On October 1 we will experience a 22% increase in the automobile fuel tax, a rise of $0.093 per gallon of gas. This new level of taxation will place New Jersey in the top four states in the union for taxation rates on gasoline and diesel fuel. Just five years ago we had the lowest fuel tax rate in the continental United States, bettered only among the states by oil rich Alaska. Then the state tax on a gallon of gasoline stood at $0.143. On October 1 it will be $0.507, an increase in five years of 350%.
Don’t bother to check to see how your legislative representatives voted. They didn’t. They didn’t need to. Some taxes in New Jersey are now on autopilot. The state missed its revenue targets because we all drove less during a pandemic and because we were responding to a stay at home order issued by that same state. The result is an automatic increase in the gas tax rate. No vote necessary.
Automatic increases will be used elsewhere as well.
In May, the Turnpike Authority approved toll hikes on the Turnpike and the Parkway. Tolls on the Expressway will also increase. All of this is to go into effect in September, just weeks before the gas tax increase. On average tolls will rise 36% on the Turnpike, 27% on the Parkway and the increase on the Expressway will average out to $0.51. The South Jersey Transportation Authority said that the largest Expressway rate increase will be at Egg Harbor Plaza where the toll will move from $3 to $4.25.
This was all done in months that marked the height of the pandemic in the state. True public hearings on the actions were not possible, but substituted virtual hearings met the letter of the law.
Labor unions were strongly in favor of the action which officials say will finance a $24 billion capital improvement program. Governor Phil Murphy had the power to veto the increases or at least delay them, but he supported them instead.
Perhaps most importantly, future hikes in the tolls will be automatic, a product of indexing the tolls, even though how the indexing will work is not clear. Beginning in 2022, the rates can go up, automatically, as much as 3% per year.
Huge amounts of money can now be collected and directed to authority coffers without votes or public hearings.
In explaining the gas tax increases, state Treasurer Elizabeth Muoio said the rate increases were “beyond the control of the administration.” They were needed to be compliant with the 2016 law that set automatic increases in motion. Convenient. There are no triggers that lead to indexed or automatic decreases in rates, only increases.
In October, the Turnpike Authority had boasted that the 2020 budget would require no rate increases. By May, large increases were set to go into effect. In October, there was no hike in the state gas tax on the horizon. Now we are looking at a 22% increase.
What changed? The pandemic hit the state. A state ordered lockdown of the economy coupled with stay at home orders, reduced traffic, reducing gas tax revenues and toll collections. The answer? Hike taxes and rates to regain the revenue. What was not part of the answer was making adjustments to the capital programs.
This was not a mix of cost cutting and revenue enhancement. The weight was put on revenue enhancement. Does anyone believe that an eventual return to pre-COVID-19 driving volumes will result in a lowering of the increased rates? Of course not.
Everything is on autopilot and set only to increase rates when needed to maintain the revenue streams.
So economic recovery from the pandemic must occur in an environment were driving the state’s roads has become more expensive.
Visitors to Cape May County overwhelmingly come here by automobile. We draw most of our tourists from areas within driving distance of the county. These rate increases have just made it more expensive for visitors to come here for a short stay or a shoulder season event.
How have we arrived at a point where a tax increase or a toll hike no longer even requires officials to publically vote on the matter?
At the very least we need to tell our elected officials that we want automatic increases and indexed toll rates to be removed. If the state wants more of the people’s money, they must do it in the open, in public meetings, with full public comment opportunities. The individuals who occupy chairs on public highway authorities or seats in the legislature or the administration have to go on record with their votes and deal openly with the issues.
If they are not willing to do that, they need to go home.
