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Legislative
& Marketing Update
State Motor Fuels Tax Can Be Used For Economic Growth & Homeland
Security
Spending on transportation infrastructure projects provides a better
return on investment than perhaps any other government-funding program.
The most obvious benefits are in the form of new jobs, environmental
protections and upgrading, improved health and safety for commuters,
and economic growth and development.
But another, less recognized benefit of a strong transportation system
is its potential contribution to national security and homeland defense.
This, of course, has assumed renewed importance in light of the cowardly
terrorists attacks upon our country and provides even more reason
for maintaining our roadways and bridges in the highest state of readiness.
The Federal Aid Highway Act of 1956 – enacted during the height
of the Cold War – led to the creation of America's incomparable
Interstate Highway System. Former President Eisenhower and the Congress
rightfully believed that a world-class highway system was needed to
expedite the swift movement of military troops, equipment and personnel,
should our nation face the threat of invasion or other internal disruptions.
While no one can predict what lies ahead, the events of September
11th represent the most blatant and damaging attack against our homeland
ever perpetrated by an outside force. It showed, at the very least,
that our nation is more vulnerable than we previously thought. Every
step must be taken to ensure our future protection, and our ability
to respond to a crisis. In New Jersey, the importance of preparedness
is heightened by our status as a corridor state that links several
of our nation's most important commercial, financial, political and
cultural centers.
There has always been a direct link between investments in transportation
and our nation's ability to compete in the regional and global marketplaces.
Research shows that 35,000 jobs are created for every $1 Billion invested
in infrastructure construction. More than $4.4 Trillion worth of products
– or 72% of the total value of commodities shipped annually in
the U.S. – are transported via highways. That statistic is even
more impressive in New Jersey where 78% of goods are transported by
trucks and another 14% by courier services, which also rely on good
roadways.
There is a kind of "double inefficiency" at work when we
ignore roads. One is lost productivity, the other is the higher price
tag that occurs when repairs are finally undertaken. Congestion on
our highways alone costs the United States an estimated $100 Billion
a year. Indeed, the delays caused by congestion on bad roads may be
the single most limiting factor in the ability of American businesses
to improve productivity. In contrast, transportation construction
generates some $160 Billion a year in US economic activity and sustains
2.2 million American jobs.
New Jersey has the second highest number of licensed drivers per mile
of state roads – more than double the national average - and
has the most heavily traveled roadways in the nation, some 72% more
than the national average. Additionally, highway travel in New Jersey
is expected to increase by another 18% by the year 2010.
A report undertaken by the American Road and Transportation Builders
Association found a two for one public health return from investment
in transportation. The report estimates that every $1 Billion invested
by the public in government-financed road improvements since 1950
has helped prevent 1,400 premature deaths and 50,000 injuries, and
saved American society over $2 Billion on health care, insurance,
lost wages and productivity costs.
Given all of the benefits that derive from a sound transportation
system, it is clearly in the best interests of New Jersey to provide
a stable, constant source of funding to maintain an aggressive spending
program for infrastructure maintenance and improvements.
The state Transportation Trust Fund (TTF) and the federal Transportation
Efficiency Act (TEA-3) now serve as the primary sources of such funding.
For more than a decade, they have been the engine that has driven
New Jersey's economy, creating tens of thousands of jobs in the construction,
service and supply industries. But, both programs require periodic
renewal by the State Legislature and the Congress, and are subject
to political whims and grandstanding that could eventually neutralize
their effectiveness.
In addition, the lion's share of money now flowing into the TTF is
being used to payoff the program's bonded indebtedness, leaving precious
little to fund actual transportation projects. A June 2000 report
released by the head of the Rutgers University Transportation Policy
Institute called it a "shortsighted policy" to continue
borrowing millions of dollars without generating any new sources of
money to payoff the debt.
With this in mind, we believe it's time for New Jersey to enact a
dedicated increase in the state motor fuels tax to provide a steady
and reliable source of funding for highway and mass transit projects.
Several factors point to the gas tax as being the ideal funding mechanism
that New Jersey needs at this time:
• New Jersey has a $2 Billion backlog in funding needed for road
and bridge improvements and currently ranks as one of the 10 worst
states in the pavement condition of its major roadways. Some 39% of
the state's bridges have been found to be deficient, higher than the
national average of 31%
• New Jersey residents have always accepted the user tax
as an appropriate means of funding transportation needs. It has the
added advantage of forcing out-of-state motorists and commercial vehicles
to fund a large share (up to 40%) of maintenance and repair costs.
• New Jersey's current 10.5 cents a gallon gas tax has not been
increased since 1988 and is lower than the levy in 46 other states.
Even with a 10 cents increase in the tax, New Jersey would continue
to have one of the lowest rates in the nation, still considerably
lower than in neighboring states. For example, the gas tax is 39 cents
in Connecticut, 23.5 cents in Maryland, 23 cents in Delaware, 22.4
cents in New York, and 22.34 cents in Pennsylvania.
As one of the most highly urbanized states in the nation, with the
most heavily traveled roadways in the nation and a growing backlog
of needed repairs, it just doesn't make sense for New Jersey to have
one of the very lowest gas taxes in the nation. At this critical time
in our state's history, we must utilize every weapon in our arsenal
to feed economic growth, to maintain our competitive edge, and to
keep New Jersey in a heightened state of preparedness. The motor fuels
tax is a weapon in waiting that we should take advantage of to ensure
a strong and prosperous future for all of us.
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