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Tuesday, August 12, 2008

Talk of gas tax hike likely this fall

Gov. Jon S. Corzine and state legislators will probably debate raising New Jersey’s gasoline tax sometime this fall, as they try and figure out a way to replenish some of the Garden State’s traffic infrastructure funding that could run out as early as 2011.

That's because New Jersey finds itself as one of the few states where gasoline tax revenues have actually increased, amid record-high gasoline prices that have caused an across-the-board spike in the cost of living for Americans.

It has been reported that state officials have discovered that motor fuels tax revenue unexpectedly jumped up by almost $500,000 during the first six months of 2008, despite the surge in the price of a gallon of gasoline.

Whether New Jerseyans are driving more or that out-of-staters are coming in to purchase gas, all it really means now is that the idea of increasing the state’s gas tax has actually regained some steam, because it no longer looks like the price spike in gas means reduced tax revenue.

New Jersey currently takes in 10.5 cents for every gallon of gasoline purchased, in addition to a 4-cent petroleum products gross receipts tax. Compare that 14.5-cent total with the more than 30 cents in tax collected by both New York and Pennsylvania.

Gasoline prices that surged above $4 a gallon have finally begun to come down as both the U.S. economy and the dollar have gained back some strength. The pain felt at the pump has been reduced, so that means that a small increase in the gas tax sometime in the near future probably won’t result in nearly as much outcry as it would have when gas prices remained below $3 a gallon.

Raising the tax would allow the state to generate some much-needed revenue, and it might actually serve as some incentive for people to drive less, reducing America’s reliance on foreign-generated, polluting fossil fuels.

Reliance on gasoline can’t go on forever, but while it does, why not use the sale of black gold to generate money to repair infrastructure and build and subsidize more mass transit.

That way, when all the gas and associated money dries up, there will be a viable transportation alternative that simply does not exist in the present.

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