There is a political battle shaping up in Morris County between two incumbent Republican elected office holders. One, a county freeholder, is a young idealist, who decided on the political life before he was scarcely out of childhood. The other, a state legislator, came to elected politics later in life, after the death of her husband, having long played a secondary role serving constituents, in addition to those of wife and mother. The county freeholder wants to advance. The state legislator is in his way.
The lever the freeholder is looking to use to displace the legislator is her vote on something that has become known as "the gas tax."
The phrase "no gas tax" is thrown around by some the way "no guns" is by others. Both are cynical appeals to raw emotion, designed to replace the reasoning process with the red haze of anger. Those who use it conjure anger so that they can direct it as hate towards their targets.
George Orwell warned against such simplistic "renunciations," which he found were a commonplace of "perfectionist" ideologies. Orwell sought to unmask them as "simple bids for power" served up for consumption by those who cannot accept the inherent imperfections of the world-- or in Orwell's words, "solid earth." He warned against the "totalitarian tendency" of movements like anarchism and pacifism which aim to establish purity of motive as the sole basis for political action. Orwell wrote:
"For if you have embraced a creed which appears to be free from the ordinary dirtiness of politics -- a creed from which you yourself cannot expect to draw any material advantage -- surely that proves you are in the right? And the more you are in the right, the more natural that everyone else should be bullied into thinking likewise."
Of course, the operative word here is "appears." Readers of Animal Farm will recall the pigs' diktat that "all animals are equal, but some animals are more equal than others." The "purity of motive" evaporates with the accumulation of political power.
By its very nature, representative democracy is not a pure undertaking. The founders of our Republic saw it as a struggle between competing interest groups, which shifted based on the issue at hand and changed over time. The process was meant to be slow, deliberative, so that emotional appeals to mob psychology (and its attendant vice, mob violence) would not carry the day, under cover of law. Those who claim to hate "compromise" are really telling us that they hate representative democracy. That they hate the Republic.
Today our Republic is under assault from the unbridled emotions of the Far-Left and Alt-Right. In place of compromise, they preach "totalism" -- an unAmerican sin warned against by that great civil rights activist and author, Lillian Smith, who wrote:
“We must avoid the trap of totalism which lures a man into thinking there is only one way, one answer, one option, and that others must be forced into this One Way, and forced into it Now.”
And so we come to that curious phrase, "the gas tax."
In the first place, there was no vote on something called "the gas tax." It never happened. The vote was actually on a Tax Reform bill numbered S-2411/A-12 that included five tax cuts and an increase in the tax on gasoline.
S-2411/A-12 was the result of more than two years of negotiations between Republicans and the majority Democrats who control both Chambers of the Legislature. Those negotiations were conducted under pressure, with the knowledge that in modern times no political party has controlled the Governor's office for more than eight years. Republicans are now into their eighth year.
The Republican negotiators, led by Senator Steve Oroho and Assembly Leader Jon Bramnick, understood that all that stood in the way of the Democrat majority imposing a 40-cent increase on the gas tax -- with NO tax cuts -- was Republican Governor Chris Christie. They understood that the clock was ticking.
This was real world stuff. Not the theoretical perfection preached on Facebook by people who have never been to Trenton, have never participated in the legislative process (by testifying or anything else), and whose biggest negotiation had to do with who was going to sit next to Old Uncle George at Thanksgiving.
Though always-outnumbered, Oroho and Bramnick negotiated a package of tax cuts worth $1.4 billion that included the following:
- A tax cut on retirement income that means most New Jersey retirees will no longer pay state income tax. This tax cut is worth about $2,000 annually to the average retiree.
- Elimination of the Estate Tax. This protects family farms and small businesses from being forced to choose between paying taxes or closing and laying-off workers.
- Tax cut for veterans. Honorably discharged active duty, guard, and reserve veterans now get an additional $3,000 personal income tax deduction.
- Tax credit for low-income workers. Worth $100 annually to the average worker.
- Sales tax cut. Worth another $100 annually to the average consumer.
- Property tax relief. The legislation doubled the amount going to county and municipal governments to repair roads and bridges and so offset property tax increases.
So S-2411/A-12, the Tax Reform legislation -- the bill some people simply call "the gas tax" -- actually cuts taxes by $1.4 billion.
And that is why leading conservative organizations have praised the passage of the tax cuts in S-2411/A-12. The Tax Foundation -- since 1937, America’s leading independent, conservative, pro-business tax policy think tank -- gave Senator Steve Oroho an award for negotiating the tax cuts in S-2411/A-12.
Americans for Prosperity (AFP) noted that the tax cuts will save taxpayers $1.4 billion -- with the repeal of the estate tax saving taxpayers $320 million alone. AFP called the tax cuts a "big win," a "big accomplishment," and a "victory." Americans for Tax Reform (ATR) issued a statement noting how S-2411/A-12 "abolished the state death tax, cut the state sales tax and reduces income taxes on retired New Jersey voters." ATR called it "a victory for taxpayers." Forbes magazine weighed in, calling the tax cuts one of the "5 best state and local tax policy changes of 2016" nationwide.
So there's $1.4 billion in sugar. How about the medicine?
The "medicine" in the Tax Reform legislation was a 23-cents a gallon increase in the tax on gasoline -- negotiated down from the originally discussed 40-cents a gallon increase.
By any objective standard, this "medicine" was long overdue.
The gas tax is a classic "user tax." This is a tax imposed on someone who chooses to access a service or facility. With a user tax, someone pays for something he or she wants and receives what he or she has paid for. So if you want to use New Jersey's roads and bridges, you pay for them through a tax on gasoline.
Conservatives believe that user taxes represent a "fair exchange" and that they differ from other taxes, which are paid by force or coercion and do not necessarily go towards a specific service or facility that someone actually uses or benefits from. Property taxes are largely used to fund public education, regardless of whether or not the taxpayer has children using the public education system. Property tax is not a user tax. Conservatives view "progressive" taxation -- such as a graduated income tax -- as the most pernicious form of taxation, because it is a disincentive to hard work and a penalty for self-advancement.
In New Jersey, the user tax to fund the state's transportation infrastructure -- a fancy word for roads and bridges -- is the tax on gasoline (and other motor vehicle fuel). This user tax had not been adjusted for inflation since 1988. That's five Presidents ago -- back when Ronald Reagan was in office.
For the record, these are the adjustments for inflation that should have triggered increases in the gasoline tax, year-by-year, since 1988: 4.0% in 1988, 4.7% in 1989, 5.4% in 1990, 3.7% in 1991, 3% in 1992, 2.6% in 1993, 2.8% in 1994, 2.6% in 1995, 2.9% in 1996, 2.1% in 1997, 1.3% in 1998, 2.5% in 1999, 3.5% in 2000, 2.6% in 2001, 1.4% in 2002, 2.1% in 2003, 2.7% in 2004, 4.1% in 2005, 3.3% in 2006, 2.3% in 2007, 5.8% in 2008, zero in 2009, zero in 2010, 3.6% in 2011, 1.7% in 2012, 1.5% in 2013, 1.7% in 2014, zero in 2015, and .3% in 2016.
But instead, New Jersey's gas tax remained at 14 1/2 cents since 1988.
Why? Well, it's a matter of governance. The gas tax was set about the time that New Jersey was suffering a bout of escalating property taxes that would end by leaving it the state with the highest property taxes in America. The political class in New Jersey could have addressed the state's high property taxes by taking on the state's legal lobby -- in particular New Jersey's unelected Supreme Court. It is the State Supreme Court, after all, who seized the revenue from the imposition of the state income tax and -- in a classic bait and switch -- used the revenue that was promised to go towards property tax relief to instead subsidize urban gentrification.
This expropriation by the Court of revenue that is properly under the purview of the elected Legislature has resulted in what we have today -- the most unequal state education funding formula in America. One that sees half the state's impoverished children ignored, while the income tax money from poorer working families in rural and suburban New Jersey goes to subsidize the property taxes of wealthy professionals and rich corporations in places like Hoboken and Jersey City. Meanwhile these poor working families pay the highest property taxes in America.
It is a corruption of natural law, undemocratic, and cries out to be addressed but the political class in New Jersey is so fearful of the legal lobby and its unelected Court, that there are not enough members of the elected Legislature willing to take on the battle. Some have tried and notable among them have been Senators Mike Doherty and Steve Oroho, Assembly members Alison Littell McHose and Parker Space, and Freeholder Ed Smith of Warren County. Smith scared the wits out of the legal community when he argued that because attorneys are officers of the Court, it was a conflict of interest for them to hold office in the elected Legislature.
Instead of addressing its "highest in America" property taxes, New Jersey's political class played Santa Claus with the gas tax. While every other state in America raised its gas tax to keep up with inflation, while President Ronald Reagan doubled the federal gas tax to keep up with inflation, New Jersey kept the gas tax cheap by burying its children and grandchildren under layer upon layer of debt.
From a conservative point of view, this was bad for three reasons:
- First, the gas tax is a user tax and that is a fair way to tax, relying on debt instead of a user tax pushes the cost on to other, less fair, means of taxation such as the sales tax.
- Second, because the TTF funded so many county and local projects (where the only alternative means of funding them are increased property taxes), the less stable the TTF became the more real the threat of a property tax explosion became.
- Third, because the gas tax wasn't adjusted for inflation for 28 years, the gas tax wasn't set at the proper level to collect revenue from those out-of-state drivers who used it. In effect, out-of-state drivers were being subsidized by the taxpayers of New Jersey.
How big was the subsidy paid by New Jersey taxpayers so that out-of-state drivers could use their roads and bridges? In just one year, that subsidy was $500 million. If the gas tax had not been raised, that subsidy would have extended, over time, to $25 billion!
But it was very popular for the political class to tell voters that "you might have the highest property taxes but you have one of the lowest gas taxes." If the subliminal message was "live in your car" then it has been a wild success, what with the state's high foreclosure rate.
Of course, having one of the "lowest gas taxes" was a lie. The roads and bridges dependant on the revenue from the gas tax weren't being maintained and the Transportation Trust Fund (TTF) was left to tread water on borrowed money. The gas tax wasn't, in reality, low -- the tax was just being passed on to the backs of their children and grandchildren, in the form of debt, to be paid later.
The last time the gas tax produced enough revenue to pay for New Jersey's transportation needs was in 1990. Because of the debt that was allowed to accumulate, by 2015 the annual cost of that debt to taxpayers was $1.1 billion -- outstripping the $750 million revenue from the gas tax. At the beginning of last summer, the TTF couldn't make its debt payments. By the end of the summer, it was broke.
Everyone knew that something had to be done (1) because in a modern industrial society roads and bridges are pretty much a basic necessity, and (2) because without funding from the TTF, local governments would have to raise property taxes by an average of more than $500 a household just to make up for the lost aid to keep county and local roads safely maintained. And if county and local governments failed to repair roads and bridges and allowed people to use them anyway, the eventual cost in litigation to cover the injuries sustained as the result could vastly outstrip the costs to maintain them in the first place.
And still many in the political class found themselves in a real dilemma. Newer legislators asked older ones how did they let it get so bad and wanted to know why it was necessary to raise the gas tax by 23-cents in one whack. The answer was simple: The first 11-cents of the increase was needed just to cover the debt service on all that money the state had borrowed since 1990 to keep up the illusion that you could have something for nothing.
It was most unbearable to hear these questions posed by those who had been around for a while -- people like Senators Ray Lesniak and Kip Bateman. To see why the gas tax had to go up 23-cents a gallon they need only look into a mirror. 23-cents a gallon, all in one hit, is what you get when politicians suspend the iron rules of economics and tell people that they can have something for nothing. This is what happens when you don't adjust the cost of something for inflation. Any business would have gone bankrupt.
Enter the Alt-Right.
The history of radio and the first rise of totalitarian regimes is intertwined. Radio was the means to reach and to incite truly "mass" audiences. Broadcasting turned oddball regional movements into national and international powers.
NJ 101.5 radio host Bill Spadea could be described as one of the founding fathers of the Alt-Right. It will be recalled that it was Spadea -- way back in the early 1990's -- who urged the formation of a far-right alternative to the Republican Party. And he did so, not from the bleachers, but as a prominent voice from within the GOP. Spadea ran the College Republican National Committee. In 1995, the Republican National Committee cut off all funding to Spadea's group after it paid for advertisements that attacked Republican presidents Ronald Reagan and George H. W. Bush and suggested that the GOP be replaced by a party resembling what has today become known as the Alt-Right.
Bill Spadea was new to radio, having replaced the popular Jim Gearhart in November 2015. He wanted to make a big splash, attract listeners, and increase revenue for the for-profit corporation that owns NJ 101.5. That these goals merged seamlessly into his pre-existing ideology was, for Spadea, a happy case of serendipity.
Spadea's radio show, the largest drive-time radio show in the central part of the state, was the means to get out his message. He was ready to play impresario, but he needed a diva to be the face of the message. First he road-tested the ever unreliable Senator Jennifer Beck. But she was too independent and refused to take direction. Meanwhile, Bill Spadea was stoking the fires of a renunciation with one-sentence policy prescriptions, preceded by a hashtag.
Following the Alt-Right playbook, the message was vaguely populist, anti-government, and Nihilistic. It offered no prescriptions on how to actually address any of the real problems in any meaningful way. In place of policy it offered the anarchic slogan of "government-sucks."
To settle some personal scores, Spadea was able to focus anger against those members of the GOP who had failed to support his political ambitions for higher office -- a failed run for Congress in 2004 and for the Assembly in 2012 (the latter was such a bitter disappointment that he rarely mentions it). Those who know him know that Bill Spadea nurtures grievances and never forgets.
Spadea's message was not anti-establishment. Indeed, he trotted in a line of members of the GOP establishment who told him what he wanted to hear, and in return, he would lavish praise upon them. Nobody had ever elected Bill Spadea to anything, but that didn't stop him from bestowing his blessing on actual elected officials, in the name of his "listeners" or "taxpayers" or "the people".
Far-Left legislators like Democrats Senator Ray Lesniak (American Conservative Union lifetime rating: 0%) and John Wisniewski (American Conservative Union lifetime rating: 0%) were welcomed by Spadea and received lavish praise for opposing the "gas tax" -- when what they were actually opposing was the Tax Reform bill S-2411/A-12 with its five tax cuts! But that didn't matter to Spadea, who promptly anointed these lefties as "good guys."
Bill Spadea even scared some people who should have known better, like conservative Assemblyman Jay Webber. It was Webber who advocated, in 2014, that New Jersey should increase the gas tax while "fixing transportation and taxes together." Webber's prescription was to raise the gas tax, while offsetting that tax increase with cuts to other taxes -- and he specifically zeroed in on the estate tax. But faced with a deluge of Alt-Right pressure, Webber got into line with the simplistic slogans of Spadea. After all, who wants to get a primary from the Alt-Right?
Spadea was still searching for his diva when, last October, Lt. Governor Kim Guadagno abruptly reversed her formerly pro-Tax Reform position in order to embrace the Alt-Right sloganeering of Bill Spadea. The manner in which a major establishment figure like the Lt. Governor was flipped into the Alt-Right net is instructive. It had been very long in the making, with Spadea specifically targeting Guadagno immediately after getting his gig with NJ 101.5.
We will examine just how Bill Spadea flipped the Lt. Governor in our next installment.