OCEANPORT, N.J. — The days of cheap gasoline officially came to an end in New Jersey on Tuesday, as drivers began paying 23 cents more a gallon to pay for infrastructure and road repair.
Drivers grumbled as they filled their cars, even as some accepted their fate.
“It may indeed be one of those necessary evils,” said Michael Amoroso, 60, who took advantage of the last day for cheap gas by filling up his Chevrolet Tahoe at P.E.P. Service Center in Oceanport, N.J. “We live in a society where we need infrastructure and as a society we make decisions to pay for those improvements.”
The controversial revenue package is meant to resuscitate the state’s bankrupt transportation trust fund and came hand-in-hand with a less than 1% cut in the state sales tax.
The tax hike — 23 cents a gallon on gasoline, 24 cents a gallon on diesel — is the first in more than a quarter century. The increase takes New Jersey from having the nation’s second-lowest gasoline tax to a tie for the sixth highest (with Connecticut.) It means that motorists, whose gasoline price averaged $2.04 a gallon on Monday, according to AAA Mid-Atlantic, will pay $2.27 a gallon on Tuesday.
Lou Franco, owner of P.E.P. Service Center, said he sold about 50% more gas than he did last Monday as drivers lined up to beat the tax hike. “People will be grumpy at first. No one likes an increase of any kind of tax at all,” Franco said, adding, “The average driver — maybe they’ll change their driving habits a little bit, but I doubt it. They still have to get to and from work and run their errands. It’s just going to be an increased burden on their own pocketbook.”
Franco said the tax will be toughest for small businesses, such as landscapers with a fleet of vehicles.
“It’s going to affect them the most,” he said.
Albino Gago, a masonry worker, said the increase will be difficult for the company he works for. He said J&N Mason Contractors operates 10 trucks, including the one he was filling up Monday.
“It’s terrible,” said Gago.
The owner of P.E.P. Service Center said small business owners will be most affected.
But even with the hike, New Jersey’s gasoline tax will still be lower than the neighboring states of Pennsylvania (13 cents) and New York (5 to 10 cents), said Sal Risalvato, executive director, New Jersey Gasoline, Convenience Store and Automotive Association. Delaware gas prices will languish far beneath New Jersey’s. But commuter traffic between New Jersey and Delaware is diluted enough that there probably won’t be an impact on New Jersey revenue, Risalvato said.
Risalvato said he has been preparing association members for the last two years about the inevitability of some kind of tax increase.
“We’ve just resigned ourselves that this is a bitter pill for us, but it could have been more,” he said.
The gasoline tax hike was the result of a deal between New Jersey Gov. Chris Christie and the Legislature to fund the bankrupt Transportation Trust Fund. In addition to hiking the gasoline tax, the plan would drop the sales tax from 7% to 6.625% — a drop of three-eighths of a cent. Tax exemptions on retirement income would increase, offering a tax break. Other tax relief is intended for veterans and the working poor.
The deal also eliminates New Jersey’s estate tax, which applies to anyone leaving behind assets of more than $675,000.
Under the transportation plan outlined by Christie, $2 billion would be devoted each year to the Transportation Trust Fund. The gas tax would produce around $1.2 billion of that yearly revenue, and the state would borrow the remaining $800 million.
The federal government would match those funds dollar-for-dollar, for a total investment of $32 billion over eight years.
Supporters said the increase will provide a stable source of funding for both the New Jersey Department of Transportation and NJ Transit for the next eight years.
“In addition to providing funds for necessary road and bridge projects, the bill increases the amount of local aid to help counties and municipalities advance a greater number of road, bridge, safety, and quality-of-life improvement projects without burdening local property taxpayers,” said Steve Schapiro, communications director for the state Department of Transportation.
Even as the gas hike takes effect, that doesn’t mean the political fight is over. The state GOP mounted an offensive against the Christie-approved tax hike, and Lt. Gov. Kim Guadagno lent her voice to the revolt, bucking the position of her two-time ballot partner. Two Republican state senators introduced legislation to repeal the tax; while another Republican state senator has intimated that there could be a constitutional basis for a legal challenge to the tax hike.
>There were reports of long lines at gas stations across New Jersey as drivers waited for their last chance at cheaper gasoline. At P.E.P. Service Center in Oceanport, drivers said they were weary of the coming hit to their wallets, but conceded road improvements were necessary.
“It’s one of those things where they need to fix the roads and it’s probably a good way to get money,” said Tom Welsh, 21, of Oceanport. He said his father let him know to get a quick fill-up before the increase Tuesday.
Welsh figured the increase won’t have much impact on his budget, noting that gas remains much cheaper than the $3 or $4 per gallon just a few years ago.
“As long as it doesn’t go up to that, I’ll be happy,” he said.
Contributing: Mike Davis and Michael Diamond, Asbury Park (N.J.) Press; the Associated Press. Follow Andrew Ford and Alex N. Gecan on Twitter: @AndrewFordNews and @GeeksterTweets
Asbury Park (N.J.) Press