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Re: Fulop proposes giant, regressive gas tax increase
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Home away from home
 
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If one accepts that we need to raise revenue as part of the budget equation, it's a no brainer. The gas tax is very low. On top of that we are a pass through state, so much of that tax gets paid by out of state residents. But it's a hot button issue because in this country we believe that cheap gas is an inalienable right.
I also believe, however, that New Jersey (and other states) have to move away from dedicated funds. Yes, there is an intuitive link between a gas tax and transportation funding, but having funds locked into specific funds or projects causes much of our budget problems to begin with. I say that even though I believe in the need for many of the programs that are supported by dedicated funding (specifically transportation and open space).
Posted on: 2016/5/25 18:15
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Re: Fulop proposes giant, regressive gas tax increase
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I went defensive about 3 months ago and moved the 401ks and the HSA in capital preservation accounts. My financial advisor is a lot less pessimistic than I am though. I think the issues of excessive debt are going to come to a head far sooner than my financial advisor does. Then again.. I thought the real estate bubble was going to burst in late 2004 / early 2005 at the latest. That crazy train stayed on the tracks a lot longer than I thought it would.
Posted on: 2016/5/25 16:31
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Re: Fulop proposes giant, regressive gas tax increase
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Don't you think that given market levels now, a 20% correction is pretty much guaranteed?
Posted on: 2016/5/25 16:07
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Re: Fulop proposes giant, regressive gas tax increase
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The State deferred pension payments even after raising taxes under McGreevey and Corzine. Even if the state made the payments, it would have only delayed the inevitable: The pension system is going to go broke. The payments are too generous and people are living too long. The pension system did OK when you retired at 65 in the private sector or 55 in the public sector, but most of the retirees dropped dead before age 70. That is different now. Case in point: my financial advisor assumes his clients will live to age 92 and tries to make sure the retirement money lasts that long. The age is not arbitrary, but is typical how long his clients are able to live now. The Federal Government back in the 1980s did something smart. They transitioned to a defined contribution plan called the THRIFT savings plan. The THRIFT plan is solvent. Sweeney more than a decade back tried to get NJ to do something similar, but got taken to the woodshed by the public service unions. Back in 2010 NJ's police, fire, and the teachers pension was only about 40% funded. Assuming a very generous 8% return on investment, the pensions were scheduled to be flat broke by 2019. I am not sure what the drop dead date now after the changes made during Christie's reign. I suspect though that if we get a 20% to 40% drop in the S&P 500, this will be the black swan event that will trigger pension defaults (Illinois will probably go first).
Posted on: 2016/5/25 15:51
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This is a perfect summary of the problem... elected officials never worry who pays the bills and it is the taxpayers who are always last on the list of considerations and always on the hook . This is why terms limits is truly the only option left to save the country from these scoundrels. If it happens at a local level, no big deal but state and federal level leads to situations like Venezuela.
[quote] Dolomiti wrote: As far as I know, those laws were passed like every other type of tax. It's a bit silly to proclaim that elected representatives passing laws is somehow deeply unfair to the taxpayer. [quote]
Posted on: 2016/5/24 17:50
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I don't think your are comparing apples to apples there. Having the government collect property taxes to buy housing would be like the government to collect gas taxes to buy cars. Government doesn't buy you a house or a car. However, it does manage the infrastructure to allow you to use both. Property tax: A tax on those who use city services to allow them to have a home such as police, fire, trash collection, etc. (leaving schools out of it for now). Fuel tax: A tax on those who utilize the roads, bridges, and tunnels. Sort of like tolls, but more comprehensive and efficient than trying to setup toll booths everywhere. Those who use the roads pay for them. Fuel taxes are the most fair and actually flexible means to funds transportation. Those who use the roads the most pay the most tax. Also, heavier vehicles (i.e. a truck with a 50klbs load) induces more wear and tear. However, fuel consumption per mile is largely a factor of weight, so the heavier vehicles, that do the most damage, pay more. If traffic and hence wear on the roads increases, so does the revenue from the fuel tax. NJ voters passed a law dedicated fuel taxes to fund transportation. It was passed overwhelmingly. The funding worked really well. The problem is that the legislature raised the piggy bank for non transportation costs. The problem wasn't that there was enough revenue.. the issue is with the money going to other places the voters of NJ did not intend.
Posted on: 2016/5/24 14:00
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As far as I know, those laws were passed like every other type of tax. It's a bit silly to proclaim that elected representatives passing laws is somehow deeply unfair to the taxpayer. Quote: Here is another about Massachusetts voters saying NO! Gas taxes are unpopular. An anti-tax group exploited that distaste, and got a tax hike shot down. As with so many other things, people want the services, but don't want to pay for it. Raise your hand if you're surprised. - - - - - MA had a fixed gas tax, meaning the tax hadn't been increased in over 20 years. And it's not a rate -- it's a fixed number, in their case 23.5 cents per gallon. (Now 26.5, as the referendum only rolled back the automatic increase.) With inflation, that means MA was collecting almost half as much in gas taxes as they did in 1996. The problem with fixed rates is that they don't get increased. Variable rates generally go up, depending on how they're configured and the price of gas. MA's gas tax proposal was not a "shell game." What they proposed is that the gas tax would be indexed for inflation, with a floor of 21.5 cents per gallon. The chances of hitting that floor are extremely small, as we'd substantial deflation. That's something we haven't seen since the 1930s; it gets less likely as the years go on; and would only happen in a massive economic downturn. I.e. if we experience 19% or greater deflation, gas taxes will be the least of our worries. Ironically, the new gas tax rate was left in place, and is higher than the proposed minimum, and is fixed. If a floor of 21.5 cents a gallon is a dirty trick, then why is perpetually paying 26.5 cents per gallon any better? I.e. hanging your ire on the proposed minimum gas tax is slightly ridiculous, and not what people disliked. They disliked the automatic increase, because they want functional highways but don't want to pay for them.
Posted on: 2016/5/24 13:51
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Nice source and I like how you start your comment by proclaiming "a majority of Americans" as if they support it. Did they get to vote on it? Here is another about Massachusetts voters saying NO!. This is a shell game ... notice the part where the legislature "capped" the tax rate in case the price of gas deflated. No problem letting tax rise with prices, but can't let it go down. https://ballotpedia.org/Massachusetts_ ... ncrease_Repeal_Initiative,_Question_1_(2014)
Posted on: 2016/5/24 11:44
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Trenton does not set property tax rates, other than trying to cap them the last few years to hold them to 2%.
Posted on: 2016/5/24 10:32
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Taxes have been 'lowered'? We're just about the highest taxed state in the USA.
Posted on: 2016/5/24 10:24
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Let me get this right. You are saying we don't pay enough tax in this state?
Posted on: 2016/5/24 5:33
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Crime rates have fallen almost every year for nearly 10 years. The number of homicides between 2006 and 2015 has averaged 22. Every other type of crime is trending down over roughly that period of time. Trenton sets property tax rates. What else ya got?
Posted on: 2016/5/24 3:29
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The majority of Americans live in states with variable gas taxes. CA, NY, PA, GA, FL, etc http://www.itep.org/pdf/variablerategastax0414.pdf
Posted on: 2016/5/24 3:18
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FYI, that's pretty much what Fulop recommends in the article.
Posted on: 2016/5/24 3:16
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I think the problem is with our governments short term thinking. Without firewalls between funds they raid whatever piggy bank they can to put out budget fires, placate restive unions or feed ideologies like "no new taxes". This is how both our state's physical and financial infrastructure came to be rotting.
Posted on: 2016/5/24 2:47
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Home away from home
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MDM - Why should gas taxes have to be used to fund transportation? That's like saying property taxes must be used to build housing.
Robin.
Posted on: 2016/5/24 2:38
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would pensions even be a problem if taxes had not been lowered by previous governors. government has legitimate expenses, it is time for people to realize that...ask the republicans in kansas. even trump realises that, or at least he says that he does
Posted on: 2016/5/24 1:50
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If you do the basic math on the 1984 TTF, it was to be annually funded for $365M. Assuming nothing was spent, it would be $11.68B and they now are $16B in the hole? So where did $28B go?
Posted on: 2016/5/24 1:25
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Has no one read about the cost overruns on the RT35 highway repair down the shore after Sandy that are just about finished? Any TTF funding has to be in a lockbox, otherwise Trenton will figure out a way to steal it (as if not enough gets stolen through 'prevailing wage' rules which add over 30% to the costs).
I still shake my head over the 6 billion dollar school construction fund boondoggle . . .
Posted on: 2016/5/24 1:20
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A sliding gas tax.... even Massachusetts voters nailed that one shut. Please tell me one time a tax has ever been lowered or the revenue applied to what is was originally earmarked?
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Posted on: 2016/5/24 1:05
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Exactly right. Anyone who thinks a penny of any gas tax increase would actually go towards the roads or public transport is woefully naive. It simply would get shoveled into funding the gravy trains that state workers enjoy. Pensions and health benefits for life.
Posted on: 2016/5/24 1:04
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And you will give them more because they have done such a good job managing their pension system. That is the black hole this extra revenue will go to fund. Hasn't anybody learned?
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Posted on: 2016/5/24 0:59
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Now that is funny.... liberal math, let us raise the gas tax to OFFSET another tax like property? Do you really think Trenton is that benevolent? What do you think $10 tax per gallon.
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Posted on: 2016/5/24 0:54
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People, People, it all makes sense - King Steve is taking his cue from the Obama administration. Talk about Topic Z because you've failed in solving Problems A, B, C...
Steve, don't do your job as Mayor and stop the killings and crime and lower property taxes because (like Obama) it's a lot more difficult to actually DO & ACCOMPLISH than it is to talk about it. Maybe someone should tell the mayor that the price of gas has increase over $0.50/gallon in the past two months.
Posted on: 2016/5/23 22:58
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Just can't stay away
 
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I side with Fulop on gas taxes, but I rolled my eyes when he made a reference to "everyone pays their fair share."
The other gubernatorial candidates favor increasing gas taxes too, even Phil Murphy, and he's as committed a poll-testing politician as they come.
Posted on: 2016/5/23 19:58
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The income tax, sales tax, and lottery were sold to the public as a means to pay for school costs. Unfortunately, we still have school taxes.
Posted on: 2016/5/23 19:41
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Home away from home
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I think the earlier points about preventing leakage from the fund is a good one. The gas tax does need to go up and infrastructure does need to be invested in, but raising the tax only to have it go elsewhere is only making things worse.
I agree with elsquid that there needs to be consideration given to mass transportation, bicycle and walking infrastructure in TTF spending. Improved and greater access will equal more use - good for those who prefer those modes of transportation over driving. Good for drivers who would see some easing of volume. Good for the infrastructure as that easing of volume equals less wear and tear. One thing that has struck me for a while and I've frequently wondered why it isn't done would be a sliding gas tax. For the past two years, gas prices have been very low - which would have been a good time to raise the tax. When prices rise above some arbitrary point (call it $2.50 per gallon for conversation purposes), you start lowering the rate of the tax in small increments. You could use a regional wholesale price (pre-tax) to keep individual retailers from gaming the outcome. Since late 2014, you could have easily slapped another 25 cents a gallon in tax on and it wouldn't have been a terrible blow to people already conditioned to paying $3 or more per gallon.
Posted on: 2016/5/23 19:11
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Back in the '70s the state income tax was implemented with the specific purpose of lowering property taxes. We now have both very high income and property taxes.
Posted on: 2016/5/23 19:04
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Like anything else in NJ its over done. How about a $.10 a gallon tax after a cheaper rate of repair per mile is negotiated. Or better yet use Corzine additional 1% sales tax. Where did that go?
Posted on: 2016/5/23 18:56
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More like pointing out the blatant hypocrisy that's par for the course for "progressives."
Posted on: 2016/5/23 18:56
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