New Jersey's Gas Tax To Stay Flat In 2020
New Jersey’s tax is currently the 11th highest in the nation, and well behind its northern and western neighbors, Pennsylvania and New York, according to data published by the conservative Tax Foundation.
TRENTON — Motorists will be spared from another increase in New Jersey’s gas tax.
The state treasurer announced Wednesday that the rate will remain at 41.4 cents a gallon for the coming year, after rising 4.3 cents last October and 23 cents in 2016.
New Jersey’s tax is currently the 11th highest in the nation, and well behind its northern and western neighbors, Pennsylvania and New York, according to data published by the conservative Tax Foundation.
New York’s 49.7-cent tax is the seventh highest in the nation and Pennsylvania’s 58.7-cent tax is the second highest, behind only California’s 61.2-cent tax.
The announcement that New Jersey’s rate would remain stable came after a state review of fuel consumption data by both the Department of Treasury and the nonpartisan Office of Legislative Services to determine if the existing rate is high enough to generate the close to $2 billion in annual revenues needed to support the state’s transportation trust fund, which is its main mechanism for financing highway and bridge repairs and transit projects.
A 2016 law that initially raised the gas tax 23 cents also required the annual review to ensure that the tax generates a steady revenue stream for the fund. If gas consumption drops, the law requires the rate to rise automatically to compensate.
Prior to the 2016 law, changes to the tax had to be approved by the state Legislature and governor.
Last year’s 4.3-cent hike was the result of declining fuel consumption and earlier this year the Office of Legislative Services warned that another increase was possible due to continued consumption declines.
State Treasurer Elizabeth Maher Muoio said Wednesday that gas consumption was expected to dip around 3% during the current fiscal year but that the 41.4-cent tax should still generate the revenues required for the trust fund.
“We’re pleased that fuel consumption levels, coupled with our realistic projections last year, have allowed us to avoid an increase in the gas tax rate for this year,” Muoio said Wednesday. “This dedicated revenue stream has enabled us to disburse billions in funding across the state to bolster our transportation infrastructure and keep New Jersey moving forward.
Gov. Phil Murphy inherited the gas tax law from his predecessor, Republican Chris Christie. Since its enactment, the state has disbursed billions on transportation projects, including close to $1.5 billion in aid to local governments for local projects. Earlier this month, Burlington County learned it would receive $10.2 million in state funds to improve roads and bridges, the fourth highest allocation in the state.
In addition to raising the gas tax, the 2016 law made several other tax changes, including a boost in the earned income tax credit for the working poor, the phase out of the state estate tax and an increase in the retirement exemption for seniors. It also included a small sales tax decrease and a $3,000 income tax exemption for veterans that was increased to $6,000 this year.