Why suspending the gas tax is a bad idea – and some alternative solutions

As business manager of International Union of Operating Engineers Local 825, Greg Lalevee is obviously a trade unionist.

And suspending the 43-cent gas tax — for a week, a month, a year — would obviously be bad for union workers working on the many jobs created by the state replenishing the Transportation Trust Fund. .

Greg Lalevee. (File photo)

Lalevee, however, always thinks first of the needs of the state as a whole.

And there are many reasons why suspending the gas tax is a bad idea in this light as well.

Not only will infrastructure projects be put on hold, but the state’s credit rating could also be affected, Lalevee said.

“Governor. (Phil) Murphy was very proud to speak in his budget speech about Moody’s first upgrade in 40 years to New Jersey’s credit rating,” he said. if we suspend the gas tax, there’s $900 million in Transportation Trust Fund debt that you’ve now told Moody’s that you’ve cut off the revenue stream.

“How do you think they’ll react to this?” I guess it won’t be positive.

Sal Risalvato is the executive director of the New Jersey Gasoline, C-Store, Automotive Association.

As chief lobbyist for the NJGCA — the trade association representing small business members in the petroleum retail, gas station, auto repair and convenience store sectors — he doesn’t want to either. see a suspension of the gas tax.

And its members don’t benefit – or get harmed – anyway.

“It’s just not a smart move for the state financially,” he said. “We need the projects coming out of the trust fund. It would harm the state. »

The attraction, however, is strong.

By some estimates, this will save the average driver around $100 per month, depending on the distance traveled. That’s a potential savings of $1,200 per year.

Risalvato has other ideas if you want to help consumers.

It starts with self-serve gasoline.

“If we approve self-serve gasoline today, I can guarantee consumers will see a 15-cent price drop tomorrow – guarantee it,” he said emphatically. “It’s something they can do to lower the price that won’t cost the state a penny.”

Sal Risalvato. (File photo)

Risalvato acknowledges that a recent poll said residents prefer to have their gas pumped, by a margin of 3 to 1.

Of course, he points out, the question was asked without consideration of cost.

Then there’s the other cost issue that hurts gasoline retailers and consumers. Credit card charges.

Banks typically collect a 3-3.5% fee on every dollar spent on gasoline. When gasoline went from $2 a gallon to $4 a gallon, the fees charged to credit card companies – now by far the preferred method of payment – ​​doubled.

“That means every time you use a credit card, it costs the station owner 14 or 15 cents per gallon,” he said.

Risalvato said it was a hidden increase in the cost of gasoline, whether it was placed in the cost of all gallons sold or added to the price of those paying on credit, an increase per gallon that many stations have increased to 20 cents.

“Right now the banks are cleaning up,” he said. “They make a fortune — and no one pays attention.

“They have doubled their revenue on gas sales over the past six months. Who pays for this? Customers.”

Getting banks to agree to take a smaller percentage of gas sales is a much more difficult solution to the current gas price crisis. But that’s an original thought. And that would be a win-win:

  • The banks would get the same amount of gas as before the recent volatility caused by the war in Ukraine;
  • Consumers would get some respite at the pumps;
  • The state would get to maintain the reserves going to the Transportation Trust Fund.

The likelihood of that happening is slim.

Risalvato and Lalevee hope the state will do more than cut funding for the Transportation Trust Fund.

“I think that would be disastrous,” Lalevee said. “I think it’s a knee-jerk reaction that wouldn’t accomplish what it sets out to accomplish.

“I think that’s a false promise – one that sounds much better in theory than in reality.”

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