Job creation, not taxation, is the key to turning around New Jersey's struggling economy according to Paul Sarlo (D-Wood-Ridge), chairman of the state Senate Budget Committee. But Sarlo feels that raising the gas tax is a must for improving the state's decaying roads and bridges.

(Dan Alexander, Townsquare Media NJ)

"The governor always said, 'We do not have a revenue problem, we have a spending problem,'" Sarlo said. "I think he's wrong on that. We have a revenue problem. Clearly we have a revenue problem, and I don't believe we should tax our way out of these problems so I'm not going to stand here and say we need to do tax increases."

Rather than taxing our way out of a bad economy, Sarlo said the state needs to focus on job creation and job growth. However, prior to Wednesday's Senate budget panel hearing, Sarlo did concede that he backs at least one tax increase.

"For transportation, the Transportation Trust Fund, listen: I've been outspoken on that," Sarlo said. "You need to do some type of user fee (or) gas tax. Whether it's a user fee or a gas tax, that's how we need to pay for transportation. I support a gas tax. I've been very outspoken on that."

Legislation already introduced by Sen. Ray Lesniak (D-Union) would increase the gas tax by five cents per gallon every year for three years. Sarlo would not say whether he supports or opposes that specific proposal.