Gas-tax-holiday proposals raise budget worries
With N.J.'s finances running on empty, a cut could jeopardize roadwork funding.
TRENTON - The state's transportation chief said yesterday that a state or federal gas-tax break would jeopardize funding for critical bridge and road projects just as New Jersey expects a robust summer tourism season.
Republican presidential candidate John McCain and Democratic candidate Hillary Rodham Clinton back a federal gas-tax holiday to help offset price increases. Democratic candidate Barack Obama does not support the idea.
Gov. Corzine said yesterday that the tax holiday wasn't his "favorite idea," but he argued that Clinton's proposal was at least paid for with a new tax on oil company profits and would last only from Memorial Day to Labor Day.
Corzine, who has endorsed Clinton's presidential bid, last week said New Jersey couldn't afford a state gas-tax holiday amid its budget woes. He later released a statement to make clear he doesn't support a federal gas-tax holiday, either.
Corzine's comments came in a discussion he joined with Daniel Tarullo, an Obama economic adviser.
"This is not going to undermine our long-run ability to invest in alternative energies," Corzine said of Clinton's proposal. "I think it's more about stating that we are interested in what the small guy and middle-class is doing."
He said gas prices are hitting truckers and commuters hard.
"People really, really are pressed right now because the cost of living is incredible for middle-class to moderate-income families. I think that's what Sen. Clinton is addressing here," Corzine said.
Still, he said, it's unlikely Congress would approve the plan in time.
"I think it's very unlikely you could get a windfall-profits tax through the Congress in a year, let alone between now and May 31," Corzine said.
Tarullo said that would make it impossible to pay for revenue lost by the holiday.
"Let's not undermine the funding we have to improve our transportation infrastructure," Tarullo said.
Transportation Commissioner Kris Kolluri meanwhile told an Assembly tourism committee that skyrocketing fuel prices makes it more likely New Jersey will see a robust tourism season.
"People will want to vacation closer to home," Kolluri said.
But, he said, a three-month federal gas-tax break would cost New Jersey $190 million in federal transportation aid already allocated for bridge and roadway projects that means 6,300 jobs.