Fueling a gas-tax debate

Low gas tax in NJ allows fuel to be much cheaper than other states.

By: Hank Kalet
   I gassed up my car on Route 1 on Sunday and was pleasantly surprised.
   It cost me just $47 — at $2.89 a gallon.
   I’m not being sarcastic. Having spent a week in North Carolina — where some gas stations were advertising prices as high as $3.25 — and having watched the gas prices rise as we moved south through Delaware, Maryland, Virginia and the Tar Heel state, I can tell you prices are far higher elsewhere.
   Leaving the Outer Banks on Sunday to head home, we stopped at a 7-Eleven to fuel up the van we rented for the trip, paying $2.99 a gallon for regular gas. And we considered ourselves lucky — it was the only gas station we saw below $3 a gallon until we got into Delaware and one of the few charging less than $3.10.
   Are New Jersey drivers getting off cheaply? It appears so.
   The statistics bear this out. While the national average for a gallon of regular was $3.201 on Tuesday, according to AAA’s Daily Fuel Gauge Report, New Jersey drivers were paying $2.962 — the lowest price in the nation. (South Carolina is the only other state in the nation in which the average cost per gallon for regular gas was below $3.)
   One reason for this — among many — is that we pay the third lowest gas tax in the nation, at 14.5 cents per gallon (a 10.5-cent excise tax and a 4.5-cent Petroleum Products Gross Receipts Tax). To put this in perspective, the national average is 27.4 cents per gallon of gas.
   Many readers will view these statistics as an argument against gasoline taxes. But the reality is that the state’s drivers are not paying enough in gas taxes — and the nearly empty Transportation Trust Fund is Exhibit A in favor of an increased levy.
   The fund, which is used to build and maintain roads, bridges, tunnels and mass-transit facilities, ran out of money in 2006. It only avoided bankruptcy, as George Amick pointed out in The Times of Trenton on Monday, when Gov. Jon S. Corzine stretched out interest payments on existing debt adding another $6.4 billion to the tab — a move that pushed back the day of reckoning for four years.
   At the time, "the governor felt that the public wouldn’t stand for a gasoline tax hike on top of the extra sales tax penny he was seeking to help balance the state budget," Mr. Amick wrote. "After all, the voters can’t do anything about OPEC and Exxon, but they sure can punish politicians who displease them."
   The governor, however, has now started singing a different tune.
   While not proposing a gas-tax hike, he told the Associated Press on Monday that the state may need to increase gas taxes in the future to keep up with transportation needs.
   "It’s certainly something we have to take into consideration in regard to our transportation capital needs and financial needs for mass transit in particular, so we’ll review that," he said.
   It’s about time. Various think tanks and public agencies have been calling for a gas-tax hike for several years, ranging from a low of about 10 cents per gallon to as much as 15 cents, with revenue projections ranging from $450 million to more than a $1 billion.
   The new revenue stream would go a long way toward replenishing the state’s trust fund, potentially freeing up money for projects now viewed by the state as nonstarters — the widening of Route 1, for instance, or the removal of the remaining cut-throughs on Route 130.
   The increase would cause far less pain than might be expected. Someone who drives a car that gets 18 miles to the gallon and travels about 13,500 miles in a year would pay an extra $112.50 a year — less than $10 a month — if the gas tax were increased 15 cents. (A 10-cent hike would cost the same driver $75 more in taxes for the year). Drivers of smaller cars or those who travel fewer miles would pay less.
   And we’d still be paying far less than the national average for a gallon of gas and less than 35 other states, including New York.
   I wouldn’t call it a bargain. But considering that New Jersey is among the wealthiest states in the country, I think the hike is something we can afford.
   In fact, it’s probably something we can’t afford not to do.
Hank Kalet is managing editor of the South Brunswick Post and The Cranbury Press. His e-mail is [email protected] and his blog, Channel Surfing, can be found at www.kaletblog.com.