NJ GOP questions toll plan

February 13, 2008 7:01:39 PM PST
Increasing the gas tax, hiking fees for driver's licenses and car registrations, applying the sales tax to gas and boosting a tax on expensive vehicles would help New Jersey solve fiscal woes, a new study has found.

The study by New Jersey Policy Perspective said the moves could raise $2.8 billion annually.

That would help lower Democratic Gov. Jon S. Corzine's proposed toll increases, which are designed to pay state debt and fund transportation work but have been criticized by legislators, including Republicans who on Wednesday questioned whether Corzine's plan was constitutional.

New Jersey has the nation's third lowest gas tax, at 14.5 cents per gallon, and it hasn't been increased since 1988, but Democratic senators have been weighing increasing the gas tax to ease Corzine's proposed toll increases.

NJPP, a liberal-leaning think tank, proposed:

- A 20-cent per gallon gas tax increase to generate $1 billion each year.

- Applying the sales tax to gasoline to raise $900 million a year.

- Doubling registration fees on new, smaller cars and tripling fees on larger cars to increase revenue by $480 million a year.

- Doubling drivers' license fees to $48 to raise $340 million a year.

- Increasing a state fee charged to cars costing $45,000 and more to generate about $145 million a year.

Corzine wants to pay at least half of $32 billion in state debt and fund transportation projects for 75 years by creating a nonprofit corporation to manage toll roads and borrow up to $38 billion.

To pay that money back, he wants to increase tolls 50 percent in 2010, 2014, 2018 and 2022. Those increases would include inflation adjustments and, after 2022, tolls would increase every four years until 2085 to reflect inflation.

The Atlantic City Expressway, Garden State Parkway and New Jersey Turnpike would be affected.

"Gov. Corzine welcomes alternatives that would make it possible to pay down debt, fund transportation efforts and stabilize state finances," Corzine spokeswoman Lilo Stainton said. "Thoughtful studies only add to that discussion"

NJPP President Jon Shure said toll increases could still be part of the solution.

"But we offer the gas tax and car-related fees as a way to raise money statewide, which tolls don't do," Shure said.

Republicans criticized the recomendations.

"The idea of raising taxes and fees on motorists to fund ever-expanding big government is as ridiculous as the idea of raising tolls for the same purpose," said Republican activist Steve Lonegan, who has been working to rally opposition to Corzine's plan.

Sen. Anthony Bucco, R-Morris, said NJPP's approach is wrong.

"New Jersey should be looking at ways to cut spending, not searching for ways to increase taxes," Bucco said.

Sal Risalvato, executive director of the New Jersey Gasoline-Convenience-Automotive Association, a statewide trade group representing 1,500 small businesses such as gas stations, decried a gas tax increase.

"Any tax increase would mean consumers will have less money to spend in the marketplace, hurting businesses and threatening job security for countless others," he said, instead backing major spending cuts.

Republicans, meanwhile, questioned whether the nonprofit corporation would violate a state constitutional clause that bars the Legislature from "granting to any corporation, association or individual any exclusive privilege, immunity or franchise."

Senate Minority Leader Tom Kean Jr. and Assembly Minority Leader Alex DeCroce asked nonpartisan legislative attorneys to decide whether it would constitutional.

"We already know that this plan is not fiscally prudent but now it appears the governor's proposal is not even constitutional," DeCroce said. "If that is the case it would be the final blow to this already troubled proposal."

But Stainton said the Attorney General's Office and outside attorneys have worked extensively on the governor's plan.

"And they are confident that the plan fully complies with the state Constitution," Stainton said.