By Grant Smith, National News Writer
In looking for methods to fund an 8-year, $16 billion transportation program, Governor Chris Christie and the New Jersey Legislature have passed legislation to enact a 23-cent tax increase. The move took New Jersey’s gas tax from 49th highest in the nation to 6th highest according to CNBC.
The massive transportation funding program comes in response to the September 29 train crash at the NJ Transit Hoboken terminal that caused one civilian casualty and injured 114 more, as well as disabling one of the major junction stops of the third-busiest commuter railroad in the United States.
The lack of funding and adequate safety regulations are not a new problem for the beleaguered company, as they have been under audit by the Federal Railroad Administration since June of 2016 as reported by the New York Times; this audit was brought upon by a rising number of safety violations and a high leadership turnover rate.
The program and its resultant tax increase will bear a burden on all automobile commuters at an estimated $170 per year according to AAA. This number calls into question other sections of the bill, particularly offsetting cuts to estate, income, and sales taxes of 1.4 billion dollars.
The estate tax for one, which taxes the transfer of estates worth over $675,000, will see its minimum threshold raised to two million dollars in 2017 and then be eliminated altogether in 2018. According to the Bergen Record, the estate tax only applies to the wealthiest four percent of New Jerseyans.
These economically disproportionate benefits are not the only concerns raised by the legislation that increased the gas tax. Some analysts worry that while the gas tax itself might fund the transportation overhaul, the offsetting cuts could create a new problem by slashing state revenue below its already depleted current level.
While according to the nonpartisan Office of Legislative Services the gas tax will raise 1.2 billion dollars annually for the Transportation Trust Fund Authority, the cuts to income taxes and sales taxes along with the total elimination of the estate tax will cost New Jersey $170 million this year alone. The price tag for these cuts increases yearly, with figures of almost 1.3 billion dollars to be lost in 2020 and 1.4 billion dollars by 2022.
These concerns are to be confronted at the ballot box by New Jersey voters on November 8 as a new referendum is set to decide where the new gas tax revenue can be spent. The ballot question asks if voters want the funds raised to be exclusively spent on transportation projects, essentially creating a “lock box” of the newly generated revenue.
Many including Governor Christie himself have come out in favor of the new measure, while Lieutenant Governor Kim Guadagno, a possible 2017 candidate for governer, has broken from her boss in opposing the measure according to the Star-Ledger.
Guadagno insists that the state’s ability to borrow the money generated from the tax should not be restricted. The voters’ decision on November 8 will determine the future of the revenue that has angered drivers across the state.
Ironically, budgetary shortfalls incurred by other sections of the bill could very well end up being the destination of the gas tax revenue if it is not protected in the possible lock box.
A version of this article appeared in the Tuesday, November 8th print edition.
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