When was the last time NJ had an honest governor? McGreevey is the pits. Whitman erased Florio's tax hike but borrowed like crazy to cover the deficit and her increased spending. Florio, 'nuf said.
Paul Mulshine is NOT my favorite Editorialist. But I have to admit, I lend him credit for this one.
The late Russell Long of Louisiana was perhaps the leading expert on the tax code in the history of the United States Senate. He observed early in his career that no one liked to be taxed, and he came up with an appropriate aphorism: "Don't tax you. Don't tax me. Tax that fellow behind the tree."
Our governor seems to have taken that advice to heart. No sooner does James E. McGreevey announce a new tax than he announces that the tax in question will have no measurable effect on anyone -- or at least anyone likely to vote for him.
A classic in the genre is the "petro-chemical environmental impact fee" that he announced in his annual budget address in February. The tax on petroleum producers is slated to raise $150 million but, "It is important to note that this fee will not be passed on to consumers," the budget document stated.
Someone forgot to tell Environmental Commissioner Brad Campbell. A wire service story on the budget address contained these lines: "Department of Environmental Protection Commissioner Bradley Campbell told the Associated Press the petroleum products fee would raise gasoline prices by 3 cents per gallon. Campbell later denied it."
The spin doctors immediately set to work to repair the damage. But the budget is due to be adopted by the end of the month, and to this date no bill has been drafted. So we still have no idea just who is going to pay the tax -- assuming that "consumers" aren't.
At the moment, it looks like consumers will indeed be paying the tax, but those consumers will be from other states. Treasurer John McCormac told me that the current plan is to raise $150 million by increasing the tax only on those petroleum products that are shipped out of the state.
Which brings us back to Russell Long. He was, by all accounts, an extremely sharp operator. And he came from a state that, unlike New Jersey, has a huge supply of oil and sends vast quantities of it to other states. Bob Slaughter of the National Petroleum Refiners Association in Washington notes that if Long could have pulled this stunt he certainly would have.
"If Louisiana or Texas did that, they would in effect be taxing the rest of the country," said Slaughter. "Any state would do that if they could with any commodity produced in the state, but it's ruled out by the Constitution."
The U.S. Constitution says that no state shall "lay any imposts or duties on imports or exports," Slaughter noted.
"Everyone would love to invent a tax that no one would have to pay," he said. "But no one has done that yet."
Slaughter has never met McGreevey. He is, as I've noted, an unusually talented politician. If anyone can do it, he's the one. McCormac, who's pretty sharp himself, assures me that the tax in question will be constitutional and will stick it to all those out-of- staters who've been unfairly escaping New Jersey taxation for all these years.
The people in the petroleum field aren't so sure. McCormac's theory is that New Jersey's 4-cent-a-gallon wholesale tax on fuels used within the state can also be applied to fuels shipped from our refineries. But the experts point out that New Jersey is a net importer of fuels, not an exporter. The production of our refineries is supplemented by large amounts of fuel pumped from the Gulf of Mexico to Linden through the Colonial Pipeline.
Federal government experts say that no one keeps data on exactly how much petroleum comes in and out of each state. It's simply too complicated. That's why taxes are traditionally collected on the wholesale level or at the pump, where quantities can be precisely measured.
But Jim Benton of the New Jersey Petroleum Council notes that if a 4-cent tax is imposed on fuels refined in New Jersey, those fuels will instantly become noncompetitive on the national market.
"That raises the price of gas by $1.68 a barrel," said Benton. He also noted that Sunoco has refineries on both sides of the Delaware River. Guess which side would get all the business if the New Jersey unit were to be charged a tax that didn't apply to the Pennsylvania unit.
McGreevey has promised that the tax, however it is formulated, will be dropped if prices go up at the pump. That's a tough test. Prices are likely to go up even without the tax, said Fred Rozell of the Oil Price Information Service, the national authority on gas prices, located in Lakewood.
"Late August is a good bet to see the highest prices of the year," said Rozell. The new tax, if adopted, would take effect July 1. So McGreevey might unfairly get the blame for the price hike even if he somehow manages to craft a bill that raises every cent of that $150 million out of state.
I don't think that can be done, but I may change my mind when I see the wording of the bill. Perhaps McGreevey will find this Holy Grail of taxation. Perhaps he will be the first politician to actually tax that fellow behind the tree.
But somehow I think the tax will fall on you and me.
miserable failure miserable failure miserable failure miserable failure waffles
Maybe all these shaningans is helping Bush's poll numbers in NJ. Bush is doing pretty good in a state that has become a Demo stronghold.
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