A new report put out Thursday by liberal think tank New Jersey Policy Perspective argues that in order for its economy to remain competitive, the state should increase funding for its Transportation Trust Fund by 25 percent over the next 10 years, from $16 billion currently to $20 billion.
NJPP recommends that rather than increase the per-gallon tax, the state should extend its 7 percent sales tax to gas purchases, thus tying prices automatically to inflation and value over time. Doing so at the current average price of roughly $3.50 per-gallon would yield over $1.2 billion annually and would equate to a per-gallon increase of more than 24 cents, according to NJPP figures.
"It's no surprise that funding for the Transportation Trust Fund has stagnated since New Jersey's leaders have been unwilling to raise additional money to support this important investment," NJPP budget and tax analyst David Rousseau said. "Policymakers haven't increased the tax on gas in nearly 25 years and, as a result, New Jersey's gas tax is now the second-lowest in the nation and the state is running out of options to fund vital transportation needs."
The proposed spending plan would average out to roughly $2 billion per year and would cost the state anywhere from $1 billion to $1.5 billion each year, NJPP estimates. The report also figures in that $20 billion of in-state money would be met with nearly $20 billion in federal funding.
"New Jersey's greatest competitive advantage is its location in the middle of the world's largest market next to New York and Philadelphia," NJPP President Gordon MacInnes said. "This advantage disappears if we do not maintain and modernize our highways, bridges, trains and buses. We must halt the deception that we can do this without cost."
ALSO ON NJBIZ: