Local Lawmakers Seek Gas Tax Hike

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STATE – While a projected $10.5 billion structural deficit in next year’s state budget has gotten a lot of attention recently, it is not the only financial problem facing New Jersey on July 1, 2011.

By the beginning of next fiscal year, New Jersey’s Transportation Trust Fund is expected to be out of money to finance projects — all of the fund’s resources will be consumed to pay for past borrowing.


Gov. Christopher Christie’s short-term solution was to refinance existing bonds to take advantage of lower interest rates, which put off the problem until next year.

Two Union County Democrats have introduced bills that would provide additional tax revenue, financed by New Jersey motorists.

In January, state Sen. Ray Lesniak of Elizabeth introduced a bill that would increase New Jersey’s gas tax by two cents each year, reaching 22.5 cents per gallon in 2015.

In May, Assemblyman Joseph Cryan of Union proposed a bill that would raise the gas tax rate to 18.5 cents per gallon this year, 26.5 cents per gallon next year and 34.5 cents per gallon in 2012.

Future annual gas tax increases would be tied to the rate of inflation under Cryan’s proposal.

Both bills remain in their respective transportation committees, while Christie has been adamantly opposed to any increase in the gas tax rate.

New Jersey’s gasoline tax rate, among the lowest in the nation, has not been increased since the late 1980s.

The fund has been criticized because it allows government officials to borrow money at taxpayers’ expense without first gaining voter approval, as required by the state Constitution, and because all dedicated revenue for transportation is now used to pay interest on that debt instead.

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