Mobilizing the Region
Issue 30April 14, 1995

Crossroads Report on Highway Subsidies in NJ: Motorists Pay Less

New Jersey motorists pay $733 million a year less in user-fees (charges like gas taxes and highway tolls) than government spends building and maintaining roads in the state, according to a report released by the Tri-State Transportation Campaign Wednesday. The report, Crossroads: Highway-Finance Subsidies in New Jersey, is the first-ever, in-depth analysis of New Jersey roadway transportation spending and revenue. Where subsidies for public transit are noted regularly in press and policy discussions, it seems widely believed that motorists fully pay their own way. For example, regional media have repeatedly characterized PATH commuter trains as "money-losing" in news reports over the past few months. But the conception that driving is not subsidized has been held deeply enough to block gas tax hikes and other means to collect revenue from motorists. Crossroads' definitive accounting of motor vehicle-user revenues and expenditures in New Jersey provides hard evidence that highway financing is a losing proposition. Using 1993 as its base year, the study found that:

  • All levels of government -- state, federal, county, municipal and public authorities -- spend $3.2 billion annually on road construction and maintenance, driver and vehicle licensing, road related police and other services, and other highway support in New Jersey.

  • New Jersey motorists pay $2.5 billion annually in user-fees, including motor fuel taxes, bridge and tunnel tolls, registration fees, and parking fines and taxes.

  • Government spending on roads in New Jersey thus exceeds motor vehicle user-derived revenue by $733 million annually. Taxpayers make up the difference -- effectively subsidizing traffic.

    This subsidy is borne entirely at the local level, by New Jersey counties and municipalities. Localities spend $1.2 billion a year providing roads and motorist services, but collect only $200 million directly from drivers; the difference of $1 billion is paid largely through property taxes.

    Crossroads is a 45-page report, researched and written by Komanoff Energy Associates, a Manhattan-based economic consulting firm. An earlier KEA study for the Tri-State Campaign found that 65 cents of every dollar spent by government on highways in New York is derived from user-fees; the remaining 35 cents, from taxpayers. The New York report, Subsidies for Traffic was published in March 1994.

    Early news coverage of the report's findings centered in the Star-Ledger. It covered presentation of the general thrust of the report by Rutgers Environmental Law Clinic's Bill Sullivan at Monday's North Jersey Transportation Planning Authority debate on transportation subsidies. A fuller article covering the report's findings and perspective in detail followed Wednesday. Janine Bauer, Campaign director, is quoted saying the report's results "demonstrate that the only way to protect local property taxpayers from subsidizing traffic is to make car and truck user-fees pay more of the costs of building and maintaining highways." Both articles contained comments from the National Motorists Association's Stephen Carrellas, who said the report was "another self-serving attempt by the Tri-State Campaign to justify more money for mass transit by attacking the automobile user."

    The report will be mailed to Campaign members, affiliates and foundation supporters shortly.

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