With gas tax revenues down, NJ considers another way to pay for infrastructure

BY Brenda Flanagan, Senior Correspondent |

It’s pothole season. East Orange Public Works officials deployed along Oraton Parkway to fill in several nasty roadway booby traps, while, back at the garage, Gov. Phil Murphy announced $161 million in Transportation Trust Fund aid for infrastructure projects in 537 towns across the state. East Orange got $1.2 million.

“We got almost 30 to 40 streets that we have to do. This will really aid us in getting those streets done,” East Orange Mayor Ted Green said.

Drivers pay for it at the pump. When they fill ‘er up, New Jersey’s gas tax fills the Transportation Trust Fund. But tax revenues look like they’re falling short of this year’s $1.5 billion highway fuels revenue target, the state treasurer said in budget hearings this week.

The bad news: a shortfall could trigger yet another gas tax hike to make up the difference, unless people buy lots more Jersey gas over the next few months. It’s a trend.

“The reality of the world we’re living in is that gas consumption will go down over time, just with the advent of hybrid and electric vehicles, and the change of habits by the next generation,” Murphy said.

Which would only accelerate the rise in Jersey’s gas tax. It went up 4.3 cents last October to more than 41 cents a gallon. That’s why New Jersey — and New York — are part of an East Coast coalition that’s exploring another way to pay: a user fee, based not on the gas you buy, but rather, on the number of miles you drive.

“We may need to think of a different mousetrap to capture the movement around this state, and there are some other states looking at that, in terms of mileage fees, as opposed to gas consumption fees,” Murphy said.

The I-95 Corridor Coalition will soon run a mileage fee program including North Carolina, Pennsylvania, Virginia, Delaware and New Jersey.

“To see, is a mileage-based usage fee even technically feasible? Is it something that we can we go to as a replacement for the fuel tax,” said I-9 Corridor Coalition Executive Director Patricia Hendren.

Study participants would get a device they plug into their car’s data port, or use smartphones, to measure miles driven and then they get a bill. In 2015, Oregon launched a mileage fee program that charges 1 1/2 cents per mile, and participants there get gas tax refunds. It’s a different concept — one Jersey will undoubtedly consider — with more electric vehicles on the road.

“To treat all, you know, drivers equally is something we definitely have to look at, because I was talking Sen. Oroho about it the other day. It’s just not, it’s not fair, you know, because why am I being taxed, and you’re not?” said Senate President Steve Sweeney.

“I’d take a look at a plan as long as you reduce the gas tax,” said Republican leader Assemblyman Jon Bramnick. “It’s the first I’ve heard of it. But I’m not going to support any type of user fee, at this point.”

The state treasurer will ultimately decide if the state’s gas tax will go up this year. The decision will come in August, after the summer driving season.