SourceCorzine ends his vow to leave gas tax aloneIncrease would be a last resort, he saysWednesday, December 14, 2005
BY JEFF WHELAN AND DUNSTAN McNICHOLAfter vowing during his campaign that he would not raise the gas tax, Gov.-elect Jon Corzine said yesterday he will reconsider the idea now that gasoline prices have eased and the state's budget gap has ballooned to more than $5 billion.
Corzine's comments to reporters came after a key state senator said he will introduce legislation to raise the tax on gasoline and replenish the Transportation Trust Fund. The fund, which pays for highway and mass transit projects, is about to run out of cash.
The governor-elect said he would look for alternatives, including pouring more of the current gas tax into the trust fund rather than the general state budget. But he said increasing the tax might have to be considered.
"If we scrub this budget and we can't close budget holes and ... get the dollars for the Transportation Trust Fund, then we'll review that," Corzine said after addressing business leaders at a conference in Woodbridge hosted by the New Jersey Business and Industry Association.
Corzine acknowledged his position has shifted along with prices at the pump. "I vowed not to do it at $3 a gallon, that's for sure," he said. "When it was down at the levels we're in right now, I said I hadn't taken it off the table."
In July, Corzine initially said the state "must find alternatives" to increasing the gas tax. Two days later, under pressure from labor leaders who support it, he said it had to be on the table but should be a last resort.
His Republican rival, Douglas Forrester, hammered away at him on the issue as gas prices soared in the wake of Hurricane Katrina. Then, during a radio debate on NJ 101.5 in October, Corzine said flatly: "There will be no gas tax hike in a Corzine administration, particularly after we've seen a $1.50 rise in the price of gasoline. I'm proposing we have a tax holiday."
But transportation advocates continued to warn of a crisis. Just this week, union lobbyists and public officials rallied at the Statehouse to press for increasing the 10.5-cents-per-gallon tax to replenish the transportation fund.
Senate Majority Leader Bernard Kenny (D-Hudson) said yesterday he will introduce a bill to do that in the new legislative session that begins next month.
"Obviously a lot of political work needs to be done and people need to be persuaded. I'm hopeful for bipartisan support because it is an important issue for the entire state," he said.
Lawmakers have declined to raise the gas tax in recent years, instead using billions in borrowed money to keep the fund afloat. But now, all the money coming into the fund is needed to pay off its debt.
Without new money, the state will be unable to pay for any highway construction or mass transit improvements after next July 1, and could lose more than $1 billion in matching federal grants.
In his speech to business executives yesterday, Corzine also offered his first assessment of the overall budget situation he will inherit when he takes office next month. He concluded, "We've got some serious, serious financial challenges ahead."
The governor-elect's transition team yesterday confirmed a $5.1 billion shortfall between likely revenues and projected spending next year, and Corzine said the gap could grow far larger when his plan to boost property tax rebates is factored in.
"And there are not the kinds of gimmicks and alternatives to turn to that have been done, unfortunately, for a very long period of time," he said. "I'm not trying to cast aspersions on other folks; we just have come to the end of the line."
Corzine offered no details as to how he plans to address the budget problem, saying that devising solutions is likely to take longer than the one month remaining in his transition. Earlier this month, Corzine formed a Budget and Re-engineering advisory group to help him formulate strategies for dealing with the looming shortfalls.
"The structural deficit is real," he said. "We're scrubbing it with great detail right now."
Lawmakers, meanwhile, continue to add new spending to the current year's budget, which itself is beset by revenue shortfalls and spending overruns. Recent projections indicate most of the $600 million surplus that was included in the current budget will be used up.
The governor-elect stopped short of calling for a spending freeze during the lame-duck legislative session before his inauguration, saying funding increases for initiatives such as assistance for low-income residents to pay their heating bills are legitimate. But he said the Legislature should exhibit restraint.
"I would rather see the budget stay where it is or shrink, as opposed to grow in its red ink proportions," he said. Referring to the new spending, he added, "We're not in a mode of where we can afford it right now."
