My gas tax is going up—finally!

Only one day after the tragic wreck of a New Jersey Transit commuter train at Hoboken Terminal came some positive news about transportation in the state, specifically, how it’s funded. Unfortunately, the news got lost in the media circus surrounding the accident, and went mostly unnoticed. But as I think you’ll see, this development should have a positive effect on safety, in the long-term.

Praise the Lord and hand me the fuel nozzle! The motor fuels tax I pay in my home state of New Jersey for filling my two Pontiacs with premium unleaded is going up 23 cents a gallon, and I’m thoroughly elated! Hats off to New Jersey Gov. Chris Christie and the legislature! It’s about time you did something that actually makes sense.

I’m serious, folks. No sarcasm intended. You see, the gas tax funds New Jersey’s Transportation Trust Fund (TTF), which has been bankrupt for quite some time, with all revenue going toward debt service. The consequences have been crumbling roads and bridges, and inadequate funding (translation: increasing but not keeping up with rising costs) for New Jersey Transit, operator of the nation’s third-largest regional/commuter rail system as well as light rail and buses. Demand for public transportation has largely been on the rise, and NJ Transit has been hard-pressed to keep up with it. Sorely needed expansion and state-of-good-repair rail projects have suffered. The agency has had little choice but to divert roughly $300-$400 million in capital funding annually since 2012 to its operating budget, according to the Star Ledger, which also claimed that NJT’s rail fleet MDBF (mean distance between failures) has decreased to 89,700 miles from 120,600 in 2012.

Meanwhile, fares have gone up, and service has been cut back on some lines. Those fare increases have not been imposed in a sensible manner—small, incremental increases every year or so, based on the cost of living or other factor. Instead, New Jersey’s beleaguered commuters have had to deal with huge increases every few years, in between which times the state’s politicians, starting with the governor, proudly proclaim, with forced smiles, “No fare increases! Isn’t that wonderful!”

It isn’t wonderful. It’s dumb, shortsighted, and loaded with onerous long-term consequences. Among them have been a bleed-off of talent at the management level, with key personnel (trainmasters, road foremen, mechanical supervisors, training staff, etc.) going eight years without a pay raise, bolting for higher salaries across the Hudson River at the New York MTA (LIRR and Metro-North). Add to that agreement employees who worked without a contract renewal for roughly five years, and you have a situation that potentially impacts safety.

By the way, the decision to deny basic pay raises comes not from within NJ Transit. It comes deep from within the bowels of the Statehouse in Trenton, which has been chronically afflicted by irritable bowel syndrome, compounded by a governor who spent an inordinate amount of time running a pointless Presidential campaign.

I’m not saying that there is a direct correlation among the TTF’s past troubles, basic cost-of-living pay increases and the Sept. 29 Hoboken Terminal wreck. Rather, everything is tied together in what I call an “un-virtuous circle.” Cut off or decrease even one source of essential nutrition, and the entire body begins to break down.

Apply this starvation scenario to the gas tax (“Read my lips. No new taxes”), and you have a recipe for systemic rot, which becomes yet another reason for Democrats and Republicans in Trenton to argue like spoiled little kids and play the blame game.

New Jersey’s gas tax—up until now the second-lowest in the nation—hasn’t increased for purely political reasons since 1988. That’s 28 years. This in a state that’s been dubbed (among other things) the “crossroads of the nation.” Incredible. But understand that, to most politicians, especially those up for re-election, any sort of tax increase is political suicide, and God forbid they should do what’s tough but necessary.

Most voters don’t get it, either: “I don’t have children in my town’s public schools. Why should I pay school taxes? I don’t use public transportation. Why should I pay higher taxes to fund New Jersey Transit?” It never ends.

Well folks, the time finally arrived in my home state for the politicians to take off their blinders and face reality. All other means of shoring up the chronically ill TTF—creative refinancing, borrowing from Peter to pay Paul—have been exhausted. Somebody’s got to pay, and it’s going to be the users.

Which brings me back to the “crossroads of the nation.” You see, many motorists, and many big-rig truckers, don’t drive in New Jersey as much as they drive through it, causing wear and tear on major arteries like the New Jersey Turnpike. You wanna drive through my state? You think New Jersey is just the Turnpike and a bunch of chemical plants? OK fine, but you’re gonna pay your fair share, dammit.

And so we finally have an agreement in Trenton, at the Statehouse, a contentious place if there ever was one, reauthorizing the TTF at $2 billion a year for the next eight years, for less than 25 cents per gallon of gas. Sept. 30, the day the agreement was announced, should be declared a state holiday.

However, all may not be as rosy as it may appear, though it is definitely an improvement. According to an editorial in the Star Ledger (which, for the record, has been overly critical of NJ Transit, in my opinion, and overtly hostile to the governor), “Under the new bill, revenues allocated to the TTF are fixed at just over $2.1 billion per year for the next eight years. Spending under the plan, however, starts at around $3.4 billion in its first year and rises to almost $4 billion by 2024. Spending includes debt service on the old outstanding debt, which gets paid under the new plan. Since the new plan calls for the fund to spend more than its income, the difference must be made up with new borrowing.

“Every year, the fund is scheduled to borrow an additional $1.5 billion, which forces spending to rise as additional debt service is added every year. The plan ends in 2024, but the legislative analysis talks in terms of the debt remaining outstanding until 2055. (That’s almost 40 years from now.) How can you have a ‘plan’ that is based on spending more than your income and borrowing the difference with no way of paying the money back? The total outstanding trust fund debt is a combination of the existing debt of $20 billion plus new borrowing less principal repayments already scheduled.

“Using data from the Transportation Trust Fund website, the outstanding debt in 2024 will be around $27.5 billion (this includes the new borrowing). There is no provision in the plan for repayment of this debt. We can only speculate how the debt will be repaid. Are New Jersey taxpayers expected to backstop the transportation debt, too? Or should we expect another gas tax hike in 2024? The new gas tax bill increases spending on transportation projects by $400 million to approximately $2 billion a year. Each year $500 million of these moneys will go to local and county projects. Some of these projects were previously paid and funded locally. Is this more ‘feeding at the trough?’ or a ‘shell game’ freeing up money in the general fund?”

I’ll reserve judgment for now. Nothing ever gets done in my state without someone crying “foul!”

Gov. Christie is calling this “the longest and largest reauthorization of the Transportation Trust Fund in its history,” which “when combined with federal government funds, more than $32 billion will be invested in infrastructure improvements and modernizations in the state during the next eight years. In order to pay for the reauthorization, the gas tax will increase 23 cents. The state has not seen a rise in the gas tax since 1988, but to soften the increase on citizens, the agreement also incorporates a series of tax breaks, such as a sales tax reduction and a phased-out elimination of the estate tax.”

The American Automobile Association has estimated that the additional 23 cents a gallon at the pump will cost the average driver about $170 more a year. At 37.5 cents a gallon, gas taxes in New Jersey will go from second-lowest in the U.S. to seventh-highest. As for me, I’m figuring roughly $3.75 each time I fuel the ’04 GTO or the ’69 Firebird 400 with 93 octane (and about $6 more if I throw in a bottle of STP 104 Octane Booster).

Of course, being who he is, Gov. Christie did need to blow his own horn, rather loudly, and take all the credit, as he is known to do:

“Months ago, I said I was willing to increase the gas tax if it represented tax fairness, and I’ve kept my word on that. While I have not authorized any other tax increase during my time as Governor, I’m authorizing this one because of the importance of the Transportation Trust Fund, the tax fairness that we’ve accomplished together and the compromise that we’ve reached, and because we need to responsibly finance this type of activity.”

You can add, “… and because my second and final term as Governor of this great state is coming to an end, and I don’t have to worry about re-election.”

If you’ve been reading my blogs and “From the Editor” columns in Railway Age, you’ve probably figured out that I have never been fond of Chris Christie. My opinion of him was cemented when he ousted Jim Weinstein from the Executive Director’s job at NJ Transit, making him and then Vice President and General Manager-Rail Operations Kevin O’Connor scapegoats for flooded and damaged rolling stock from Superstorm Sandy, and the chaos that ensued when thousands of people left the most boring, lopsided Super Bowl in history (Seattle Seahawks 43, Denver Broncos 8) early, and there were no trains waiting to whisk them away as they lamented over blowing big bucks on tickets and not staying home, where they could have changed TV channels.

I’m hoping NJT’s current VP and GM Rail Operations doesn’t suffer the same fate. The Hoboken incident is not his fault, and he shouldn’t have to take the blame for it. If he does, a lot of people in our industry are going to be very angry.

And oh yes, let’s not forget Christie’s earlier endorsement of the Republican Party’s perverse, racist, misogynistic, narcissistic, Napoleonic, bullying nutcase/jackass/tin-pot dictator/sociopath of a Presidential candidate. But that’s another story. If you care to revisit it, click HERE.