The New Jersey gas tax will jump as the state says tries to dig itself out of a financial hole causes by the coronavirus crisis, officials announced on Friday.
The Department of the Treasury announced on Friday that lower fuel consumption trends, which have been exacerbated by the COVID-19 pandemic, will necessitate a gas tax increase of 9.3 cents per gallon. Due to the formula explicitly outlined in the law, the tax rate on gasoline and diesel fuel will increase on Oct. 1 from 30.9 cents to 40.2 cents for gasoline and from 34.9 cents to 44.2 cents for diesel fuel, officials said.
When coupled with the current 10.5 cent motor fuels tax rate on gasoline and the 13.5 cent rate for diesel fuel, the total tax rates for gasoline and diesel fuel will be 50.7 cents and 57.7 cents, respectively.
The tax will rise to comply with the 2016 law that requires a steady stream of revenue to support the state's Transportation Trust Fund program.
Under the 2016 law signed by Gov. Chris Christie, New Jersey's TTF program is required to provide $16 billion over eight years to support critical infrastructure improvements to the state's roadways and bridges, officials said in a press release.
In order to ensure the state has the funds necessary to support these projects, the law dictates that the Petroleum Products Gross Receipt (PPGR) tax rate must be adjusted accordingly to generate roughly $2 billion per year, the release said.
"As we've noted before, any changes in the gas tax rate are dictated by several factors that are beyond the control of the administration," said state Treasurer Elizabeth Maher Muoio. "The law enacted in 2016 contains a specific formula to ensure that revenue is meeting a certain target.
The state legislature approved a plan four years ago to raise gas taxes by 23 cents, a Christie-backed plan that took effect Nov. 1, 2016. The state Senate voted 24-14 to approve the plan, while the state Assembly voted 44-27 to approve it, with nine not voting, soon afterward.
Read more: N.J. Gas Tax Hike: What You Need To Know
That year, the state's gas tax increased by 23 cents a gallon to 37.5 cents, an amount that was still less than the neighboring states of New York, Pennsylvania and Connecticut, according to supporters.
As part of the package, the sales tax was to be reduced by one-third of a penny over two years. On Jan. 1, 2017, the sales tax went from 7 percent to 6.875 percent. That was followed by a decrease to 6.625 percent on Jan. 1, 2018, for a total reduction of 0.375 percent.
"When it does not, the gas tax rate has to be adjusted accordingly in order for us to meet our obligation under the law and fully fund the state's many pressing transportation infrastructure needs," Muoio said. "Highway fuels consumption took a significant hit in FY 2020 because of the economic downturn caused by the COVID-19 pandemic."
Officials noted that consumption of gasoline declined by a total of 38.7 percent from March to May, while diesel fuel consumption declined by 16.5 percent. Consumption of gasoline and diesel fuel continues to be depressed as many people continue to work from home and limit extracurricular activity, officials said (patch)
The vaad told us in 2016 to vote yes for the gas tax because the trust fund will give money to widen Route 9. Turns out it was one big LIE. Not only is the state not widening it but the township and lakewood officials gave up the rights to ask the state to widen as a condition to get approvals for big development
ReplyDeleteShakranim.
Vote out the bums! It's time to clear house!
DeleteSo forst the politicians bankrupt small business then charge the citizens by raising taxes.
DeleteAnd some of us here in town stil think has our health and well being in mind.
Whoever trusted the Vaad then needs to have their heads examined. We should vote for a tax hike on ourselves ?? Based in a promise ? Totally crazy.
DeleteWe have been lied to repeatedly.
ReplyDeleteAlways do your own research
Dont let anyone tell you that Democrats care about the middle and lower income people. Democrats are running this state. A few months ago they allowed an increase in toll prices to occur and now they are increasing the gas tax by 10 cents a gallon! This hurts the middle and lower class!
ReplyDeleteThey made more on taxes before they increased taxes on gas because people from other states came to NJ to purchase gas, now nobody bother getting gas in NJ so much less gas is sold resulting in less revenue. so economics 101 - increase taxes = less revenue = less purchasing = everyone losing out.
thank you democrats!
Repeal this god-awful law! You're killing us with these endless taxes!
DeleteThank you Chris Christie! This one is yours.
ReplyDeleteInstead of putting the bridge and tunnel tolls in the empty of NYC subways, put it to lower this gas tax.
ReplyDeleteSame for turnpike and parkway tolls (also going up soon, it's a done deal).
Oh, they're also going to want another increase, cause turnpike and parkway usage (and bridge and tunnel) is down.
Funny, they didn't like lower tolls when usage went up.