Here's how the NJ gas tax will impact Rutgers students
For the first time since 1988, the New Jersey Senate and Assembly voted to increase the state's gas tax — this time, it's by 23 cents and begins on Nov. 1.
Gov. Chris Christie (R-N.J.) raised the gas tax to replenish the Transportation Trust Fund budget, which the state uses to repair and increase transportation infrastructure throughout the state. The bill also approved a sales tax reduction from 7 percent to 6.825 percent in 2017. The sales tax will drop further to 6.625 percent in 2018.
Earlier this summer, Christie halted construction on roughly 900 road projects because the TTF went bankrupt. But Piscataway Mayor Brian Wahler said those projects had already been paid for, and that the hole in the TTF would impact projects in 2017.
The same bill eliminated the estate tax and approved an Earned Income Tax credit for families making less than $20,000 every year. It also created provisions for veterans and retirees.
In total, the bill created roughly $1.249 billion in tax breaks or reductions over the next several years, NJ Advance Media reported.
But how will the decision impact student commuters?
Jack Skydel, an adjunct professor in the Department of Economics, said he gas tax is going to add $150 to $200 to the budget of gas for every person, and a student living on a tight budget will give up a bigger percentage of income.
“One side of it is that you’re using roads and have to pay for it, but the other side is that lower income people have to give up a higher percentage of their income than upper income people to pay for that privilege,” he said.
Jack Skydel said the tax did not come as a surprise since there had been discussions around it over the past several months.
“The tax wasn’t totally unexpected. The state has a bunch of money specifically for roads and bridges and for a whole bunch of reasons, they ran out of money. And so they had to do something,” he said.
Skydel said after discussion, the governor and the legislature of New Jersey decided to raise the excise tax.
Pranav Chaudhry, a School of Arts and Sciences sophomore, said the tax will affect him, but not as much as it might impact other people.
“Since I have a place where I can work, I kind of stay on campus until really late, like 1 or 2 a.m. before driving home. Some nights my friends let me stay over, and it’s useful for my early morning classes," he said. "(At the same time), I’ll have less money to spend on games and other disposable stuff."
Deblina Mukherjee, a School of Arts and Sciences sophomore, said she was not aware of the increased gas tax that will come.
“I pay my own gas, and it will definitely affect my commute and income,” she said.
When looking at income levels, Skydel said the difference in driving is not much. The tax is more likely to affect people who have low incomes rather than people with higher incomes.
Most residents drive about the same distance every year — wealthier people do not drive more than middle-class citizens, he said. This means that an increase in the gas tax will take a lesser percent of a rich person's income than a relatively poorer person.
“If I take $200 away from a person with a $200,000 income, that’s just 1 percent of their income. Somebody who is making 10 times as much, that would work out to be 1/10 of 1 percent of their income," he said. "So a tax like this actually falls more heavily on lower income people, which by-and-large includes students.”
This type of tax is called a regressive tax, and may cost residents three or four nights of entertainment since that money now has to be dedicated to paying for gas, he said.
Skydel said the state's lowering of the sales tax might not have as much of an impact on residents as the gas tax will.
“A lower sales tax probably isn’t going to benefit those lower income people that much. And why I say that is because you know as a consumer many items aren’t even subject to sales tax,” he said.
Skydel said upper income people will get the benefit of the lowered sales tax because they are spending money on luxury items, holidays and entertainment services for which they now have to pay less tax.
A number of people on college campuses are concerned about the environment, and he said this could create more a provocative view about the tax.
“In general, driving cars and trucks contribute all sorts of negative effects to the environment. One of the hypothetical questions we could ask is, why shouldn’t we have a very big tax on gasoline like in European countries?" he said.
Sanjana Chandrasekharan is a School of Arts and Sciences sophomore majoring in political science. She is a staff writer for The Daily Targum.