NJ Gas Tax and Ballot Measure 2 ?>

NJ Gas Tax and Ballot Measure 2

The New Jersey Assembly voted to increase the motor fuel tax by 23 cents.  The governor has signed it.  It’s a done deal, effective 1 November.

On 8 November, NJ voters will be asked to vote to change the NJ Constitution to dedicate motor fuel revenue to the Transportation Trust Fund. That is a different question.  It will not affect what you pay at the pump.

I don’t want to see the price of gas go up any more than anyone else.  We need it, though, to put some cash back in the Transportation Trust Fund.

A YES vote allows the NJ Transportation Trust Fund to borrow more.  The TTF is already borrowed up to its statutory limit.  Despite the name “Trust Fund”, the TTF is a borrowing entity with bond debt of approximately $18 billion.  Under N.J.S.A. 27:1B-9(i) the TTF can only borrow more if it has constitutionally dedicated funds.  A YES vote gives the constitutional dedication.  New borrowing would start immediately.

How the ballot should read

CONSTITUTIONAL AMENDMENT TO DEDICATE ADDITIONAL REVENUES TO STATE TRANSPORTATION SYSTEM

Do you approve amending the Constitution to dedicate all revenue from the State motor fuels tax and petroleum products gross receipts tax to the Transportation Trust Fund? This amendment would provide that an additional three cents of the current motor fuels tax on diesel fuel, which is not dedicated for transportation purposes, be dedicated to the Transportation Trust Fund. In doing so, the entire State tax on diesel fuel would be used for transportation purposes. The entire State tax on gasoline is currently dedicated to the Transportation Trust Fund and used for transportation purposes. The amendment would also provide that all of the revenue from the current State tax on petroleum products gross receipts be dedicated to the Transportation Trust Fund. In doing so, the entire State tax on petroleum products gross receipts would be used for transportation purposes, including debt service.   This amendment does not change the current tax on motor fuels or petroleum products gross receipts.

INTERPRETIVE STATEMENT

This amendment would dedicate all of the revenue from the State tax on motor fuels to the Transportation Trust Fund. The current dedication is 10.5 cents per gallon on gasoline and diesel fuel. The amendment would include an additional three cents of the tax on diesel fuel that is not currently dedicated. The total revenue from the tax on motor fuels this fiscal year is estimated to be $541 million. The amendment also dedicates all of the revenue from the tax on gross receipts of the sale of petroleum products to the Transportation Trust Fund. The current minimum dedication is $200 million per year. This fiscal year, the revenue from the tax on gross receipts of the sale of petroleum products is estimated to be $215 million. The amendment does not change the current tax on motor fuels or petroleum products gross receipts.  The amendment allows the Transportation Trust Fund to issue additional bonds. The dedication to the Transportation Trust Fund ensures that the revenue is only used for transportation purposes.

I am in favor of increasing the gas tax to get road and mass transit projects working again.  I am opposed to additional borrowing.  My recommendation is to vote NO on Q2.

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