The politics of gas prices have caught New Jersey politicians between a rock and a hard place ― on the one hand, gas prices seem to be going through the roof.  On the other, the state will completely exhaust its resources for transportation spending by mid-2006, and the state has traditionally paid for such investments by taxing gasoline.

   Republican candidate for governor Douglas Forrester blasted rival Jon Corzine this week for refusing to rule out a gas tax increase. Forrester said simply that gas prices need to come down and did not address paying for the state’s transportation system.  “I have already taken a pledge not to raise any taxes, but Jon Corzine has not,” said Forrester. 

   If Forrester wins and keeps his campaign promise, he will have to either divert a huge amount of existing state resources to transportation, let the roads and rails decline or resort to a huge one-shot deal like leasing the NJ Turnpike that may not be a good long-term deal for NJ taxpayers and commuters. 

  The problem for New Jersey is that the existing state gas tax is largely devoted to paying off debt for past transportation projects.  No existing state revenue will be available for transportation projects at all after mid-2006. Repaving a single stretch of state highway or buying one bus will need to be done with new revenue. Ruling out any tax increase will make the job very difficult for Forrester.  Corzine has said he would raise the state gas tax as a last resort to keep the transportation system whole. 

   There is no reason new transportation revenue must come from a gas tax hike, but the tradition has gained a life of its own, especially with reporters.