Infrastructure ‘Crisis’ May Compel New Jersey to Finally Raise Gas Tax

Prices posted at a filling station near the Lincoln Tunnel this week. A confluence of factors has increased the chances that New Jersey lawmakers and Gov. Chris Christie will reach a deal on increasing the state’s gas tax.
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Amid mounting alarm over how to pay for repairs to New Jersey’s roads and bridges, state lawmakers are lining up behind a potential solution once considered politically unthinkable: raising the state’s famously low gas tax.

A new proposal from leading Democrats is forcing a showdown with Gov. Chris Christie, a Republican who has resisted calls to increase prices at the pump even as the state’s transportation trust fund is set to run out of money at the end of the month. Under the proposal, the tax could rise by about 23 cents a gallon, bringing it closer to what neighboring states collect.

The fate of New Jersey’s dwindling transportation funding has been entangled in recent years with Mr. Christie’s political ambitions. Even as the state’s bridges and roads are falling apart and New Jersey Transit is struggling with a series of financial problems, he has avoided tackling the issue.

But state lawmakers now face a confluence of factors that could make an increase possible: a pressing deadline, gas prices hovering near $2 a gallon and growing contempt in New Jersey for Mr. Christie, whose office recently denied a report that the governor had become a McDonald’s-fetching “manservant” for Donald J. Trump, the presumptive Republican presidential nominee.

“We are very much in crisis if this thing shuts down,” Stephen M. Sweeney, a Democrat and the State Senate president, said, referring to the transportation trust fund.

Other states are also struggling to finance the cost of repairing and expanding crucial infrastructure. Several, including Utah and Iowa, have raised their gas taxes, and some members of Congress have called for increasing the federal gas tax, which has remained the same since 1993.

The transportation funding proposal announced in New Jersey this month included a sweetener meant to attract Republican votes: the repeal of the state’s estate tax, which kicks in at a lower amount than in many other states.

Even with that concession, Mr. Christie, who has about a year and a half left in office, said he opposed the proposal. He described part of the plan that would increase transportation aid to counties and municipalities as a “payoff” by Democrats to local officials. But despite his characteristically blunt rhetoric, the governor appeared open to negotiation.

“There is a lot of work that needs to be done,” Mr. Christie told reporters last week. “There is a lot of show-me that has to be done. But as you know, at the end of any session, miracles happen.”

Several Republican lawmakers have already expressed support for the proposal. Democrats, who control both the Senate and the Assembly, hope to pull together enough votes to override a potential Christie veto.

“Now that the fund is set to become insolvent, you’ve really seen a considerable shift in public opinion, but also political will in the Legislature in terms of coming up with some kind of compromise solution,” said Brigid Callahan Harrison, a professor of political science and law at Montclair State University.

At 14.5 cents per gallon, New Jersey’s gas tax is the second-lowest in the country; the figure includes a 10.5-cent motor fuels tax that has not increased since 1988 and a 4-cent petroleum products tax first approved in 1990. The Democrats are proposing raising the tax to about 37.5 cents per gallon, still less than New York State’s gas tax.

New Jersey’s deteriorating infrastructure recently received a D-plus grade in a report by the American Society of Civil Engineers, which classified more than 550 of the state’s bridges as “structurally deficient” and in need of major repairs.

Over the last few years, state transportation officials have closed several bridges for emergency repairs, including the Route 206 bridge in Princeton in February when a wall collapsed. After engineers found cracks in the stone arches of the bridge, which dates to 1792, more extensive repairs were planned for later this year.

New Jersey Transit, which runs the state’s passenger rail and bus lines, has been plagued by problems and now has a $46 million budget gap. Riders have been frustrated by delays and fare increases. Rail workers nearly went on strike this year, and two major unions are in negotiations that could still result in a strike.

New Jersey is lagging as other states in the region plan major investments in their infrastructure, said Mr. Sweeney, who may run for governor next year. ( Mr. Christie is prevented by term limits from seeking another term.) He cited New York and Connecticut; leaders in both states have said they want to spend $100 billion on infrastructure plans.

The gas tax proposal would allow the state to raise about $20 billion over 10 years, Mr. Sweeney said. As part of the deal, which includes several tax cuts, the estate tax that residents pay when they inherit money would be phased out by the end of 2019.

Lawmakers from both parties have criticized elements of the plan. Some Republicans oppose any gas tax increase, while some Democrats say that eliminating the estate tax would remove an important source of revenue and create its own fiscal challenges.

“When I’m being criticized by Democrats and Republicans — when you’re criticized by both, you’re usually in a good spot,” Mr. Sweeney said.

The authorization for the transportation trust fund, which pays for road, bridge and mass transit projects, expires June 30. The state Transportation Department would continue to receive federal funding, and work already underway would continue, said Steve Schapiro, a spokesman for the department. But new state-funded projects could not be started.

As Democrats seek votes outside their party, the gas-tax debate highlights a growing fissure among the state’s Republicans. A vote by Republican lawmakers to override a Christie veto would be the first rebuke in both chambers of a once-popular governor who had buoyed his party’s fortunes in a state that leans Democratic.

Mr. Christie’s approval rating has dropped to 27 percent in New Jersey amid his travels outside the state for his presidential campaign and now for Mr. Trump. In September, two of his former allies are scheduled to go on trial in the George Washington Bridge lane-closing scandal that has marred the governor’s second term.

At the same time, the jockeying to succeed him has already started. Philip D. Murphy, a former ambassador to Germany who announced that he would run for governor as a Democrat, and Steven Fulop of Jersey City, a Democrat who is expected to run, have said they generally support the idea of increasing the gas tax.

Vincent Prieto, a Democrat who serves as Assembly speaker, said there were parts of the plan he found distasteful, but that it was time for a compromise.

“Everybody doesn’t love everything in it,” he said, “but everybody can live with the final product.”

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