‘Buck a Truck’ provision aimed at warehouses: Does it make sense?

Governor’s budget proposal includes $1 excise fee aimed at trucks using warehouses

Among the things listed in the small print of Gov. Phil Murphy’s proposed budget for Fiscal Year 2025 was this: A $1 truck traffic excise fee that would be imposed on trucks coming and going from the state’s numerous e-commerce distribution facilities.

The details of the so-called “Buck a Truck” fee are not clear.

An administration official said the fee would be imposed on warehouses throughout New Jersey based on the number of truck trips.

Is it really a buck for each truck? That’s not clear.

The aim, the administration official said, was to “mitigate the impact of new warehousing development on traffic and road quality.”

That’s questionable, too.

At least, it is to the leaders of some business groups.

“E-commerce distribution is one of the leading growth industries in the whole state — one that includes Amazon, who is the state’s leading employer, and one that has saved the state in the past decade,” New Jersey Chamber of Commerce CEO Tom Bracken said.

“Why would we be doing anything to slow that?”

Reports are that the fee could raise an additional $10 million. A pittance in a $55 billion budget.

“It just makes no sense at all,” Bracken said.

It sounds a little bit like the misguided notion earlier in the decade, where some wanted to charge a small fee (a quarter of a penny) on electronic stock trades happening in the state.

That idea was sidelined when firms explained how easy it would be taking related jobs out of the state.

Christina Renna, the CEO of the Chamber of Commerce Southern New Jersey, worries the same impact could happen to her region, if the “Buck a Truck” tax goes through.

“Warehousing, distribution and logistics has been one of our absolute growing industries here in South Jersey,” she said. “Granted, it’s been big statewide, but in South Jersey, it’s especially a growth area because we have the space and the available workforce that’s needed.”

She notes Salem County, which not only is on the D.C.-to-New York corridor, but has connections to Philadelphia, too.

It’s a perfect landing spot — and one that already has to compete with Delaware and its famously low corporate taxes.

“How is doing this going to make New Jersey attractive to companies?” she asked, and then answered. “Companies who are currently actively looking at South Jersey have to be saying, ‘Now, we have another tax.’

“That’s not good for the state.”

Eric DeGesero, a spokesperson for the N.J. Motor Truck Association, said it’s not good for consumers, either.

“Everything we buy gets to the store or our front door via a truck, sometimes multiple trucks,” he said. “And at some point, the things we buy wind up in a warehouse.

“The governor is proposing a $1 fee on trucks that use warehouses. This is one more fee that will be passed on to consumers.”

DeGesero, as his way, used sarcasm to make a point.

“Why not a $1 fee on containers offloading at the port?” he asked. “How about a $1 check-out fee at the grocery store?

“In his speech, the governor discussed the cost of things like groceries. Higher tolls and higher fees are passed on to consumers and result in higher costs, like for groceries.”

Dan Kennedy, the new CEO of NAIOP New Jersey, got a firsthand look at how the business community can be used as a piggybank.

“The fee is a ‘tax on everything,’” he said. “It will impact the wallets of New Jersey residents, the cost of doing business in the state and the commercial real estate industry as a whole.”

Like the rise in minimum wage has impacted the cost of basic items, Kennedy feels the “Buck a Truck” proposal will do the same.

The fee will force New Jerseyans to pay more for practically everything they buy,” he said, “as most goods, whether they are purchased online or from a bricks-and-mortar store, pass through a warehouse in the supply chain.”

Kennedy may be new to the role, but he appears to be well versed in the age-old complaint: This “Buck a Truck” fee will impact New Jersey’s reputation.

“It has the potential to make New Jersey a less desirable place for future and current warehouse developments because it would be a ‘first-in-the-nation’ tax on warehouses,” he said. “This punitive approach only adds to New Jersey’s anti-business reputation.”