| Publications | Commentary | Newsletters | In the News | Press Releases |
 |
 |
April Fools Day has special meaning for mass transit riders in New Jersey this year. They pay 10 percent fare hikes that day while drivers of cars still get the closest thing to a free ride. But the joke isn't just on NJ Transit riders. In the end, we all pay a price for New Jersey's undercharging of motorists.
What New Jersey charges might sound like a good bargain, but the reality is that owners of the 6.4 million motor vehicles registered in the state do not provide enough revenue through taxes and fees to support the infrastructure they use. Consider these findings from Perspective on the Gas Tax and Car Registration Fees, a report released by New Jersey Policy Perspective:
-- At 10.5 cents per gallon ours is the nation's third lowest gas excise tax, yet we borrow increasing amounts for transportation construction and maintenance.
-- As cars grow bigger and do more damage to roads, New Jersey has actually lowered registration fees from a maximum of $93.50 to $73.50.
-- NJ Transit defended increasing fares in part on grounds that they hadn't gone up since 1991. By that logic alone a gas tax increase is long overdue: New Jersey's gas tax hasn't risen since 1998; all but four states have raised their gas tax since then.
-- On a per capita basis, New Jersey is third from the bottom in gas tax and registration collections. In the process, these artificially low prices contribute to the sprawl and congestion that come from over-reliance on cars. And, increasingly, those cars are big, heavy and inefficient. Consumer Reports found that 42 percent of the 176 new car models in 1999 weighed over 3,500 pounds and almost half were Sport Utility Vehicles, trucks or mini vans. In transportation, size matters: heavier vehicles cause more wear and tear on roads.
Our report made four recommendations to improve the situation.
Raise the gas tax by 10 cents a gallon, to 20.5 cents. This would bring the state an additional $450 million a year in revenue, and a gallon of gas here would still cost less than in New York, Connecticut or Pennsylvania.
Change registration fees to take into account a car's value as well as age and weight-and widen the differential between gas-guzzlers and more efficient cars. The five heaviest non commercial vehicles on the road, each at more than 5,400 pounds, are the Lexus LX470, Toyota Land Cruiser, Lincoln Navigator, Chevrolet Suburban and Cadillac Escalade. These vehicles get low gas mileage and have high prices, ranging from $25,675 for the basic Suburban to almost $56,000 for the LX470.
In New Jersey fees range only from $48 to register a Suzuki Swift valued at $9,000 to $73.50 for the behemoth LX470. In Iowa it costs $98 to register the same Suzuki and $582 for the LX470. In Iowa these fees include a variable for weight and value and fees decline as a vehicle ages. So the system reflects not only the damage a vehicle does to the road but also the owner's ability to pay. That's fair because automobile industry research shows that owners of the biggest vehicles have median annual household incomes ranging from $90,000 for the Suburban to $250,000 for the LX470.
Use a substantial portion of the revenue from increasing gas tax and registration fees to improve mass transit. Although high-income people in New Jersey use mass transit, safe and efficient public transportation is essential for lower income people for whom car ownership is less likely. Rutgers Professor John Pucher estimates that 80 percent of households with annual incomes under $15,000 either own no car or only one car while nearly 90 percent with incomes over $80,000 own two cars or more. We should be subsidizing more of the people for whom there is little choice instead of the other way around.
Create a safety net to help offset increases in gas tax and car registration fees. One cent per gallon should go to a new income tax credit for households with incomes under $30,000. Another penny should go to programs like the state Earned Income Tax Credit or childcare, in recognition of increased needs and the state's unwillingness to tap other resources such as the income tax.
A gas tax increase and additional car registration revenue would help New Jersey finance a first rate public transportation system, reduce over-reliance on automobiles and expand benefits to people most in need while calling on those most able to pay to contribute more. Getting there will take an honest discussion about how much driving costs in New Jersey, who should pay-and how much. Anything else would be, well, foolish.
Mary E. Forsberg is Senior Policy Analyst at New Jersey Policy Perspective. Her report is available here
| © 2008 New Jersey Policy Perspective |  |