HANSEN: Representatives must vote to raise gas tax
Opinions Column: Oh, the Places You'll Go
Well, the inevitable finally happened. After an embarrassing showing in New Hampshire, our absentee governor has ended his presidential campaign. But his work is far from over: From pensions, to Atlantic City to casino legislation, N.J. politics hasn’t been boring in his absence. But one issue looms large, at least in my mind — the gas tax.
In the fall, N.J. voters will decide whether to approve a constitutional amendment that would mandate that all funds from the state’s 13.5-cent fuel tax go to transportation projects. Currently, the majority of revenue already goes to the Transportation Trust Fund (TTF), which finances repair and construction, but around $40 million doesn’t. This would address that gap, but would also mandate that all funds from any tax increase would go to the TTF as well.
Voters should absolutely approve this measure. Absent a solution, the TTF will go broke this summer, leaving our already crumbling transit system in even worse shape. The $40 million won’t totally fix the problem, but it will help. But the amendment doesn’t go nearly far enough: The state needs to increase its gas tax. With a gas tax that ranks second-lowest in the nation, behind only Alaska, Trenton owes it to its residents to ensure that they can quickly and safely get around the state. Trenton also has a unique opportunity — voters are most likely to accept a new tax when prices are so low.
The one obstacle may be Gov. Christie (R-N.J.). At a town hall in New Hampshire, he said the gas tax wouldn’t be raised on his watch. But was this genuine, or political posturing? Regardless, a blanket refusal to increase the tax would be a mistake. Unlike an income tax, which has the sole goal of raising revenue, a gas tax actually has two purposes — raising revenue and changing incentives.
The first purpose is self-explanatory — people buy gas and the government raises money. The second is more complicated. People change their activities based on pricing, and the government can affect pricing using taxation. When taxes on cigarettes or alcohol increase, consumption decreases. But it works the other way — when prices decrease, people consume more. Indeed, the increase in driving as a result of declining fuel prices is likely responsible for a 9.3-percent increase in traffic deaths in 2015. By increasing the tax, N.J. drivers are likely to cut back.
But why should we discourage driving? Road congestion, an increase in wear and tear on roads and higher traffic deaths are all impacts of increased driving. Not only would a gas tax keep more drivers off the roads, but it would fund increased construction and maintenance to ensure that those who do drive can do so safely and quickly. The gas tax, then, could kill two birds with one stone — cutting down on the cause of the problem (increased driving) and mitigating the problem’s effects (wear and tear, congestion and deaths).
The political reality, of course, looks grim. It’s a tough sell to increase taxes, especially given public opinion. The Eagleton Institute of Politics found that only 37 percent of the public supports an increase, while 57 percent oppose it. This is despite the fact that 54 percent believe that not enough money is spent on roads. If they’re to get their wish for increased funding, Trenton will need to cut some sort of deal. Unfortunately, the options on the table aren’t especially appealing. Last year, Christie said he would consider an increase in the tax, as long as it included “tax fairness,” noting that the inheritance, estate and sales taxes would be the first areas to negotiate. Since then, some legislators have supported a bargain: An increase in the gas tax in exchange for a reduction or elimination of the inheritance and estate tax, which levies a tax on assets passed down after death.
This exchange is plainly regressive. A coalition of advocacy and labor groups that oppose the exchange noted that an elimination of the inheritance and estate taxes, which together generated $715 million in 2014, would affect only 10 percent of estates in New Jersey. That $715 million compares to the $540 million raised by the gas tax — meaning that unless the increase is dramatic, this deal could be a net loss for the state’s coffers. While a gas tax would affect the vast majority of New Jerseyans, an estate tax would affect only a few.
If this exchange can be avoided, it should be. The gas tax must be raised, but not at the expense of massive losses and tax inequity. Ultimately, it’s clear what should be done. Legislators should act with bravery, and vote for a tax despite its political implications. Voters should elect candidates that support an increase, and kick out the irresponsible politicians that would let N.J.’s infrastructure collapse. Our future depends on it.
Nick Hansen is a School of Arts and Sciences senior majoring in political science with a minor in history. His column, "Oh, the Places You'll Go," normally runs on alternate Tuesdays.
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