07.05.16 | SALT Chat
The smart money says John Fogerty was referring to Lodi, California in his 1969 song. But to this day, I always like to think he was singing about Lodi, New Jersey. This reference made the song that much more difficult for me to understand as I never had any problems getting stuck in Lodi; in fact, I always took the time to stop and buy some of that cheap New Jersey gasoline.
What New Yorker hasn’t taken a road trip and planned their fill-up to coincide with maximizing the use of that precious petrol offered so cheaply? One would think oil wells were discovered in New Jersey. In fact, I’ve been told that discovering oil in New Jersey is usually associated with unpleasant events such as pipeline or refinery leaks. The real reason for “lookin for a pot of gold” in Lodi is low gasoline prices; only Alaska currently has a lower gasoline tax.
As I discussed on CBS News Tuesday, June 28, just before the NJ Senate chose not to act, you may be passing right through Lodi if the Governor and the State Assembly have their way. The Bill, had it gone through, would have raised the current gasoline tax from 14.5 cents to 37.5 cents. As part of the deal, the state sales tax would decrease (in stages) from 7% to 6%.
New Jersey currently has one of the lowest gasoline tax rates in the country; if this bill is passed, New Jersey’s gasoline tax rate would be in the highest top 10 of the country. For comparison purposes, the New York gasoline tax rate now stands at 42.3 cents per gallon.
While no one likes a tax increase, we all like better roads and bridges, and the additional revenue from the gasoline tax would have been earmarked for the State’s Transportation Trust Fund. Opponents to the bill point out that the 1% sales tax cut won’t make up for the increased burden created by the rising gas tax. The sales tax revenue is used for the State’s general expenditures and challengers aren’t convinced the hole in the budget can be filled.
While I’m sure that the NJ Legislature will act in what it believes to be the best interest of their citizens, unlike John Fogerty, I’ll miss getting stuck in the East Coast Lodi.
Should you have questions about state and local tax issues, contact me at WBerkowitz@berdonllp.com or your Berdon advisor.
Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, New York Accountants, advises on the unique requirements of governments and municipalities across the nation.
 At approximately the age of eight, it became one hundred percent my responsibility to look at the gas gauge before the start of a family road trip and determine when, where, and how much gas to put in the Thunderbird.