Home>Opinion>Why New Jerseyans Should Be Especially Wary of a 25-Cent Federal Gas Tax

Why New Jerseyans Should Be Especially Wary of a 25-Cent Federal Gas Tax

By Erica Jedynak, March 09 2018 4:21 pm

Weeks after enacting the biggest tax reform package in a generation, some in Washington, D.C., are already back to their old habits and looking to raise federal gas taxes by as much as 25 cents a gallon. They claim the proposed tax is needed to help pay for a massive $1.5 trillion infrastructure plan.

Coming on the heels of a recent 23 cent gas tax hike in the Garden State, the federal levy would result in New Jerseyans paying 81 cents per gallon in gas taxes every time we fill up.

According to a new study, the average New Jersey households could expect to pay as much as $317.19 more a year for gas if a 25 cents-a-gallon gas tax increase is enacted. That’s less money to save, invest or spend as you and your family see fit.

Of course, it’s not just drivers who would suffer under a higher gas tax hike.

Research also tells us that raising the gas tax would drive up the costs of transporting goods on our nation’s roadways. Food prices increasing by 4.4 percent from January 2011 to January 2012 during the same period gas prices rose by 9.7 percent.

Gas tax supporters claim that raising taxes on the American people is necessary because we haven’t raised the federal gas tax since 1993. But that is only half the story.

The federal gas tax more than quadrupled from 4 cents to 18.4 cents a gallon from 1983 to 1993. And since 1993, 40 states have raised their own state motor vehicle fuel taxes to meet their own infrastructure needs. New Jersey enacted a 23-cent increase in 2016. As a result, we went from having the second lowest gas tax in the country after Alaska, to the sixth highest.

Now they want us to pay more?

The problem is not that the federal government isn’t collecting enough money from the gas tax. The problem is that a big chunk of the Highway Trust Fund is not being used for its intended purpose of improving mobility, reducing congestion and increasing safety on our nation’s interstate highways. Instead, around 28 percent is being diverted to pay for things totally unrelated to our nation’s roads and bridges such as ferryboats, pedestrian trails, vegetation management and even squirrel sanctuaries.

In the real world, you would need to demonstrate that you are spending money budgeted for its intended purpose before asking for more — but not in Washington, D.C.

Besides better prioritizing transportation dollars, policymakers could also consider reducing the regulatory gridlock that adds to long wait times before projects become shovel ready. These delays are more than a mere inconvenience. They also add to the eventual cost that is passed on to the taxpayer.

Thankfully, policymakers are considering doing away with some of these unnecessary regulations as part of a transportation and infrastructure overhaul. This is a good start, but they need to start with scrapping the idea of raising the federal gas tax.

As lawmakers continue negotiations, they must remember that the road to higher taxes and wasteful spending is often paved with good intentions. And as we make investments into our infrastructure, it must be done right!

Erica Jedynak is the New Jersey state director for Americans for Prosperity.

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