Wednesday, April 14, 2010

From the Editor: Read my lips: No new gas tax?

Written by 

By William C. Vantuono, Editor

 

william-vantuono-web.jpgGas taxes aren’t the only way to fund public transportation programs, but it’s the route the State of New Jersey has taken, and up until now it’s worked pretty well. The state’s gas-tax-supported Transportation Trust Fund (TTF) is largely responsible for some of the most ambitious transit programs undertaken anywhere. Without it, where would New Jersey be?

 

The state is about to find out. As of 2011, the TTF will be bankrupt, with all revenue going toward debt service. Former Governor Jon Corzine temporarly averted a crisis a few years ago by restructuring the debt. Now, however, it may be time to face the music, and it’s not a pretty tune.

 

Despite the fact that New Jersey has the nation’s third-lowest gas tax-—a tax that hasn’t been raised since 1988 (which may be attributable in large part to the state’s heavy investment in public transportation)—the new administration of Governor Chris Christie is adopting that familiar old political refrain: “Tax-and-spend isn’t the way to go.”

 

What? Does this really make any sense  in a state that has been successfully taxing gasoline to pay for its transportation system?

 

New Jersey is faced with other problems, like a $300 million operating shortfall at New Jersey Transit. Like many North American transit agencies, NJT says it can handle that with service reductions and fare increases. But NJT is also considering, as Executive Director Jim Weinstein told me, delaying other important capital programs. Fortunately, one of them isn’t the new Trans-Hudson Express Tunnel (p. 38), a joint venture of NJT and the Port of Authority of New York  & New Jersey.

 

What about other critical capital programs? NJDOT Commissioner Jim Simpson (FTA Administrator under George W. Bush) told me that a gas tax increase is a “non-starter, off the table.” He also told me that “the state has a spending problem first when it comes to transportation infrastructure,” “there’s too much politics involved in infrastructure spending,” “if we doubled the gas tax we’d still have the same problem,” “we have to re-examine the entire capital program,” which the prior administration “bonded the heck out of,” and “we have to rein in spending.”

 

I’m sure that’s exactly what the people of New Jersey want to hear.

 

Sorry fellas, but it probably ain’t gonna work. How many times can you refinance debt? How are you supposed to maintain and expand your rail network, or fix your crumbling highways and bridges? Who’s supposed to pay for this? The federal government?

 

Yes—partially, at least. Simpson said SAFETEA-LU reauthorization should include “a new-starts megafund” and “more ability to flex highway funds over to transit.” A Republican appointee, he praised the Obama Administration for loosening some of the guidelines on federal funding, and the ability for states to flex money. He recommended public-private partnerships and design-build-operate-maintain projects—both good ideas—as a way to finance capital projects. NJT already has two very successful DBOMs, Hudson-Bergen Light Rail and the RiverLINE diesel interurban. He also said there are “too many federal programs. There should be just two categories, transit and highways.”

 

Based on his experience at FTA, Simpson said the FRA and FTA, to eliminate duplication, should be merged into a single agency called the Federal Railroad and Transit Administration (FRATA—sounds like a Starbucks drink). This agency would handle safety regulations and grant programs.

 

These are all good ideas, but the ones dealing with state transportation funding problems seem like a way to avoid the obvious, simplest solution: Raise the gas tax to where it needs to be. People may scream and yell that they shouldn’t be taxed for something they don’t use (“I don’t take the train. Why should I pay for it? I don’t have kids in public school. Why should I pay school taxes?”).

 

You may lose the next election, but at least you’ve done what’s neccesary for the greater good of your constituents. Isn’t that what being a public servant is all about?

 

Am I being disingenuous? Naïve?

 

Most people hate the word “tax.” It’s un-American, dammit! It’s one reason why we threw all that tea into Boston Harbor and sent King George III packing. Perhaps “gas tax” is a poor choice of words. Maybe it should be called a “transportation investment contribution.”

 

In any case, how much money are we talking about? Ten cents a gallon extra? I’m already paying close to $3.00 a gallon for premium. What’s another 10 cents—about $1.50 every time I fill up? What will I have to give up? Half a Grandé FRATA at Starbucks?

 

So, you drive to work? Why should you pay for my commuter train, you say? Here’s why: I’m not forced to drive, thereby freeing up valuable highway space that your car could be using. Yes, by you forking over that extra 10 cents a gallon, I won’t be staring into your rearview mirror in bumper-to-bumper traffic.

 

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William Vantuono

With Railway Age since 1992, Bill Vantuono has broadened and deepened the magazine's coverage of the technological revolution that is so swiftly changing the industry. He has also strengthened Railway Age's leadership position in industry affairs with the conferences he conducts on operating passenger trains on freight railroads and communications-based train control.