own Democratic party.

Creed's sparkling talents/assets are obvious; let's positively exploit/include them as part of the mix it will take to turn things around in NJ politics/governance.

Rachael'sdad has frequently given us astute, piercing, intelligent and sensible analysis rooted in common sense and compassion....obviously, also "part of the mix it will take to turn things around in NJ politics/governance."

Believe me, I understand how difficult it can be to bear the prideful egoism of other people (even more difficult is Seeing/bearing our own!)  ...but the stakes here are too high for us to be able to afford the luxury of indulging our subjective states.

Anyone who knows me, or has been reading my stuff here from the beginning, knows that I am speaking as much to my self as to anyone else. 

We're all in the same boat.  We/I need to find ways to work and struggle together so that the fruits of our efforts might become "part of the mix it will take to turn things around in NJ politics/governance."

 


[ Parent ]
I think (0.00 / 0)
Creed and R's D should get a room together.

I fact, last year I think I urged them to get married or civil unionized.

Egad! People say feminists have no sense of humor.

Lighten up guys!


[ Parent ]
utilization question (0.00 / 1)
I don't think that anyone is going to drive out of their way to buy gas in Delaware.

My point had more to do with people (mostly truck drivers, but there are probably others) who drive through NJ regularly and might fill their tanks in Delaware or New York if there isn't a price incentive to do so in NJ.

There is a place for realism in fiscal matters, because debates can often be more technical than emotional.  However, when applying realism to a social issue like marriage equality, there is a much bigger difference between Steven Goldstein's realism that determines that January 2008 is better than December 2007 and Jon Corzine's realism, which would have same-sex couples wait until December 2009.

Then there is Creed Pogue's realism, which is just a facade for being either openly hostile or completely insensitive to the LGBT community and its issues.


[ Parent ]
And where are the "courtesy police" now???? S.O.S. n/t (0.00 / 0)


[ Parent ]
Good work, Creed! And more... (0.00 / 0)
Creed, your analysis of the numbers is terrific, and your insights (as always) right on.  If the state folks know how much an increase in the gas tax would raise, they obviously have also done the math. 

Let's consider this, though: we in America pay less for gas than drivers in any other part of the world.  Raising the gas tax substantially might make Americans think about how much they're consuming and how much less it would cost for them to take mass transit.  And it would help keep carbon emissions down, too.

Just a thought...
 

"Do what you can, with what you have, where you are."  (Teddy Roosevelt)


Are the tolls for trucks going to rise as much as for cars? (4.00 / 2)
I'd hate to see more north bound trucks getting off the turnpike at exit 9 and ending up on River Rd on their way to 287N.  This is atleast partly a NIMBY response on my part, but if the truck tolls are increased significantly, decreased safety and increased maintenance of smaller roads around the state will be another cost.  The turnpike is designed and maintained for truck traffic.  It doesn't make sense to force them off it.  The numbers on how many trucks avoid the turnpike in response to what sort if toll hike would be nice to have too.

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