Tax Return admin on 04 Jul 2007 11:34 am
New Jersey’s tax return
Boat/US Magazine
by Ryck Lydecker
Jump-starting the 2005 boating season with a bang, the state of New Jersey pumped $2.5 million into a model program that will improve access to the water, beef up safety on the water and rehab channels under the water. This triple-play approach to boating improvement was made possible by I Boat NJ, a grant program paid for by New Jersey boaters themselves through boat registration fees.
Developed over several years as a joint effort by the boating industry and the state Dept. of Transportation, I Boat NJ granted funds to 18 projects all around the Garden State on April 1. The projects range from launching ramp rehab and marina reconstruction to reuse of dredged material to boater education.
“It’s a great start but our state’s boating infrastructure has been neglected for so long that we’ll be playing catch-up for quite some time,” reports Melissa Danko, executive director of the Marine Trades Association of New Jersey. That’s the organization of boat dealerships, marinas, equipment retailers and related businesses that orchestrated the legislative campaign in 2002 that turned a lemon of a boating bill into lemonade for boaters.
Squeeze Play
“Our governor at the time, James McGreevey, proposed doubling the registration fees for recreational boats,” Danko says. “Well, we weren’t going to let that happen without a fight, unless, of course, we could get that money put back into boating.
“New Jersey, with over 200,000 registered boats, ranked 20th in the nation but not one nickel that boaters were paying–not registration fees, not sales taxes, not state gasoline taxes–was going into boating at the time,” says Danko. “It all went into the General Fund and we couldn’t tell how it was being used,” she notes.
Danko says the plan to double the fees, which then ranged from $6 for boats under 16 feet to $125 for boats 65 feet or longer, ostensibly would have been used for boating programs, but there was no guarantee that the money would actually be spent on boating. A cash-strapped state government could try to divert the money at any time.
Unlike broad-based taxes that are intended to support public services, the association argued, fees like boat registrations should be designated for a purpose related to the source of the money. That’s the position they started hammering home once a bill to increase the fees was introduced, and their rationale found supporters in both the state Senate and General Assembly.
Working with the association, state Sen. James Cafiero sponsored an amendment that directed the increased fees to the Dept. of Transportation’s Maritime Industry Fund. With the assistance of boating allies in the General Assembly, the amendment passed.
“This was the result of a major lobbying effort by boaters and the boating industry but without that amendment, none of the fee increase–about $2.5 million this year–would have gone back into boating,” Danko reported. “Presenting a unified position to the legislature was the key.”
Bills seldom pass without some form of compromise and this was no exception.
“The new law went into effect in 2003 and we agreed to a phase-in over three years while we developed a program to put that money to work,” Danko explains. “The first year, 50% of the new revenue went to the fund and last year the percentage increased to 75%. This year, and from here on, 100% of the registration fee increase goes back into boating.”
With that dedicated source of money, the I Boat NJ grant program is expected to average $2.5 million annually. But, Danko says, that’s not nearly enough and the association has to find new money to keep up with boating infrastructure demands.
Pay at the Pump
“Using federal gasoline taxes paid by boaters and anglers to fund a national boating and fishing program is a tried-and-true source of funding,” says BoatU.S. Vice President Michael G. Sciulla who has spent the last 20 years helping create the Wallop-Breaux Trust Fund which now directs $500 million to the states for their boating and fishing programs. “It’s a classic user-pay, user-benefit program,” says Sciulla.
There is now talk in Trenton of raising the state gas tax to fund long-suffering transportation needs. New Jersey’s largest newspaper, The Star-Ledger, is calling for the legislature to face up to the problem and increase the gas tax, now. Last year New Jersey’s governor called for a hike in the state’s 10.5-cent per gallon tax, one of the lowest in the country.
“This may offer an opportunity for New Jersey boaters to put to good use millions of dollars in boating gas taxes that are now going to build and repair highways,” Sciulla says, pointing out that 30 states now return a portion of their state gas tax to boating, ranging from .05% to over 1%. In New Jersey’s case, that could pump much needed money into boating.
New Jersey boaters who wish to be kept abreast of this issue should contact GovAffairs@BoatUS.com and put “NJ” in the subject line.
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