The Road to Equitable Transportation 

Policy in New Jersey: 

An Assessment of Cost Burdens, Gaps in 

Mobility and Recommendations for Reform

A REPORT FOR THE GARDEN STATE INITIATIVE 

BY JONATHAN R. PETERS, CAMERON E. GORDON, 

AND RICHARD M. FLANAGAN 
2 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

Jonathan R. Peters 

Professor of Finance and Data Analytics

The CUNY Graduate School and The College of Staten Island

Jonathan R. Peters is a professor of finance and data analytics in the Accounting 

and Finance Department in Lucille and Jay Chazanoff School of Business at the 

College of Staten Island of The City University of New York. 

He is also a Member of the Doctoral Faculty in the Ph.D. Programs in the Economics and the Earth and Environmental Science at the CUNY Graduate School 

and is a Research Fellow at The University Transportation Research Center at 

The City College of New York. 

Dr. Peters has and is serving as an expert and chair on panels at the National Academy of Sciences and 

is a subject matter expert in the areas of transportation finance, social justice and road pricing. He is a 

member of the Trucking Industry Research Committee at the Transportation Research Board. 

He currently conducts research in the areas of regional planning, road and mass transit financing, corporate and public sector performance metrics, social justice, capital costs and performance 

management. 

He has recently published in Transportation Research, the Journal of Public Transportation and the 

Transportation Research Record of the National Academy of Sciences. He is also the co-author of 

the book “Preventing Fraud and Mismanagement in Government – Systems and Structures”, published in 2016.

Cameron Gordon 

Associate Professor

Australian National University College of Business and Economics

Dr. Cameron Gordon works in the areas of urban public transport; health and social impacts of transport policy and investment; transport finance; and evaluation 

methods of economic and noneconomic impacts of transport. He holds a PhD in 

economics. Dr. Gordon holds concurrent appointments as Associate Professor at 

the Australian National University College of Business and Economics and Principal Investigator with the Social Policy Simulation Center of the City University of 

New York. He has held prior faculty appointments in Economics (with the University of Canberra), Finance (with the University of Canberra and the City University of New York) and 

in Public Administration (with the University of Southern California). Before his academic career, Dr. 

Gordon had a long public service career which included work for the U.S. Congress Joint Committee 

on Taxation; the U.S. Department of Defense; and the New York City Municipal Water Finance Authority.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 3

Richard Flanagan

Professor of political science at The College of Staten Island, City University of New York. 

A graduate of Drew and Rutgers Universities, he writes about public policy and 

American politics. He is author and co-author of many policy reports including 

most recently “The Affordable Housing Crisis: A New Mitchell-Lama Middle 

Class Housing Program for the 21st Century” (2020) for the Carey Institute for 

Government Reform, “Bringing Back Bayonne: A Strategic Plan for Development” (2017)  for a local civics organization and the book Robert Wagner and the 

Rise of New York City’s Plebiscitary Mayoralty (Palgrave McMillian, 2015).

Acknowledgement

The authors wish to thank Nicholas Lysek for his research assistance in the areas of Geographic Information 

Systems and spatial analysis. 
4 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

Our Mission 

The Garden State Initiative is a 501(c)3 nonprofit organization dedicated to strengthening New 

Jersey by providing an alternative voice and commonsense policy solutions in the state —solutions 

that promote new investment, the growth of jobs, the creation of economic opportunities, and innovation to the benefit of all New Jerseyans. 

GardenStateInitiative.org
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 5

TABLE OF CONTENTS

Executive Summary................................................................................................................................................................................6

Introduction ...............................................................................................................................................................................................9

Box 1.1 – New Jersey’s Long History of Driving...............................................................................................................................9

Review of the Literature—what has been written about NJ Travel and Costs..................................................................11

Cost of Travel: Comparison to NJ, other States and the Rest of USA....................................................................................13

Box 3.1 – Auto Insurance in New Jersey: Problems on the Horizon? ...........................................................................................15

New Jersey State Fuel Taxes...............................................................................................................................................................16

Alternatives to Conventional Driving in New Jersey................................................................................................................19

Box 4.1 – A Short History of NJ Transit.........................................................................................................................................20

Transit Deserts ....................................................................................................................................................................................... 22

Electric Vehicles......................................................................................................................................................................................24

Box 6.1 – The Problems of Taxation and EVs ................................................................................................................................ 28

Box 6.2 -EVs and the Low-Income Households ............................................................................................................................. 29

New Jersey Transportation Legislation and Policy Context.................................................................................................30

The Burden of Who Will Pay for All This.................................................................................................................................... 32

General Conclusions .............................................................................................................................................................................35

Policy Recommendations................................................................................................................................................................... 36
6 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

Executive Summary

This report seeks to examine the various issues that impact the cost of travelling in New Jersey, and 

some of the future items that may impact the state as technologies change. A multi-modal analysis is 

conducted to understand how the costs of owning and driving a vehicle, and the availability of transit 

(or lack thereof) in New Jersey impact household and business behaviour, now and in the future.

The costs of driving in New Jersey are driven by policy decisions made in the past: about automobile 

infrastructure, transit alternatives, development patterns, tolling, and taxation and finance. While 

many of these decisions were good for their times, they are not serving New Jerseyans so well now. 

Many residents, even those living near the two major metropolitan areas of New York and Philadelphia, still have to rely at least partially on cars for travel, and their operating costs are generally 

higher than national and regional averages. Tolls are a major source of this difference, and there are 

good reasons to believe that this burden is even higher than the official data suggest. Insurance is 

also more expensive than in many other places and congestion leads to very high commute times 

for some.

New Jersey itself also runs a considerable bus and rail operation. But the differences between northern and southern sections of the state, and the differences in costs between these and the surrounding metropolitan areas indicate that the portfolio of transportation options is different for New 

Jerseyans. There are also very different cost burdens across different socioeconomic groups within 

the state.

These factors taken together reveal that New Jersey is something of a tale of two – or three or more 

– states when it comes to transportation. Costs of driving are lower in the north than in the south. 

Transit availability and cost also differs across those two regions. Large parts of the state of significant population and size are in transit “deserts” with few alternatives to car travel, should they want 

such an option. This is compounded by significant differences in cost burden and travel alternatives 

structured according to income and socioeconomic class.

Many have high hopes that technology can correct the deficiencies of the current situation, especially with regard to environmental impact, but also ease and cost of travel. Electric vehicles (EVs) 

have been seen as an advance that will lead to clean, green, cheap and convenient travel for all, especially when combined with current ride-sharing schemes, such as Uber and Lyft, and with future 

innovations like driverless vehicles. 

But as this report demonstrates, the cost of building the necessary infrastructure for an EV fleet is 

substantial, even for a 10% fleet transition, and there are many other unresolved issues as well, such as 

EXECUTIVE SUMMARY
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 7

cost of electricity, load capacity of the existing power network, equity impacts, and other challenges. 

New technology is certainly part of any future solution to making driving and transportation by any 

mode more efficient, effective and affordable in the state, but it will come at a substantial financial 

cost and take a significant amount of time to implement, with many winners and losers long the way.

Given all this we make the following key recommendations:

1. Split New Jersey Transit (NJT) into two parts: North New Jersey Transit and South New 

Jersey Transit. 

No other state in the nation organizes mass transit operations on a statewide basis, and for 

good reason. The state’s two regions face very different realities. No matter what mass transit 

improvements there may be for South Jersey in the decades ahead that section of the state 

will always be dependent on cars for basic travel. Since South Jersey is often an afterthought 

in state mass transit planning and finance, the region deserves independent standing with its 

own dedicated state mass transit agency. 

2. Provide mass transit with a dedicated revenue stream 

Whether NJ Transit stays as one unit or is split in two, mass transit in the state needs a reliable and dedicated revenue stream – most effectively from dedicated taxes. NJT’s budget 

has been subject to swings in allocation according to the whims of Trenton politicians thus 

making long-term planning and operational improvements challenging.

3. Policymakers in the state would do well to hedge their bets as to what technology will win 

the future—battery charges or hydrogen fill-ups.

A carbon zero future will depend on more subsidies and investment of which the current 

Clean Energy Program is just a start. It very well may be the case that different regions in the 

state will have different EV mixes. Furthermore, in light of the infrastructure challenges, it 

is likely that the traditional combustible engine will continue to be used into the near future, 

and well established engine/battery hybrids will see us through a long period of transition. 

4. A deregulated auto insurance market works best. Keep it that way.

One of the great bipartisan success stories in the state has been the taming of auto insurance 

rates in the past twenty years. There are over thirty major players in this market competing 

for consumers. Deregulation is a success story, and efforts to re-regulate this market by micromanaging risk assessment models of firms is a step in the wrong direction. 

If these recommendations are implemented, the people of New Jersey will be able to look 

forward to a state transportation system that is tailored to meet the needs of all its diverse 

population, tailored to the unique locally prevailing circumstances that occur in different 

parts of the state, especially the north versus the south. Financing and funding would be 

more efficient, allowing for lower fiscal burdens to deliver better improvements without 

getting locked into unsuitable or unsustainable technologies. 

5. The state legislature should eliminate the revenue target for the fuel tax, and set a statutory 

limit on the percentage of tax revenue the governor can divert 

If current trends hold, the future is not bright for New Jersey’s drivers. Over the past few 

EXECUTIVE SUMMARY
8 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

years, New Jersey jumped from the almost bottom to nearly the top among the states in 

taxes collected at the pump. Trenton is siphoning off tolls and fuel taxes to help NJT. While 

federal stimulus aid may put off a day of reckoning for a time, this reallocation of monies 

is a long-term threat to road capital plans. It is time to pump the brakes on road tax and toll 

siphoning.

6. Explore innovative alternative revenue mechanisms.

There are a number of innovative options that one can consider in terms of funding sources 

for transportation systems. Possibilities include privatizing street parking spaces, to taxing 

box deliveries from online shopping retailers. Using multiple sources of revenue to support 

New Jersey’s transportation system provides a mix of revenue sources that would be most 

equitable in a state and efficient with diverse transportation systems and regional variation 

in services. 

7. Use a portfolio approach to financing the State transportation system

There are unexplored opportunities to tax landowners in urban areas that benefit from mass 

transit investments and tax activity that occurs in congested regions such as urban freight 

delivery. This portfolio approach would provide a number of funding sources for transportation and would also be more equitable in terms of regional burden. 

EXECUTIVE SUMMARY
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 9

1. Introduction

Using a vehicle is a vital component of daily life in most communities in the United States and thus 

driving is a ubiquitous activity. People drive for all sorts of reasons – getting to a job, taking children 

to school, visiting friends and family, shopping for goods, and hundreds of other reasons. In New 

Jersey, the most densely populated state in the United States, these challenges are more profound 

than in many other states. Things such as congestion, mass transit needs, land use and housing 

density, port commerce and regional and national travel and goods movements all converge in 

New Jersey. These issues also create significant public policy and public finance needs that continue 

to evolve. New technologies and uses such as telework, electric and hybrid vehicles, micromobilty 

(scooters and e-bikes), ride sharing companies such as LYFT and Uber and other factors are changing the face of mobility needs in the Garden State. Additionally, as much as the rise of automobile 

and truck use have shaped New Jersey’s development, the state’s land-use and economic development patterns have shaped mobility and travel outcomes (see Box 1.1). 

This report seeks to examine the various issues that impact the cost of driving in New Jersey and 

some of the future items that may impact the state as technologies change. Further, we look to understand how the costs of owning a vehicle and driving in New Jersey impact household and business behavior.

BOX 1.1: NEW JERSEY’S LONG HISTORY OF DRIVING

The challenges that New Jersey currently faces around automobile use, and the demands 

that household and business mobility use places on our transportation network, have been a 

cause for concern for decades. The New Jersey State Legislature sponsored a study of automobile use in 1918 entitled “The Administration of County and Township Highways in New 

Jersey” to examine how much stress this new model of travel was placing on the existing 

road network, and consider plans to address the need for additional roads and road funding. 

In 1906, New Jersey had 13,759 registered motor vehicles. By 1918, that number had rocketed 

to 155,513 motor vehicles – a 1,030% increase! At the same time, the 20,445 miles of highway 

network was largely unpaved – consisting of mostly gravel and dirt roads – with only 23.26% 

of roads having what we would now consider some form of pavement (the bar here was quite 

low, as it included stone and wood block as “pavement”). 
10 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

New Jersey’s population exploded after World War II zooming from 4,160,165 in 1940 to 

7,171,122 in 1970, a 72.4% increase. This was a time of massive suburbanization. Much of this 

suburban growth occurred in areas that were formerly rural farming communities, many of 

which had very limited mass transit services and were places of relatively light density. This 

placed intense pressure on government to improve roads and transit services in these new 

places of growth, and the spending to support it. 

Fast forward to today. Technologies and circumstances are changing, but the challenges remain the same, namely, how to provide affordable and efficient means of transportation to 

get people where they need and want to go.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 11

2. Review of the Literature—what has been 

written about NJ Travel and Costs

The cost an individual traveling from one point to another incurs on a journey divide into components.

Mode Choice (car, public transit, etc.)

Operating Cost of Mode (fuel, wear-and-tear, maintenance, insurance, parking, etc.)

Journey Travel Time (multiplied by personal value of time per unit)

Operator Fees (tolls, transit fares, taxes, etc.)

There are many relationships between these different cost components, mode choice being the key 

one. A choice to travel by car attaches to the trip additional operating costs for the individual that 

generally exceed the costs of public transit. But transit trips often take a lot more time than auto 

trips and require payment of fares. Of course, in some areas the choices of mode may be limited, as 

many locations offer little or no public transit options.1

Two other inputs into this cost equation are the traveler’s socioeconomic status and the locations 

of their most frequent trips. There is also a relationship between socioeconomic status and location. Low income households generally have fewer financially feasible transport alternatives when 

compared to wealthier people, and low income people are not always able to afford to live in areas 

with good transit. Some locations have higher transport costs than others, sometimes directly in 

the form of higher tolls or fuel prices, and sometimes indirectly because of greater congestion, and 

hence longer travel times, in lower cost neighborhoods. 

The most important journey for many people is the commute to work. This does not include all 

trips, of course. Sometimes non-work travel, e.g., to take children to and from school, are very 

time-consuming, and some people don’t work or work at home. Work commuting, however, remains one of the major trip purposes and there is a great deal of data collected about this journey. 

For 2019, the US Census Bureau reported that those living in New Jersey had a mean (average) travel 

time to work of 33.1 minutes, about 20% higher than the mean national figure of 27.6 minutes. Table 

2.1 shows a mode share comparison between New Jersey and the US. What stands out is that New 

1 What is the average cost of commuting in the us?, Learn how to calculate the cost of your daily trip to work, The balance, Rebecca 

Lake (Erika Rasure reviewer) Updated May 26, 2021, https://www.thebalance.com/how-much-does-commuting-cost-the-average-american-4175825; The True Cost of Commuting . https://www.listwithclever.com/research/true-cost-of-commuting/

Governing. Riding Transit Takes Almost Twice as Long as Driving. https://www.governing.com/archive/gov-transit-drivingtimes.html. 
12 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

Jerseyans drove to work in lower numbers than Americans generally (71.0% versus 75.9%) and took 

proportionately more public transit (11.6% to 5.0%).

TABLE 2.1. MODES OF TRAVEL TO WORK – NEW JERSEY V US 2019

New Jersey United States

Drove alone 71.0% 3,137,002 75.9% 119,153,349

Carpooled 7.9% 348,602 8.9% 13,900,979

Public transit 11.6% 510,746 5.0% 7,778,444

Bicycle 0.2% 10,796 0.5% 805,722

Walked 2.7% 118,774 2.7% 4,153,050

Other 1.8% 77,724 1.4% 2,179,002

Worked at home 4.9% 217,410 5.7% 8,970,800

U.S. Census Bureau (2019). American Community Survey 1-year estimates. Retrieved from Census Reporter Profile page for New Jersey http://censusreporter.org/profiles/04000US34-new-jersey/

New Jersey sits in two major metropolitan statistical areas: New York-Newark-Jersey City and Philadelphia-Camden-Wilmington. Where a New Jersey resident lives likely structures their mode 

choice and commute time. The metropolitan area of New York-Newark-Jersey City, encompassing 

the northern half of the state, had an average commute time of 37.6 minutes in 2017. Only 50.3% of 

trips were taken by auto, and 30.9% were taken by public transit. In the southern part of the state, 

dominated by the Philadelphia-Camden-Wilmington metro area, the average commute time was 

30.5 minutes. Car trips accounted for 72.3% of the total and public transit 9.8% (US Census, American 

Community Survey 2018).
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 13

3. Cost of Travel: Comparison to NJ, other States 

and the Rest of USA

As for how these characteristics translate into actual travel costs, the US Bureau of Labor Statistics 

(BLS) expenditure survey sheds some light. Table 3.1. shows the comparison between NJ transportation expenditures and US averages for 2018-2019.

TABLE 3.1. CONSUMER EXPENDITURES ON TRANSPORTATION NJ 

VERSUS US 2018–19

Category NJ USA NJ as % US

Transportation – TOTAL $10,671 $10,742 99.3%

Vehicle purchases (net outlay) $2,683 $4,394 61.1%

Gasoline, other fuels, and motor oil $2,027 $2,094 96.8%

Other vehicle expenses $4,607 $3,474 132.6%

 - Vehicle finance charges $141 $252 56.0%

 - Maintenance and repairs $967 $887 109.0%

- Vehicle insurance $2,038 $1,545 131.9%

 - Vehicle rental, leases, licenses, and other charges $1,460 $790 184.9%

Public and other transportation $1,355 $781 173.5%

Source: US Bureau of Labor Statistics (BLS) 2019. Figures above are means.

U.S. Bureau of Labor Statistics. Consumer Expenditures—2019. https://www.bls.gov/news.release/cesan.nr0.htm

These figures would appear to indicate that overall transportation expenditures for New Jerseyans 

were like those of most Americans, on average, during 2018-19. The third column shows New Jersey 

expenditures by category as a percentage of the US average indicating that the two figures were 

almost identical. The major differences were in net outlays for vehicle purchases, which in New Jersey were only around 61% of the US average; and in public and other transportation, which for New 

Jersey represented 173.5% of the US average. Vehicle insurance and other miscellaneous vehicle fees 

were also significantly above the US levels. 

This, however, is an incomplete picture for several reasons. First, averages disguise significant cost 

differences between local regions and users. The differences between North and South Jersey require deeper examination. 

Second, two major categories of cost are not included in the BLS data. The first measurement gap, 

which is the value of travel time spent making trips, is not a direct cash expenditure but simply the 

opportunity cost of lost time. It is easy to overlook this expenditure since it has no direct cash value. 
14 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

But that doesn’t mean that it is not important. This issue is considered in more detail later. Some of 

this time factor appears to be captured in the average fuel economy of New Jersey vehicles – where 

the implied fuel usage rate per mile appears to be somewhat higher (about 16 mpg) than the national 

averages of 22.2 miles per gallon based upon reported fuel use and Vehicle Miles traveled in New 

Jersey. Further exploration of this issue may be warranted but is outside the scope of this report.

The second gap is around the collection and analysis of data for road tolls and other road use 

charges. These costs are actually surveyed for and notionally included in vehicle operating expenses (the many fine subcategories of this line item are not included in the broad table above). However, earlier research by the report authors on the BLS data indicated that road tolls and road use 

charges are seriously underreported. We found that the total road tolls and road use charges (BLS 

consumption item 520541) indicated by households was roughly 42-56% below the reported amount 

of road toll revenue as indicated by the toll agencies. New Jersey is a highly tolled state both in terms 

of mileage and outlay. This underreporting by BLS significantly understates the cost of road tolls 

and thus the cost of driving overall on New Jersey households. One credible estimate is that for the 

New York-New Jersey region, these tolls may amount to an average 5% to 10% addition to the average 

expenditure on transportation.2

Table 3.2 provides more detailed data on quarterly household expenditures within New Jersey, separating the state into its northern and southern halves and comparing them to their respective metropolitan regions of New York and Philadelphia (and also northern Delaware). The data are for the 

June 2019 quarter. The highest number in each column is boxed for emphasis.

Among the striking patterns are the differences in spending between the northern and southern parts 

of the state, the former having a total transport spend ($1,484.84) almost 40% higher than the latter 

($1,085.56). Northern New Jerseyans spent considerably more on transport than the average across 

the New York City metro area ($1,099.22), although southern New Jerseyans spent considerably less 

than their metro Philadelphia counterparts ($1,681.21). Overall transportation is generally the fourth 

highest category of state household spending, below housing, food, and personal insurance. 

TABLE 3.2. DETAILS ON THE HOUSEHOLD SPENDING ON TRANSPORTATION 

ITEMS – JUNE 2019

Region State Avg. Vehicles Avg. Age Food Alcohol Housing Apparel Transport Health Care Entertain.

Northern Delaware 1.88 54.00 $2,243.96 $167.25 $5,234.75 $175.21 $2,332.83 $1,077.17 $321.75

North Jersey New Jersey 1.30 55.53 $1,643.98 $63.40 $4,283.10 $268.55 $1,484.84 $895.98 $351.72

South Jersey New Jersey 1.75 48.42 $1,494.17 $191.25 $3,889.81 $110.00 $1,085.56 $678.36 $421.83

NYC Metro New York 0.84 54.96 $1,596.44 $82.46 $4,220.45 $202.53 $1,099.22 $736.64 $325.43

Philadelphia Pennsylvania 1.49 59.11 $1,406.98 $107.97 $4,233.91 $185.77 $1,681.21 $1,026.45 $696.00

Region State Pers. Care Reading Education Tobacco Misc. Cash Contr. Pers. Insuran. Total Spending

Northern Delaware $22.96 $14.38 $- $113.21 $13.13 $- $2,446.52 $14,163.11 

North Jersey New Jersey $59.34 $5.06 $47.65 $6.69 $42.28 $744.65 $1,860.55 $11,757.80 

South Jersey New Jersey $84.33 $18.58 $23.33 $34.67 $59.33 $100.42 $1,566.15 $9,757.79 

NYC Metro New York $66.22 $10.70 $198.46 $31.30 $274.69 $316.27 $1,275.41 $10,436.21 

Philadelphia Pennsylvania $94.52 $8.14 $28.43 $14.61 $94.47 $289.37 $1,124.17 $10,992.00 

2 Peters, J, King, D.A., Gordon, C., Santiago, N.T. (2015). For Whom the Consumer Price Index Tolls: Reporting of Road Pricing in 

the consumer expenditure survey. Transportation Research Record 2530 (1), 55-64.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 15

Table 3.3. shows detailed expenditure components of transportation spending. The big differences 

between North and South Jersey are in the North’s considerably higher maintenance and repair and 

public transportation costs, and the South’s higher vehicle insurance (See Box 3.1). What also stands 

out is the higher local tolls totals New Jerseyans shoulder as compared to the residents of the two 

major metropolitan areas on either end of the state. 

Table 3.3. Transportation expenditure components – July 2019

Region State Gasoline & Oil Veh. Finance Char. Maint & Repair Veh. Insurance Other Veh. Charg. Pub. Transp. Local Tolls

Northern Delaware $425.94 $36.13 $368.48 $500.50 $172.21 $829.58 $11.92

North Jersey New Jersey $298.69 $20.64 $233.42 $282.64 $171.79 $199.87 $17.58

South Jersey New Jersey $337.56 $58.25 $91.27 $384.08 $214.39 $- $20.17

NYC Metro New York $231.12 $15.25 $59.53 $218.16 $230.56 $237.40 $10.79

Philadelphia Pennsylvania $322.40 $34.46 $119.36 $251.37 $178.58 $32.18 $7.98

One key issue to consider is the massive increase in New Jersey state fuel tax rates that occurred in 

2020. These changes are apparently not captured in the 2019 data on household expenditures from 

the Bureau of Labor Statistics and this issue will be examined in detail in the next section of this 

report. The authors have also contacted the Federal Highway Administration (FHWA) to discuss 

reporting issues in the state level fuel taxation data at the FHWA – as current data at the FHWA does 

not appear to reflect the radical increase in fuel tax rates in New Jersey.

BOX 3.1. AUTO INSURANCE IN NEW JERSEY: PROBLEMS ON THE HORIZON? 

There was a time in New Jersey when automobile insurance affordability was a lighting-rod 

issue in state politics. It was the major policy dispute in the 2001 gubernatorial campaign 

when both candidates, Democrat James E. McGreevey and Republican Bret Schundler, 

promised big reforms to lower what had for many years been among the highest rates in the 

nation. Ironically, although he campaigned on a plank that called for a more incremental 

reform, once elected, McGreevey adopted Schundler’s market approach. 

McGreevey eased market regulations by allowing for more price discrimination in the risk 

assessment of drivers, and new insurers entered the marketplace. The resulting competition 

lowered average insurance prices, dropping New Jersey to the middle of the pack among the 

states. Efforts were made to reduce fraud, and the Insurance Research Council estimates that 

only 3.1% of drivers on the road in New Jersey are uninsured now, the lowest rate in the nation.3

There are two potential issues now down the road facing policymakers and consumers from 

the perspective of affordability. 

The first is that the state legislature is considering legislation that would prevent insurers from 

using credit scores and occupation as a factor in the determination of rates. This move toward 

re-regulation threatens hard-won gains in making this marketplace competitive and efficient. 

3 Insurance Research Council, “One in Eight Drivers Uninsured,” March 22, 2021; Holly Bakke, “This Change Would Hike Care 

Insurance in New Jersey”, June 7, 2021 nj.com. 
16 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

The second is that even with the decrease in average insurance rates from previous decades, 

working-class New Jerseyans feel the pinch from insurance rates. A 2017 federal study found 

that in 143 of the state’s 595 zip codes, the majority of policyholders in 82 of them paid more 

than 2% of their personal income on mandatory insurance policies.4 The hardest hit counties 

by this measure are Camden, Essex, Atlantic, Passaic, and Mercer.5

New Jersey State Recent Fuel Tax Increases

Given the recent increase in fuel tax rates moving New Jersey from the second lowest state fuel tax 

at 14.5 cents per gallon in 2016 to the 4th highest at 50.7 cents per gallon in 2021, the existing data 

sources have not yet captured the full impact of these tax increases on household expenditures. 

Utilizing data on fuel tax rates from the Tax Foundation6 and data on county population from the 

NJ Department of Labor and Vehicle Miles Travelled from the NJ Department of Transportation, 

we provide below, in Table 3.4, an estimate of the impact of the increase in New Jersey fuel taxes on 

a per capita basis and for a household of 4 people if fuel usage was similar to 2019 rates. Under that 

scenario, the average New Jersey household is paying an additional $763.02 in fuel taxes each year 

under the new 50.7 cent per gallon fuel tax rate. This burden varies significantly by county based 

upon the amount of driving in the households and the number of zero car households. The household burden varies from a low of $303.33 in Hudson County to a high of $1,302.07 in Hunterdon 

County. Overall, this fuel tax increase raised about 1.7 billion additional dollars for the New Jersey 

Transportation Trust Fund.

TABLE 3.4. ESTIMATED NEW JERSEY FUEL TAX REVENUE BY COUNTY, 2016 AND 2021

2021 2016 2021 2016

County

County 

Population

Fuel Used

Gallons

Fuel Tax 

Revenue at 

50.7 Cents

Fuel Tax 

Revenue at 

14.5 Cents

Anuual 

Change in 

Fuel Taxes

Fuel 

Taxes Per 

Capital

Fuel Taxes 

Per Capital

Change in 

Fuel Taxes 

Per Capital

Additional 

Cost Famiy 

of 4

Atlantic 266,105 172,449,657 $87,431,976 $25,005,200 $62,426,776 $328.56 $93.97 $234.59 $938.38

Bergen 930,390 456,373,051 $231,381,137 $66,174,092 $165,207,044 $248.69 $71.13 $177.57 $710.27

Burlington 445,702 292,766,546 $148,432,639 $42,451,149 $105,981,490 $333.03 $95.25 $237.79 $951.14

Camden 506,738 244,556,296 $123,990,042 $35,460,663 $88,529,379 $244.68 $69.98 $174.70 $698.82

Cape May 93,086 62,241,808 $31,556,596 $9,025,062 $22,531,534 $339.00 $96.95 $242.05 $968.20

Cumberland 151,906 72,646,908 $36,831,982 $10,533,802 $26,298,181 $242.47 $69.34 $173.12 $692.49

Essex 795,404 309,469,927 $156,901,253 $44,873,139 $112,028,113 $197.26 $56.42 $140.84 $563.38

Gloucester 291,165 179,461,170 $90,986,813 $26,021,870 $64,964,943 $312.49 $89.37 $223.12 $892.48

Hudson 670,046 140,360,590 $71,162,819 $20,352,286 $50,810,534 $106.21 $30.37 $75.83 $303.33

Hunterdon 124,823 112,243,180 $56,907,292 $16,275,261 $40,632,031 $455.90 $130.39 $325.52 $1,302.07

Mercer 367,922 225,032,811 $114,091,635 $32,629,758 $81,461,878 $310.10 $88.69 $221.41 $885.64

Middlesex 825,920 500,978,674 $253,996,188 $72,641,908 $181,354,280 $307.53 $87.95 $219.58 $878.31

Monmouth 621,659 405,580,335 $205,629,230 $58,809,149 $146,820,081 $330.77 $94.60 $236.17 $944.70

Morris 493,379 325,278,966 $164,916,436 $47,165,450 $117,750,986 $334.26 $95.60 $238.66 $954.65

4 Federal Insurance Office, U.S. Department of Treasury, “Study of the Affordability of Personal Automobile Insurance,” January 2017.

5 Consumer Federation of America, New Treasury Dept. Report Reveals that 8 Million Americans in NY-NJ-CT Live in Zip Codes 

Where Auto Insurance is Unaffordable,” January 23, 2017. 

6 https://taxfoundation.org
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 17

2021 2016 2021 2016

County

County 

Population

Fuel Used

Gallons

Fuel Tax 

Revenue at 

50.7 Cents

Fuel Tax 

Revenue at 

14.5 Cents

Anuual 

Change in 

Fuel Taxes

Fuel 

Taxes Per 

Capital

Fuel Taxes 

Per Capital

Change in 

Fuel Taxes 

Per Capital

Additional 

Cost Famiy 

of 4

Ocean 596,415 301,662,326 $152,942,799 $43,741,037 $109,201,762 $256.44 $73.34 $183.10 $732.39

Passaic 503,637 177,815,271 $90,152,342 $25,783,214 $64,369,128 $179.00 $51.19 $127.81 $511.23

Salem 62,990 49,146,406 $24,917,228 $7,126,229 $17,790,999 $395.57 $113.13 $282.44 $1,129.77

Somerset 329,838 209,813,703 $106,375,547 $30,422,987 $75,952,560 $322.51 $92.24 $230.27 $921.09

Sussex 141,483 79,231,896 $40,170,571 $11,488,625 $28,681,946 $283.93 $81.20 $202.72 $810.89

Union 554,033 274,168,404 $139,003,381 $39,754,419 $99,248,962 $250.89 $71.75 $179.14 $716.56

Warren 105,862 87,246,110 $44,233,778 $12,650,686 $31,583,092 $417.84 $119.50 $298.34 $1,193.37

New Jersey 8,878,503 4,678,524,033 2,372,011,685 678,385,985 $,693,625,700 $267.16 $76.41 $190.76 $763.02

In addition, households and businesses in New Jersey also contribute to the U.S. Federal Fuel taxes 

at a rate of 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel. These funds 

are contributed to the Federal Highway Trust Fund and a good portion of that money is returned 

to New Jersey in the form of federal highway and transit aid. Table 3.5 provides an estimate of the 

fuel tax funds contributed by drivers in 2021 to the New Jersey Transportation Trust Fund and the 

Federal Highway Trust Fund (roads and transit). 

TABLE 3.5. ESTIMATED NEW JERSEY AND FEDERAL FUEL TAX REVENUE 

BY NJ COUNTY – 2021

County NJ Fuel Tax Revenue U.S. Fuel Tax Revenue Total Fuel Taxes

at 50.7 Cents at 18.4 Cents New Jersey - 2021

Atlantic $87,431,976 $31,730,737 $119,162,713 

Bergen $231,381,137 $83,972,641 $315,353,778 

Burlington $148,432,639 $53,869,044 $202,301,683 

Camden $123,990,042 $44,998,359 $168,988,401 

Cape May $31,556,596 $11,452,493 $43,009,089 

Cumberland $36,831,982 $13,367,031 $50,199,014 

Essex $156,901,253 $56,942,466 $213,843,719 

Gloucester $90,986,813 $33,020,855 $124,007,668 

Hudson $71,162,819 $25,826,349 $96,989,168 

Hunterdon $56,907,292 $20,652,745 $77,560,038 

Mercer $114,091,635 $41,406,037 $155,497,673 

Middlesex $253,996,188 $92,180,076 $346,176,264 

Monmouth $205,629,230 $74,626,782 $280,256,011 

Morris $164,916,436 $59,851,330 $224,767,766 

Ocean $152,942,799 $55,505,868 $208,448,667 

Passaic $90,152,342 $32,718,010 $122,870,352 

Salem $24,917,228 $9,042,939 $33,960,167 

Somerset $106,375,547 $38,605,721 $144,981,269 

Sussex $40,170,571 $14,578,669 $54,749,240 

Union $139,003,381 $50,446,986 $189,450,367 

Warren $44,233,778 $16,053,284 $60,287,062 

Total $2,372,011,685 $860,848,422 $3,232,860,107 
18 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

Overall, in 2021, we estimate that New Jersey drivers contribute 3.2 billion in funds to the federal 

and state transportation trust funds via fuel taxation. This represents a roughly 100% increase over 

these costs in 2013 – or 1.7 billion dollars each year that New Jersey households have to fund from 

their take home pay or businesses have to pay as an additional expense to their operations.

In August 2021, based upon the rebounding in the use of motor fuel as the COVID19 Pandemic became more manageable, New Jersey announced that the New Jersey fuel tax rate would be reduced 

starting in October 2021 by 8.4 cents per gallon. This impact would yield an overall reduction in 

fuel taxes of 388 million dollars in costs – but that would be offset by the expected rebound in overall household and business driving – thus the NJ Transportation Trust Fund in 2022 would have a 

similar funding pattern as compared to 2021. County level burdens are expected to be only changed 

in minor ways.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 19

4. Alternatives to conventional driving 

in New Jersey

As the analysis thus far shows, New Jersey is a densely populated, highly urbanized state, surrounded by large metropolitan areas with significant public transit. New Jersey itself also runs a considerable bus and rail operation. But the differences between northern and southern sections of the state, 

and the differences in costs between these and the surrounding metropolitan areas indicate that the 

portfolio of transportation options is different for New Jerseyans.

Let’s begin with public transit – in this case NJ Transit Bus Routes. In Figure 4.1, we see route concentrations and hubs in the New York City and Philadelphia regions, as well as the state capital in 

Trenton, and a “microhub” in Philipsburg. While these lines accommodate commutes that accord 

with traditional pre-1970s travel patterns, there has been apparently no significant bus network development to reflect the New Jersey reality of the last two generations, namely, the rise of suburban/

exurban sprawl communities where people live, and the rise of edge cities, low-density cityscapes 

where people work and shop. A robust and modern state bus system would maintain its current 

commitment to serving central city/suburban communities while expanding service to connect the 

state’s edge cities. Edge cities – new urban development with low density office space and retail – 

includes places like Bridgewater, Morristown, and Princeton/Route 1 corridor.

We note with some interest the large gaps in service in areas in Ocean 

County that have large concentrations of seniors, yet little to no fixed 

route mass transit options for mobility limited people. There is apparently some county level service in these areas, but the services are 

limited in terms of geographic scale, service frequency, and days of 

operation.7

The disjointed and regional nature of the bus system as well as the 

very long travel times suggest to us that in terms of a regional and 

state mass transportation system, we should focus our analysis on 

the fixed rail systems and their stations. Using existing data on commuter rail and light rail routes and stations, we then looked at the 

availability of rail transit within a 5-mile radius of the existing rail 

transit stations.

7 See for example Ocean County’s Ocean Ride service - https://www.co.ocean.nj.us/OC/Transportation/frmOceanRideBusRoutes.aspx

Figure 4.1. New Jersey Bus Stops and Bus Lines
20 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

Figure 4.2. shows the New Jersey Transit railroad stations 

and lines, with a 5-mile buffer around each station. In the 

map we delineate those geographies of the state that are 

within a reasonable feeder distance of a ride on New Jersey Transit rail services. The lines follow the historical development of the central city/suburbs of New York City 

with extensions down the Jersey Shore and to Trenton. 

With respect to rail, New Jersey, which was home to the 

first railroad line in the United States, has a network of 

commuter rail lines and stations that were consolidated 

in the 1980’s into the New Jersey Transit (NJT) commuter rail system. These legacy systems were developed in 

some cases over 130 years ago and were reflective of travel 

patterns during the periods in which they were first built. 

Thus, the state struggles with funding a large, disjointed, 

gap-ridden statewide rail system.

The bus and rail in the state clearly follow the traditional 

model of serving the New York and Philadelphia suburbs 

and linking traditional industrial cities of Newark and 

Trenton. While this may have been appropriate in 1960, one must wonder if these same patterns 

of service are consistent with land use patterns and development over the 60 years since then. Although New Jersey is the only state to have a statewide transit operator in the form of NJT, it does 

not have a truly statewide transit network (See Box 4.1)

In summation, the New Jersey bus network largely provides additional local circulation around the 

train network, especially for the densest urban areas, but provides limited usefulness as an overall 

mass transit option for New Jersey residents. We note the lack of any statewide map of bus services 

at New Jersey Transit, thus apparently validating the argument that buses in New Jersey are best 

evaluated on a route-by-route basis for local travel, not as an overall integrated regional or state 

system.

BOX 4.1. A SHORT HISTORY OF NEW JERSEY TRANSIT (NJT)

The state legislature created New Jersey Transit (NJT) in 1979 as a clean-up operation of the 

failing private companies that ran bus and rail lines in the state. NJT purchased for its portfolio the largest bus carrier, Transport of New Jersey, the Newark City Subway, and other 

lines approaching bankruptcy. In so much as the agency’s bus and rail lines were pickups 

from around the region to alleviate the mass transit crisis that dated to the 1950s, it has been 

difficult for planners to integrate the lines and modes into a truly unified state mass transit 

system. The early decades of the agency were tumultuous with frequent labor unrest, service, and headline-making breakdowns.8

8 Gerald Benjamin and Richard Nathan, Regionalism and Realism: A Study of Governments in the New York Metropolitan Area (Washington, DC: Brookings Institution, 2001), 137–152. 

Figure 4.2. New Jersey Transit Railroad Stations with 

5 mile buffer
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 21

Things are somewhat more stable in the last twenty years with the development of significant capital projects like the Hudson-Bergen and River (Trenton to Camden) light rail lines, 

as well as the Newark city subway extension. There have been improvements in connectivity 

for commuters to New York City with the opening of junction stations and Newark Airport 

service. 

But it is ironic that the nation’s only state-wide mass transit agency does not offer integrated 

mass transit service. The counties in South Jersey have not been well served by this deficiency. NJT operates historical/legacy commuter lines that feed into New York City, and a 

hodgepodge of bus lines that fail to operate as a seamless bus operation for the state. 

While things might not be as dire as there were in the 1980s and 1990s, the agency still struggles. The newest chapter of the agency’s history opened on September 29, 2016 when a train 

ran through the bumper block at the Hoboken terminus killing one woman on the platform 

and injuring over 100 others. The tragedy was a focusing event for the safety, financial, and 

management problems at NJT. Governor Christie underfunded the capital budget to patch 

holes in the operating budget and as a result the rail and bus fleets are aging quickly out of 

productive service. 

For mass transit advocates the problem is that NJT has no dedicated tax stream to support 

the capital and operating budget (in contrast to New York mass transit operations which 

enjoy dedicated tax revenues that account for about 35% of spending). Instead, NJT revenue 

streams have been quite erratic. With a base of about 43% of revenue generated at the farebox, the remaining funds have been generated by a mix of intergovernmental funds. The 

state has been an unsteady partner with support varying greatly from the year to year, and 

gubernatorial administration.9

Governor Murphy made improvement of NJT performance a big campaign promise when 

he won office in 2017. To that end, he increased state budget support from $132 million at the 

start of his term to $800 million for fiscal year 2021. While it is a fine idea to strengthen this 

key component of the state’ transportation network, the money comes from a diversion of 

funds from the Turnpike Authority, a habit his predecessor, Governor Christie, developed 

that Murphy has reduced but not quite abandoned.

While NJ Transit cannot depend on year over year increases in incremental state aid, one 

consistent element has been the raiding of funds dedicated to other purposes to patch a 

budget together. Governor Murphy has been playing a shell game, grabbing funds from 

the capital budget to support the operating budget, and shifting money from other sources, 

including the dedicated Clean Energy Fund and Turnpike tolls.10 The recently inked deal of 

up to $2 billion in payments from the Authority to NJT for cash raids on the Turnpike’s tolls 

are jeopardizing the needed investments in the state roadways.

9 State of New Jersey Department of Transportation, “Comprehensive Strategic, Financial & Operational Assessment of New 

Jersey Transit,” October 5, 2018, Chapter 5, “Funding Sources,” 88-102. 

10 Brent Johnson, “ ‘Absolutely Mind-Blowing’ NJ Transit Funding not Boosted in New State Budget, NJ.com, June 21, 2021. 
22 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

5. Transit Deserts in New Jersey

For about thirty years, social scientists have employed the general concept of a “desert” to describe 

places where the supply of a public good or amenity does not match its demand. The notion informs 

analysis across many policy domains, including food access, medical care, public libraries, and 

educational institutions. Thus transit deserts are places where the supply of public transportation 

options does not match demand. 

Figure 5.1. shows the “New Jersey Rail Transit Deserts”, shading those areas of the state outside of the 

five-mile rail station buffer. We constructed this map based upon the existing commuter rail network and stations as provided by New Jersey’s Geographic Information Services. We then estimated 

a buffer of 5 miles on each station and allowed for overlaps between stations. This is intended to be 

reflective of the idea that passengers that seek to use a commuter rail station would have some form 

of vehicle or transit feeder service to access the commuter rail station. We then selected the tracts 

from the 2010 Census that had no part of the tract within 5 miles of a rail station. The desert map is 

reflective of those Census tracts.

A 5-mile station buffer is a very broad standard to use in 

terms of transit access and thus our measure of the transit 

deserts in New Jersey is a very conservative assessment. In 

reality, in many of the fringe areas near the deserts, we 

would expect it to be very challenging to attempt to live 

without a private automobile, especially with a transit station several miles away. One could use a more restrictive 

buffer on the transit rail stations – say a one-mile walk 

distance, such as is used by Monmouth County for their 

bus services analysis - that would yield a much greater 

percentage of Census tracts that would fall into the transit 

desert category.

In terms of the location of the deserts, the northern counties on the New York and Pennsylvania border and much 

of South Jersey are included in these deserts. While there 

are a few undeveloped and very rural areas within these 

deserts, such as the Pinelands in Southern Jersey that has 

a large amount of state park land, many of these areas are Figure 5.1. New Jersey Rail Transit Deserts
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 23

actually fairly densely populated, and in some cases are relatively close to metropolitan Philadelphia. The vast bulk of the four most southern counties – Salem, Gloucester, Cumberland, Cape 

May and a small portion of Atlantic County -- fall within one massive transit desert. Towns such as 

Glassboro, Woodstown and Vineland are all relatively close to Philadelphia, but none are served by 

rail transit and, as such, in spite of their relatively close proximity (35-50 miles) to one of the top ten 

urban areas in the United States, these communities must rely heavily on private automobile use as 

their primary model of travel.

Based on data from the 2010 Census, we can then explore the demographics of the population that 

lives within five miles of a rail station and the population that lives in transit deserts in New Jersey. 

Table 5.1 provides an overview of the demographics and gender breakdown in the rail served areas 

of New Jersey and the transit deserts in New Jersey. In total,1.8 million people, 21.2% of the New Jersey population, lives in transit deserts. In general, the unserved population tends to be more white 

(Anglo) and less Hispanic as compared to the rail served population. We also examined the impact 

of age on transit access for Age 50+ year old residents and Age 65+ residents. Seniors 50+ (AARP 

Eligible) had a percentage of rail transit served at 76.7%. Seniors 65+ (Social Security Eligible) had 

a percent of rail transit served of 74.8%. These percentages were slightly below the New Jersey rail 

transit served rates – and warrant continued monitoring.

TABLE 5.1. TRANSIT DESERTS IN NEW JERSEY – SOCIOECONOMIC CHARACTERISTICS

Group

Total 

Pop.

White 

Pop.

Black 

Pop. AIAN

Asian 

Pop. NHOPI OTHER

Multi 

Race

Hispanic 

Pop.

Male 

Pop.

Female 

Pop.

Total 

Population 8,791,894 6,029,248 1,204,826 29,026 725,726 3,043 559,722 240,303 1,555,144 4,279,600 4,512,294 

Percent of 

Population 68.6% 13.7% 0.3% 8.3% 0.0% 6.4% 2.7% 17.7% 48.7% 51.3%

Served By 

Rail 6,930,159 4,466,203 1,069,678 23,941 659,969 2,483 505,391 202,494 1,385,835 3,369,136 3,561,023 

Percent of 

Population 

Served 64.4% 15.4% 0.3% 9.5% 0.0% 7.3% 2.9% 20.0% 48.6% 51.4%

Not Served 

By Rail 1,861,735 1,563,045 135,148 5,085 65,757 560 54,331 37,809 169,309 910,464 951,271 

Percent of 

Pop. Not 

Served 84.0% 7.3% 0.3% 3.5% 0.0% 2.9% 2.0% 9.1% 48.9% 51.1%

Percent 

Served By 

Rail 78.8% 74.1% 88.8% 82.5% 90.9% 81.6% 90.3% 84.3% 89.1% 78.7% 78.9%

Percent Not 

Served By 

Rail 21.2% 25.9% 11.2% 17.5% 9.1% 18.4% 9.7% 15.7% 10.9% 21.3% 21.1%
24 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

6. Electric vehicles

Perhaps, though, traditional transit is a thing of the past. Maybe the future lies with “green” vehicles, 

especially Electric Vehicles (EVs). These are said to be efficient and carbon-friendly and many argue 

that EVs, combined with driverless and other advanced directional technologies may transform the 

automobile into a flexible and environmentally friendly mode of travel that will make transit and 

conventional driving a thing of the past. 

Similar arguments have been made for ride-sharing, and decentralized travel platforms like Uber, 

though as of now these forms have mainly supplemented rather than supplanted traditional transit 

and automobile networks. Of course, transit networks are already in place. But EVs require a whole 

new infrastructure needed to support it, especially charging stations. 

The Argonne National Laboratory in 2012 provided a model of electric vehicle charging diffusion 

which would make it possible to replace the current gasoline-based car network with an electric one. 

Their model is reproduced in Figure 6.1.

Essentially, this pyramid visualizes an ideal with ubiquitous single-family home chargers serving as a foundation, 

with decreasing numbers of units from that base for workplaces, public spaces, and commercial use (such as bus 

fleets). Our estimates of the required number of charging 

stations in New Jersey to support an initial transition to a 

fully electric automobile fleet were developed from this 

conceptual pyramid, combined with current charging 

time requirements and maximum distances of travel 

from one charge. 

The estimate assumes a requirement that home charging 

stations for all electric vehicles will be in place for single 

and multi-family dwellings. This yields 605,000 stations 

for 10% of the New Jersey fleet of vehicles. Stations also 

need to be deployed in public settings as well as fleet operations, bringing up the total to approximately 750,000 

charging stations to accommodate a 10% vehicle transition in New Jersey. Average cost data was utilized to estimate the total cost of supplying the necessary number of stations to reach this 10% target. 

The calculations are provided in Tables 6.1 and 6.2.

Source: Argonne National Laboratory, 2012

Figure 6.1. EV charging station hierarchy
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 25

TABLE 6.1. ESTIMATES OF EV CHARGING STATION COSTS AND 

USER UNIT PROPORTIONS

Type of Units Percent of Costs Percent of Units Potential Payer

Inter Metro 2.73% 0.23% Fee Based or Municipal

Public in Metro Areas 21.85% 1.81% Fee Based or Municipal

Fleets 10.53% 6.12% Fleet Owners

Employees at Work 24.97% 14.51% Employers or Fee

Multi-Family Home 14.63% 28.34% Property Owners or Fee

Single Family Home 25.28% 48.98% Households

Total $2,372,011,685 $860,848,422 

TABLE 6.2. ESTIMATED EV COSTS

Electric Vehicle Charging Units and Costs at 10% of New Jersey Fleet Current NJ Vehicle Fleet 6,057,711

Based on FHWA Table MV-1 and Argone National Laboratory Model 10% of NJ Vehicle Fleet 605,771

Type of Units Number of Units Percent of Units Price Per Unit Total Costs

Inter Metro 1,776.5 0.23% $35,000 $62,175,919 

Public in Metro Areas 14,211.6 1.81% $35,000 $497,407,355 

Fleets 47,964.3 6.12% $5,000 $239,821,403 

Employees at Work 113,693.1 14.51% $5,000 $568,465,548 

Multi-Family Home 222,056.9 28.34% $1,500 $333,085,282 

Single Family Home 383,714.2 48.98% $1,500 $575,571,368 

Total Chargers 783,417 = = $2,276,526,876 

Home Based Chargers 605,771 $908,656,650 

These figures reveal the very substantial charging infrastructure costs involved in moving to an electric vehicle 

future. The maps below in figures 6.2 through 6.5. visualize the significant challenges ahead for New 

Jersey. Figure 6.2 maps the incredible penetration of infrastructure to support combustible engine 

travel in the state already in place, built over many decades. The daunting challenge is that there 

must be the same, if not more, infrastructure penetration with EV stations for the transition to succeed. Recharging time takes at least five times longer than filling up with gasoline (30 minutes for a 

fast charge versus 5 minutes for a fuel stop) so there would have to be many more EV electric vehicle 

recharging units available than there are gasoline pumps today. Since vehicle recharging time is far 

longer than gassing up, stations will have to significantly expand their parking storage and queuing 

spaces for vehicles. This problem will be particularly acute on the New Jersey Turnpike and Parkway since many of these travelers are on long-distance trips. 

Presently, there are few places to recharge outside of the New York City and Philadelphia area. In 

large parts of the state, including the Highlands and much of the Coastal Plain, one can drive for 

miles and miles without seeing an EV station at all. Even in those areas where there are stations, the 

numbers are insufficient for scaling up EVs in these densely populated places. 

Figure 6.2 provides an overview of the relationship between traditional fuel stations and the New 

Jersey road network. In the case of conventional vehicle fuel services, most segments of road in New 

Jersey are in close proximity to conventional fuel stations. 

Figure 6.3 provides an analysis of the proximity of public/private/government charging stations 

as compared to the known transit deserts in New Jersey. Unfortunately, most of the public/private/
26 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

government EV charging stations are located in areas that are served by mass transit – a situation 

that appears to not be very helpful to residents of transit deserts. In Figure 6.4, we provided a 5-mile 

buffer on the existing public/private/government electric vehicle charging stations. Even examining the data on EV charging stations and assuming a five-mile journey to get to charging station, 

many areas that are transit deserts remain poorly served by EV charging stations.

Figure 6.5 provides a 5-mile buffer analysis on traditional fuel stations. The results indicate that 

almost all of New Jersey – including the transit deserts are within 5 miles of vehicle fuel stations. 

An 8-10 mile buffer would provide almost complete coverage with significant overlap in most areas.

Figure 6.2. New Jersey Gasoline Stations

Figure 6.4. Electric Vehicle Charging Stations – 

5 Mile Buffer and Rail Transit Deserts

Figure 6.3. Electric Vehicle Charging Stations 

and Rail Transit Desert

Figure 6.5. Gasoline Service Stations – 5 Mile

Buffer and Rail Transit Deserts
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 27

There are challenges beyond these. One must consider both the cost to construct and operate public/commercial charging stations as well as the capacity of the electric grid to provide the power 

needed to charge vehicles on demand during peak loading periods. 

Gasoline and diesel fuel can be created and shipped to stations prior to use. Electricity is typically generated in real time in response to demand. Whereas storage of gasoline and diesel is quite 

simple, there is little to no storage capacity on the grid for electricity. A matter meriting significant 

attention is the relationship between the state’s electric grid capacity and a scale-up toward an EV 

future. 

There are some silver linings here. Home charging generally would typically occur during the evening and late-night hours when electric demand is low. It is also possible that electric vehicles in 

conjunction with smart electric meters could provide some amount of storage capacity on the grid 

wherein vehicles plugged in during low demand periods could absorb additional generated energy 

(such as wind turbine power) to store for later use during peak load periods. Using a smart meter 

would thus assure the owner of the vehicle of at least an 80% or so charge, with a corresponding 

credit or payment for the use of the vehicle battery capacity as a grid storage element. This could 

reduce the cost of power for EVs and facilitate a greener grid in general.

As to our present circumstances, Figure 6.3 maps out current EV Charging Stations, showing the 

locations of the currently 693 public/private/government charging stations across New Jersey along 

with their 1839 chargers. As already noted, these stations are concentrated in areas outside of the 

transit deserts. Thus, we have charging capacity in areas that have public transit access options, and 

very limited charging capacity in transit deserts. As the deserts are expected to remain automobile 

dependent for the foreseeable future, one will need to consider how and where we deploy public EV 

charging stations to serve New Jerseyans most equitably. At the current rate of public deployment, 

we have about 1% of the public charging facilities that we ultimately will need to address the needs 

of an electric vehicle fleet that represents only 10% of our current overall vehicle fleet. 

In a recent article in The Wall Street Journal, “Gas Stations Weigh the Benefit of EV Chargers,” the 

point is made that the unfortunate reality is that major fuel distributors are having trouble developing a model that makes economic sense in terms of EV Charging facilities. They cite the cost of 

installing the chargers (up to $100,000 each) as well as the impact of the installation process on their 

facilities (particularly the massive cost of installing electrical conduit into their existing parking 

lots). The reality is that these key operators cannot find a viable financial model for EV charging. As 

A.J. Siccardi, an executive at Race Car Petroleum noted, “We don’t see an investable marketplace”. 

This situation speaks to a real need to discuss how we can develop a viable model that will create a 

market for EV charging that works economically without massive infusions of public money (see 

Box 6.1).

Finally, there is also the matter of what technology New Jersey state and local governments should 

invest in. Battery EVs are a more well-developed technology with relatively low costs per mile. Hydrogen fuel cell EV technology has fuel up times comparable to combustible engines but the cost 

per mile for fuelling is at least five times more expensive than EV battery. 
28 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

BOX 6.1. THE PROBLEM OF TAXATION AND EVS

Each EV charge is going to use grid electricity. That electricity has a cost. An EV currently 

costs about $15.27 to charge. Based on a charge per kilowatt of $0.28, that would imply an 

energy use of 54.54 kilowatts. If this charge yields a 410-mile range (as claimed by one prominent EV manufacturer) this yields a 4 cent per mile cost as compared to a 16 cent per mile 

cost for a conventional vehicle. 

A considerable gap is that an EV under the current system would not pay into a major source 

of transportation funding, the fuel tax fund. Using a conventionally fueled (gas or diesel) 

vehicle as our guide, we would see a need to charge EVs about $14.17 in road use tax (federal 

and state fuel taxes) above and beyond the cost of the electricity used in the charge. Clearly, 

this is of considerable concern if we see a significant transition to EVs as their proliferation 

would undermine the revenue from the fuel tax. Imposing vehicle registration fees on EVs 

that are reflective of the fuel tax burden could be a potential solution to the problem of an 

underfunded Transportation Trust Fund. Further, public EV charging stations could have a 

road use tax built into the fee structure of charging station use. These are solvable – but considerable – problems under the existing EV fee structures. They will need to be addressed as 

the EV fleet grows or we will have significant losses to existing tax revenue

TABLE 6.1. COST FOR AN EV VERSUS CONVENTIONAL CAR – 410 MILE TRIP

Item Gasoline Vehicle EV Charge

Price per Gallon $3.25 

Price per Kilowatt $0.28 

MPG 20.00

Gallons 20.50

Kilowatts 54.54 

Cost for Fuel $66.63 $15.27

Fuel Tax Per Gallon $0.691 

Transportation Taxes $14.17 $- 

Total User Cost $66.63 $15.27

Total Fuel Costs $52.46 $15.27 

Cost per mile $0.16 $0.04 

In conclusion, the road to an EV future is not without significant obstacles. The Natural Resources 

Defense Council’s plan for the Garden State’s transportation future delineates the benefits but pays 

little attention to the costs outlined here.11 NRDC’s general idea – of incentivizing and accelerating 

the transition to an EV future through conventional cap and trade architecture on carbon-emitting 

fuel suppliers with a credit auction system among suppliers that would incrementally draw down 

the number of available carbon units – ignores many of the issues discussed here. Even NRDC ac11 There findings about New Jersey can be found in two documents: Natural Resources Defense Council, “NDRC Factsheet: Modernizing New Jersey’s Transportation,” March 2018, https://www.nrdc.org/sites/default/files/modernizing-newjersey-transportation-fs.pdf and Bruce Ho and Uchenna Bright, Transportation Reimagined: A Roadmap for Clean and Modern Transportation 

in the Northeast and Mod-Atlantic Region, Natural Resources Defense Council, July 2018, https://www.nrdc.org/sites/default/files/

transportation-reimagined-roadmap-ne-midatlantic-report.pdf.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 29

knowledges that the transition will create winners and losers, and without government subsidies, 

rural and exurban New Jerseyans will be left in the lurch. 

It is true, as NRDC points out, that the status quo is no friend of the average household budget, 

with transportation costs second only to housing in the rank list of costs in rural areas. NRDC also 

highlights the hidden benefits related to public health, congestion reduction, and job growth related to the green transportation revolution which are indisputable. But NRDC ignores the costs and 

barriers involved in the green transportation transition. For working-class people in New Jersey’s 

exurban and rural areas, the cost of EV technology is well out of reach for the short term.12 (See Box 

6.2). To go all in on electric vehicles instead of hedging bets with the further development of hydrogen cell and hybrid engine technologies, NDRC ignores the substantial barriers to EV infrastructure 

development in urbanized, renter-dominated cities in places like Hudson and Essex counties. 

As the Toyota Corporation has argued, the transition to green transportation will likely take far longer than climate champions would care to acknowledge, so mitigation strategies need to be pursued, 

such as sticking with hybrid combustible engine/battery technology like the Toyota Prius longer 

than environmentalists would like, and fully embracing the fact that alternative versions of EV like 

hydrogen cell power need additional research and development support. Battery EV will not likely 

work in the densest parts of the state when there are relatively few single-family homes to allow for 

overnight charging of vehicles.13

BOX 6.2. EVS AND THE LOW INCOME HOUSEHOLDS

Electric vehicles (EVs) are today largely the provenance of the wealthy and upper middle 

class. EVs are more expensive than gasoline or diesel-powered vehicles and the used vehicle 

market is small. Furthermore, those with more money are more likely to have a location 

at home to recharge. Policymakers should be considering how EV technology will impact 

lower middle- and low-income groups in New Jersey. Lower income households typically 

have a vehicle for basic transportation – and this vehicle is likely much older and require 

maintenance.

When we consider how EVs will transfer from the wealthier classes to lower income households one must consider how vehicles age. Traditional fossil fuel vehicles, in many cases, 

can often be maintained and have their useful lives extended through relatively affordable 

and simple repairs, sometimes done by the owner. While EVs are touted as having minimal maintenance needs due to their simple mechanicals, they do have a few weaknesses to 

consider. The key one is battery life. Batteries in EVs typically are rated with an 8-10 year 

lifespan and/or something like a 200,000 mile lifespan. Once the battery fails it can cost 

between $6,000-$10,000 for battery replacement, a price that very well may exceed the cost 

of the vehicle. One wonders how good and reliable EVs will get to lower income households 

without a reliable used-car market, and how less well-off New Jerseyans will be able to shoulder the significant cost of battery failure.

12 Ivan Penn and Niraj Chokshi, “Electric Cars for Everyone? Not Unless They Get Cheaper,” New York Times, August 9, 2021, 

https://www.nytimes.com/2021/08/09/business/energy-environment/biden-electric-cars-cost.html

13 Hiroko Tabuchi, “Toyota Led on Clean Cars. Now Critics Say It Works to Delay Them,” New York Times, July 25, 2021, https://

www.nytimes.com/2021/07/25/climate/toyota-electric-hydrogen.html.
30 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

7. New Jersey transportation legislation and 

policy context

EVs are – potentially – transport for the future. The New Jersey transportation system is, in many 

ways, still a product of its past. Home of the first divided highway and cloverleaf, New Jersey was a 

leader in highway development in the early 20th century. The modern state highway system dates 

to 1917, when the legislature created fifteen state routes, and a state highway department with an 

eight-member governing commission. Over the decades, governance of highways and transportation evolved toward a model of gubernatorial control with transportation policy reoriented toward 

multimodal (mass transit) solutions in reaction to the environmental and smart growth movements 

of later decades. 

New Jersey was an early “highway state.” In 1949, the legislature created the New Jersey Turnpike 

Authority to finance and toll two major highways, the Turnpike and the Garden State Parkway. By 

1960, anchored by these two major thoroughfares as well as other secondary routes, there was a total 

of 1,900 miles of state roads. As Rutgers University regional economists Hughes and Seneca noted, 

the state “had a pre-war [highway] infrastructure that was one of the finest state highway systems in 

the country.”14

Since the 1960s, investment has not paced with demand. It was not until the early 1990s when 

the final pieces of state’s Interstate Highway System were completed, a notable delay for the nation’s most urbanized state. While the state government took a leading role in developing the 

roadway network in the early years of motorization, the state now owns only 9% of the total network. This is roughly half the average percentage of ownership of other state governments.15

This localism is characteristic of New Jersey. But the ownership issue conceals what makes the system move, namely, gubernatorial initiative, with the state legislature playing an important but secondary role with veto power over the moves a governor may want to make. The major flow of money from state transportation trust funds to municipal roadways comes from the state trust fund. 

Yet this funding is very uneven, with municipalities receiving from state and federal sources only a 

fraction of the funding needed to address their actual infrastructure needs.

In the 1980s, Governor Tom Kean and the state legislature created the Transportation Trust Fund 

to add some stability to transportation policymaking by moving it out of the state General Fund. 

14 Hughes, J. W., & Seneca, J. J. (2005). A Transportation-Driven World-Class Economy: New Jersey at Risk.

Rutgers Regional Report, 23, 1–20. https://doi.org/10.7282/T35Q4XPJ

15 State of New Jersey, “Transportation Choices 2030: Assessing New Jersey’s Transportation System,” N.D., https://www.state.

nj.us/transportation/works/njchoices/pdf/assessment.pdf.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 31

A portion of the fuel tax and gross receipts tax for petroleum products was dedicated to the Fund. 

A Transportation Trust Fund (TTF) Authority was created too to sidestep referendum approval of 

capital projects. The governor makes the key appointments to the executive branch on transportation matters, some subject to state senate approval. One of the most critical is the Commissioner of the state Department of Transportation. The New Jersey TTF Authority is essentially under 

gubernatorial control as the body is chaired by the DOT commissioner. The state treasurer sits on 

the board as well and a majority of the public members of the body are appointed by the governor. 

On October 14, 2016, Governor Chris Christie signed legislation raising the state gasoline tax by 23 

cents a gallon for a total charge of 37.5 cents propelling New Jersey from the second-lowest state gas 

tax in the nation toward the top of the list. With subsequent increases in 2018 and 2020 the state tax 

per gallon stands at 50.7 cents, ranking New Jersey’s pull fourth among the fifty states.16

The deal created the framework for an eight-year, $16 billion spending program for transportation 

improvements with the annual appropriations process specifying outlays in any given fiscal year. 

The package included some offset tax reductions including the elimination of the estate tax and 

reduction in the sales tax. 

The 2016 tax deal was a significant shift in transportation finance in New Jersey. The legislation requires that the gas tax be raised annually by the executive branch if the state’s Transportation Trust 

Fund does not hit yearly revenue targets from gas tax collections. The hike in 2016 was the first time 

the gasoline tax had been raised since 1988. It changed the dynamics of state road funding by offloading from the state legislature a difficult political vote to the establishment of a more automatic 

process that the governor’s bureaucracy was responsible for implementing. The state legislature 

established the architecture of blame avoidance. 

The governor has used it to his advantage too. As State Treasurer Elizabeth Maher Muoio reminded 

those unhappy with the last hike, “any changes in the gas tax rate are dictated by several factors 

that are beyond the control of the administration.”17 If this pattern holds, the state gasoline tax is 

likely to increase in future iterations of multiyear transportation plans. Robust revenue estimates 

will likely move higher than the $2 billion a year mark currently in place. With aggressive federal 

and state efforts to increase fuel efficiency, and the planned move toward electric vehicles, it is likely 

that demand for gasoline will decline. Taxes will rise to cover the revenue shortfall from declining 

consumption. 

This is likely all good policy if paired with subsides for transportation alternatives in the state’s 

transit deserts. The 2016 deal turned gasoline into a sin tax like alcohol and cigarettes. Unlike the 

aforementioned vices however, New Jerseyans in car-dependent transit deserts are in no position to 

“go and sin no more” without rapid development of alternative transportation options. 

16 Janelle Cammenga, “State Gasoline Tax Rates as of July 2020,” Tax Foundation, July 29. 2020, https://taxfoundation.org/stategas-tax-rates-2020.

17 New Jersey Department of Treasury, “Treasury Announces Change in Gas Tax Rate Effective October 1,” August 28, 2020, 

https://www.state.nj.us/treasury/news/2020/08282020.shtml.
32 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

8. The Burden of Who Will Pay for All of This

Recent legislation put forward a model that will continue to burden road users to provide the bulk 

of funding for transportation infrastructure in the State of New Jersey. The heavy reliance on fuel 

taxation as well as revenue from toll roads (above and beyond the cost of operating these facilities) 

will place an uneven burden on New Jersey households based on their location. As highlighted 

above, New Jersey residents do not have equal access to mass transit services, so it is interesting to 

consider how much revenue will be generated from the various counties and how much is appropriate given a number of metrics of costs and resources.

Drawing from previous analysis by Peters and Gordon18, we have data on toll road usage by New 

Jersey E-ZPass users by Zip Code from 2008 that can be summarized at the county level. While it is 

the case that tolling rates have increased since 2008, it is very unlikely patterns of toll use by county 

have varied significantly since then. Further, the general policy of the New Jersey Turnpike Authority to increase tolls uniformly across the system makes these cost patterns stable and inferences 

reliable. With these reasonable assumptions, we can then estimate fuel consumption and fuel tax 

revenue based upon county level Vehicle Miles Travelled from New Jersey DOT data. We also used 

information on income and population from the New Jersey Department of Labor. This allowed us 

to create metrics of income, population and road user fees and taxes for the counties of New Jersey. 

Assuming a 10% contribution to the TTF from tolling dollars and a 90% contribution to the TTF 

from fuel taxes, we thus can create an approximation of the contribution of each county to the NJ 

TTF. Table 8.1 provides a composite view of transportation funding to the TTF and potential metrics of income and geographic fairness. 

What quickly becomes apparent is that there are great inequities between the counties of New Jersey. Some are paying less than their fair share and others more to the state’s Transportation Trust 

Fund through either the prism of per capita contribution (population) or percentage of income of 

county residents. Increases in toll and fuel taxes only magnifies the impact of these inequities across 

counties. We would expect that these burdens will remain the same over the foreseeable future, and 

perhaps worsen with some of the transit desert counties dependent on automobiles being donor 

counties that will not share as much in the benefits of transportation infrastructure investment in 

proportion to their contribution to the TTF.

18 Peters, J., & Gordon, C. (2008). Measuring the equity burden in public service provision: The case of New Jersey Toll Roads. 

Economic Papers: A journal of applied economics and policy, 27(4), 381-392.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 33

TABLE 8.1. RELATIVE SHARES OF INCOME, POPULATION 

AND TTF CONTRIBUTION BY COUNTY

County

Toll Burden GSP & 

NJTP

Percent of Fuel 

Taxes Percent of Income Population Percent

TTF Funding Mix 

10% Tolls 90% Fuel

Atlantic 1.40% 3.69% 2.15% 3.00% 3.46%

Bergen 11.50% 9.75% 13.30% 10.48% 9.93%

Burlington 3.80% 6.26% 4.53% 5.02% 6.01%

Camden 2.00% 5.23% 4.52% 5.71% 4.90%

Cape May 1.20% 1.33% 0.93% 1.05% 1.32%

Cumberland 0.50% 1.55% 1.00% 1.71% 1.45%

Essex 10.10% 6.61% 8.60% 8.96% 6.96%

Gloucester 1.60% 3.84% 2.63% 3.28% 3.61%

Hudson 9.60% 3.00% 7.43% 7.55% 3.66%

Hunterdon 0.50% 2.40% 1.84% 1.41% 2.21%

Mercer 2.60% 4.81% 4.22% 4.14% 4.59%

Middlesex 16.00% 10.71% 8.38% 9.30% 11.24%

Monmouth 13.20% 8.67% 8.20% 7.00% 9.12%

Morris 2.70% 6.95% 8.01% 5.56% 6.53%

Ocean 10.30% 6.45% 5.06% 6.72% 6.83%

Passaic 3.90% 3.80% 4.20% 5.67% 3.81%

Salem 0.20% 1.05% 0.51% 0.71% 0.97%

Somerset 1.50% 4.48% 5.79% 3.72% 4.19%

Sussex 0.30% 1.69% 1.44% 1.59% 1.55%

Union 7.10% 5.86% 6.27% 6.24% 5.98%

Warren 0.20% 1.86% 0.98% 1.19% 1.70%

Total 100.0% 100.0% 100.0% 100.0%

Income and Population Higher than TTF Share

Population Higher than TTF Share

Income Higher than TTF Share

The counties that under-contribute to the TTF often have higher incomes than over- contributors. 

The under-contributors are concentrated in North Jersey. Using the income tax to fund transportation – particularly mass transit in New Jersey – would create a more regionally and income equitable funding base.

Given that a large amount of the TTF has been redirected to mass transit, one has to consider the 

regional and income equity issues in funding programs that rely on user fees and taxes that are not 

providing access to the same level of public services and amenities. We also have to consider how 

these escalating costs will impact the affordability of areas that are not well served by mass transit 

and/or are economically frail. The current funding legislation provides for automatic adjustments 

in the fuel tax whenever financial expectations of the TTF revenue generation are not met. This will 

create additional burdens on residents of counties that have little to no expectation of significant 

mass transit investments.

DOT Commissioner Diane Gutierrez-Scaccetti, in her September 14, 2020 testimony to the New 

Jersey Assembly Budget Committee, outlined the recent 2-billion-dollar capital plan and the share 
34 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

of investments by agency. Table 8.2 and Graph 8.1 provides a breakdown of the spending by agency. New Jersey Transit stands to receive 38.0% of the funding from the TTF Capital Program – and 

those funds are largely targeted for the areas served by rail transit. We will leave it to the reader 

to consider if this capital plan serves all counties in New Jersey in an equitable manner and if the 

redistribution of resources from the south of the state to the north is in the best interest of all New 

Jerseyans. 

TABLE 8.2. NEW JERSEY TRANSPORTATION SPENDING BY AGENCY (2020)19

Program Funding Percent

NJ DOT $810,000,000 40.5%

County Aid $301,000,000 15.1%

Municipal Aid $129,000,000 6.5%

NJ Transit $760,000,000 38.0%

Total 2,000,000,000 100.0%

FIGURE 8.1 NEW JERSEY'S 2 BILLION DOLLAR TRANSPORTATION CAPITAL PROGRAM

NJ DOT $810,000,000 

 $301,000,000 

 $129,000,000 

 $760,000,000 

County Aid

Municipal Aid

NJ Transit

19 The authors have separated the spending category of Local Aid as provided in the testimony of DOT Commissioner Diane 

Gutierrez-Scaccetti into county and municipal aid based upon the long established New Jersey local aid funding split of 70% of 

state revenue to the counties and 30% provided to municipalities. This funding share is apparently not reflective of the actual 

amount and costs of transportation infrastructure as explored by Peters, Peters and Gordon (2017) who found that state and 

federal aid only addressed about 3% of the total municipal road infrastructure funding in New Jersey. This is in part due to the 

large amount of curbs, sidewalks and cross walks that are located on municipal roads as opposed to county or state jurisdiction 

roads and a state funding formula that provides relatively little aid to municipalities.
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 35

9. General conclusions

The costs of driving in New Jersey are driven by policy decisions made well in the past: about automobile infrastructure, transit alternatives, development patterns, tolling, and taxation and finance. 

While many of these decisions have served the state well in the past, they are not serving New Jerseyans so well now. Many residents, even those living near the two major metropolitan areas of New 

York and Philadelphia, still have to rely at least partially on cars for travel, and their operating costs 

are generally higher than national and regional averages. Tolls are a major source of this difference, 

as BLS data show, and there are good reasons to believe that this burden is even higher than the official data suggest. Insurance is also more expensive than in many other places and congestion leads 

to very high commute times for some.

New Jersey is also something of a tale of two – or three or more – states when it comes to transportation. Costs of driving are lower in the north than in the south. Transit availability and cost also differs across those two regions. Large parts of the state of significant population and size are in transit 

“deserts” with few alternatives to car travel, should they want such an option. This is compounded 

by significant differences in cost burden and travel alternatives structured according to income and 

socioeconomic class.

Many have high hopes that technology can correct the deficiencies of the current situation, especially with regard to environmental impact, but also ease and cost of travel. Electric vehicles (EVs) 

have been seen as an advance that will lead to clean, green, cheap and convenient travel for all, especially when combined with current ride-sharing schemes, such as Uber and Lyft, and with future 

innovations like driverless vehicles. The NRDC has specifically called for the wide roll-out of EVs 

in New Jersey.

But as this report demonstrates, the cost of building the necessary infrastructure for an EV fleet 

is substantial, even for a 10% fleet transition, and there are many other unresolved issues as well, 

such as the cost of electricity, load capacity of the existing power network, equity impacts, and 

other challenges. New technology is certainly part of any future solution to making driving and 

transportation by any mode more efficient, effective and affordable in the state, but it will come at 

a substantial financial cost and take a significant amount of time to implement, with many winners 

and losers long the way.
36 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

10. Policy Recommendations

1. Split New Jersey Transit (NJT) into two parts: North New Jersey 

Transit and South New Jersey Transit. 

No other state in the nation organizes mass transit operations on a statewide basis, and for good reason. Mass transit operations are best conducted on a metropolitan level. The state’s two regions face 

very different realities. North Jersey has more economic activity, heavy rail stock and is focused on 

questions related to system integration and performance. No matter what mass transit improvements there may be for South Jersey in the decades ahead that section of the state will always be 

dependent on cars for basic travel. Innovations are likely to be in the categories of bus rapid transit 

and light rail systems, not the heavy rail of the North Jersey system. Because of the nature of NJ 

Transit’s portfolio, agency policymakers focus on New York City commuters. Since South Jersey is 

often an afterthought in state mass transit planning and finance, the region deserves independent 

standing with its own dedicated state mass transit agency. 

2. Provide mass transit with a dedicated revenue stream

Whether NJ Transit stays as one unit or is split in two, mass transit in the state needs a reliable and dedicated revenue stream – most effectively from dedicated taxes. NJT’s budget has been subject to swings 

in allocation according to the whims of Trenton politicians thus making long-term planning and operational improvements challenging. A model for this might be to adopt New York’s payroll tax in 

counties served by the Metropolitan Transportation Authority. No one likes new taxes, but state mass 

transit needs a reliable source of funding. Dedicated revenue would relieve pressure on other functions 

within the state budget and lower the temptation to raid toll and pump tax revenues that should go 

toward roads. If NJ Transit were split in two, North and South regions could adopt different rates and 

conditions. The case for higher rates in the North is more sustainable because of the stronger and more 

ubiquitous mass transit options found there, and the South agency could show taxpayers more mercy. 

3. The state legislature should eliminate the revenue target for the 

fuel tax, and set a statutory limit on the percentage of tax revenue 

the governor or state authorities can shift to mass transit or other 

purposes. 

If current trends hold, the future is not bright for New Jersey’s drivers. Over the past few years, New 

Jersey jumped from the almost bottom to nearly the top among the states in taxes collected at the 
THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY 37

pump. Trenton is siphoning off tolls and fuel taxes to help NJT. While federal stimulus aid may put 

off a day of reckoning for a time, this reallocation of monies is a long-term threat to road capital 

plans. It is time to pump the brakes on road tax and toll siphoning. One of the more outrageous elements of the 2016 deal that raised the fuel tax was the establishment of revenue targets. Fuel taxes 

will go up to hit the aggregate yearly target. This form of indexing is inherently inflationary and 

sets up perverse incentives in that there will be less money for road upgrades as vehicle fuel economy improves and the state transitions toward EVs. 

4. Policymakers in the state would do well to hedge their bets as to 

what technology will win the future—battery charges or hydrogen 

fill-ups.

The state Clean Energy Program, funded by a surcharge on utility bills, has been a frequent target 

of fund raids. This should stop as well. A carbon zero future will depend on more subsidies and investment of which the Clean Energy Program is just a start. In so much as planning transportation 

policy and subsidizing EVs is within the purview of this fund, It very well may be the case that different regions in the state will have different EV mixes. Furthermore, in light of the infrastructure 

challenges we outlined, it is likely that the traditional combustible engine will continue to be used 

into the near future, and well established engine/battery hybrids will see us through a long period 

of transition. 

5. A deregulated auto insurance market works best. Keep it that way.

This is a hard learned lesson for New Jerseyans. As one analyst put it in 1991, the Garden State was 

“the most tangled auto insurance mess in history. Even the Soviet Union would be hard pressed 

to match this economic disaster.”20 For decades, New Jersey was an overregulated auto insurance 

state with few firms willing to do business here. Things are quite different now. One of the great 

bipartisan success stories in the state has been the taming of auto insurance rates in the past twenty 

years. There are over thirty major players in this market competing for consumers. Deregulation is 

a success story, and the problem with auto insurance is the rear-view mirror. Efforts to re-regulate 

this market by micromanaging risk assessment models of firms is a step in the wrong direction. 

Competitors are better positioned to wring out inefficiencies in pricing than the state legislature and 

government regulators.

6. Explore innovative alternative revenue mechanisms.

There are a number of options that one can consider in terms of funding sources for transportation systems. The authors in their prior work for the New York State Department of Transportation 

provided 69 alternative sources of transportation funding – from privatizing street parking spaces, to taxing box deliveries from online shopping retailers. Using multiple sources of revenue to 

support New Jersey’s transportation system seems to be most equitable and efficient in a state with 

diverse transportation systems and regional variation in services. One funding stream to consider 

is income taxation for mass transportation funding. Our analysis suggests taxing income places the 

20 Marjorie Bertie, quoted in John D. Worrall, “Private Passenger Auto Insurance in New Jersey: A Three-Decade Advertisement 

for Reform,” in T. David Cummin, ed., Deregulating Property-Liability Insurance: Restoring Competition and Increasing Market Efficiency (Washington, DC: 2002), 81.
38 THE ROAD TO EQUITABLE TRANSPORTATION POLICY IN NEW JERSEY

burden of mass transportation costs onto the areas of New Jersey with the most income and the best 

mass transit access.

7. Use a portfolio approach to financing the State transportation system

Our general recommendation is to apply a portfolio of taxes and fees to best calibrate the complexity of the Garden State’s transportation system. User taxes on vehicles as captured in tolls and fuel 

tax revenue is the foundation but this revenue should not be redirected away from highways and 

roads to any great degree, nor should drivers be seen as a bottomless piggybank. There are unexplored opportunities to tax landowners in urban areas that benefit from mass transit investments 

and tax activity that occurs in congested regions such as urban freight delivery. This portfolio approach would provide a number of funding sources for transportation and would also be more equitable in terms of regional burden. New Jersey seems to have already burdened the driving public 

with the 2016 plan – it appears we have a lot more work to do to fairly and judiciously tax the users 

that will benefit from the various components of the Transportation Capital Plan.