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?