Proposed N.J. gas tax hike clears first hurdle

Joe Hernandez, NewsWorks

A proposal to increase New Jersey's gas tax by about 23 cents cleared its first hurdle on Thursday, signalling support for raising a tax that has not increased in nearly 30 years.

The Assembly and Senate budget committees approved two bills related to the gas tax: one that would hike the gas tax and another aimed at offsetting that increase with other cost savings, such as an increase in the earned income tax credit and an elimination of the estate tax.

"No legislation is perfect," said Sen. Paul Sarlo, D-Bergen, one of the plan's sponsors, "but I've not seen one proposal from any member of the Legislature or any member of the public that could gather the necessary votes."

Supporters said the gas tax hike would raise $2 billion per year over the next decade for the Transportation Trust Fund, which is set to run out of money come July.

The American Society of Civil Engineers recently issued New Jersey two D-plus ratings for the quality of its roads and bridges, infrastructure that is funded by the TTF.

The dire state of the N.J.'s transportation system caused many advocates unlikely to rally around the bipartisan plan to support it, including Sal Risalvato, executive director of the New Jersey Gasoline-Convenience-Automotive Association.

"Anytime the two words 'gas' and 'tax' were ever put together, the hair would stand up on the back of my neck and I would become a very vocal, arrogant opponent," said Risalvato. "[But] I never offered a solution."

Gov. Chris Christie said he will not support the plan because it represents "tax unfairness."

Other critics, including Christina Renna, vice president of the Chamber of Commerce of Southern New Jersey, said a 23-cent gas tax hike would adversely affect drivers in the lower half of the state, where automobile travel is often a necessity.

"South Jersey is different economically, geographically, and demographically from the rest of the state," said Renna. "We don't have the mass transit options in place that other people do. We're far more reliant on passenger vehicles."

Drivers in New Jersey were paying about $2.12 a gallon Thursday.

The plan would also hike the tax on jet fuel, but it would amount to a steeper increase than drivers would pay per gallon of automobile gas. Airlines of America vice president Sean Williams said that will "devastate" the airline industry in New Jersey.

"I don't say that for hysteria or to be glib," he said. "A 25-fold tax increase is not something that businesses will be able to absorb or take lightly."

The bills now head to the full Assembly and Senate for approval.