New Jersey, the State with the second lowest fuel tax in the Nation is likely to face increased fuel tax by 23 cents per gallon in order to rescue the depleted Transportation Trust Fund. The Fund is expected to be out of money on July 1. In a plan with bipartisan support, as well as some bipartisan opposition, the state legislature is close to a deal to raise the tax to kick start the transportation program with a $2 billion a year infrastructure plan.
New Jersey has not raised the gas tax since 1988 so this is both a big deal and a long time coming. New Jersey’s infrastructure was recently given a D+ rating by the American Society of Civil Engineers with around 500 bridges being labeled structurally deficient. Clearly something had to be done and increasing fuel taxes seemed to be the best answer. Problem was, how to make a tax increase more palatable. After much horse trading between the State Senate, Assembly and Governor Christie, which included such ideas as reducing New Jersey’s estate tax, restructuring the state’s real estate tax formulas and the Earned Income Tax Credit, it seems the parties settled on this simple idea: reduce the state’s sales tax by a penny from 7% to 6%. This appears to be a good political compromise since both fuel taxes and sales taxes hit those with lower incomes the hardest.
But New Jersey’s recent actions reflect the conversations in statehouses across the country, and in Congress. The question on everyone’s minds is how will we come up with the money to maintain or improve our crumbling infrastructure. But really, the question should be how can we afford the continued neglect of our infrastructure? Infrastructure investing yields positive returns. Infrastructure projects not only put people to work, but they let businesses operate more efficiently. Having your drivers sit in traffic does not help your bottom line, not to mention damage from crumbling roads. The political and business communities talk about creating 21st century jobs but that is hard do that with neglected 20th century infrastructure.