4.3 Cents a Gallon to be Tacked on to 2016’s 23-Cent Bump
The October 2016 legislation that increased New Jersey’s gasoline tax by a whopping 23-cent per gallon is the gift that keeps on taking.
Much media attention was paid to the bill that month, noting the gas tax increase would be somewhat ameliorated by a reduction in the sales tax rate from 7 percent to 6.625 percent by 2018, the phasing out of the state’s estate tax, provisions to exclude more retirees from state income taxes, an increase in the Earned Income Tax Credit for the poor and a new $3,000 state income tax exemption for veterans.
But there was no media reporting on another clause in the legislation that allowed for further increases in the event the gasoline tax didn’t produce $2 billion a year to the Transportation Trust Fund that pays for road and rail projects in the Garden State. The law requires the state treasurer to increase the tax rate if collections fall short.
They have. The $2 billion mark was missed by $43 million in the fiscal year that ended in June 2017 and by $125 million this June. So the administration of Gov. Phil Murphy is going to tack on 4.3 cents per gallon to the motor fuel tax starting Oct. 1. New Jersey motorists will now pay 41.4 cents of taxes for each gallon of gasoline they purchase; truck drivers will pay 48.4 cents per gallon of diesel.
The original 23-cents increase – the first since 1998 – resulted in a decrease in consumption, especially along the New Jersey-New York border where Empire State motorists, highly taxed themselves, used to cross over into the Garden State to fill up to take advantage of what was then the second-lowest gasoline tax in the country. The increase brought the prices at New Jersey pumps more in line with that of New York’s, making the drive to New Jersey no longer an economic winner. Because the 23-cent increase was based on 2016 consumption, additional revenue was needed for the TTF.
According to the American Petroleum Institute, New Jersey will now have the ninth-highest state gasoline tax in the country.
The New Jersey 9th Legislative District team of Sen. Christopher J. Connors and Assemblypersons Brian E. Rumpf and DiAnne C. Gove, who represent all of Southern Ocean County and which had voted against the 2016 increase, quickly attacked Murphy’s decision to bump the tax.
“Despite the financial hardships this regressive tax will impose, particularly on middle class families and seniors, no one should be surprised the revenue-starved state is reaching further into taxpayers’ pockets,” read a 9th District statement. “Without hesitation, our delegation broke with former Governor Christie by opposing the original 23-cent per gallon tax increase, because we knew that our constituency would be disproportionately impacted.
“Our delegation remains consistent in our opposition, regardless of the New Jersey Department of Treasury’s decision to support a tax increase based on a review of fuel consumption levels. This is due to the fact that we proudly represent a commuting constituency with a large senior population.
“When will Trenton finally recognize that too many residents are simply unable to afford to live in this overtaxed state?”
— Rick Mellerup