NJ Unlikely to Heed Biden’s Call for Gas Tax Suspension
As President Joe Biden plans to work with Congress to suspend the federal gas tax, he will also pressure individual states to do the same.
That is unlikely in New Jersey.
Biden has been under increasing pressure to provide Americans relief from record high gas prices, but has struggled to come up with solutions. In recent days, he has publicly chastised oil companies for restricting refinery capacity and inflating prices.
If Congress goes along with the national gas-tax holiday, it will provide immediate relief to pump prices that have hovered around $5 a gallon for weeks.
The federal gas tax is 18.4 cents on gasoline and 24.4 cents on diesel. Biden would like to suspend both taxes through September.
Diesel has been tracking at over $6 per gallon and has impacted the prices of nearly all things consumers buy.
New Jersey drivers would see pump prices drop around 18 cents per gallon but remain above $4.50, still about $1.50 higher than a year ago.
At 42.4 cents per gallon, New Jersey has one of the highest state sales taxes on gasoline in the U.S.
If New Jersey did enact a gas-tax holiday to coincide with the federal action, New Jersey drivers could save 60 cents per gallon, dropping prices to nearly $4 a gallon.
Despite multiple efforts proposed by lawmakers, Gov. Phil Murphy has steadfastly refused to support suspending New Jersey's gas tax. He has said any such tax suspension should come from the federal government. "They can print money, we can't," Murphy said.
State Sen. Shirley Turner, D-Mercer, has proposed rolling back the state gas tax to the 2016 rate of 14.5 cents for 60 days. That would save drivers 27.7 cents per gallon, or 46 cents per gallon when combined with the federal gas tax suspension. Turner's bill would also roll back a portion of the Diesel fuel tax.
Turner is not the only lawmaker to propose relief from record-high gas prices, either through a gas tax rollback or rebates.
Assm. Raj Mukherji, D-Hudson, proposed direct rebates of between $400 and $800 for all drivers.
Sen. Ed Durr, R-Gloucester, has proposed tax credits of between $250 and $500, using excess tax collections to pay for it.
Gasoline retailers have also been pushing for an end to the ban on self-serve gas, saying it could reduce prices by more than 10 cents per gallon.
Durr's proposal is the only one that has generated interest from Murphy, who said he was "open" to the idea.
No action has been taken in the legislature on any of the measures above. Only Turner's bill had been scheduled for a hearing, but not a vote.
It is unlikely pressure from President Biden will change Murphy's mind, even though tax holidays have been successful in other states.
Biden is hoping to provide some immediate relief from fuel prices while his administration works on a long-term strategy that includes increasing refinery capacity.