New Jersey and New York Receive More in Tolls than Gas Tax Receipts

June 19, 2007

fThe Tax Foundation has posted a new table to the website comparing how different states receive revenue from gas taxes versus the money collected from toll roads. Four states—New York, New Jersey, Delaware, and Alaska—receive more revenue from toll collections than from gas tax receipts. The Empire State collects over four times more from tolls than gas taxes. Some states have no toll revenue.

Why do some states rely so heavily on tolls while others merely raise revenue through gas taxes? Using tolls as a user fee for roads is an easier way to export tax burdens to out-of-towners because those who drive on roads with tolls (typically interstates) are more likely to be out-of-towners than those traveling on local roads. Plus, it is much more efficient to have a toll road on an interstate where entry is easily excludable than having someone pay a toll for each time he/she makes a turn inside a city from 1st Street onto 2nd Street.

Also, any history student will know that most major cities reside in areas near a body of water, and typically bodies of water separate political boundaries (i.e. states). Thereby, imposing a toll on a bridge heading into New York City is an easy way for the state/city to “tax” people who commute into the city from other states like New Jersey and Connecticut. The District of Columbia is seeking to do the same regarding drivers from Virginia and Maryland, although constitutional issues may come into play. Other means of taxing out-of-towners would likely be more feasible and more efficient to administer, such as raising taxes on parking garage services.

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