New Jersey’s Gas Tax Rises 4.3 Cents a Gallon Monday
If you notice an increase in the cost of a gallon of gasoline Monday, about 4 cents of that is because of a hike in the state’s gas tax.
The 22.6-cent increase approved two years ago allows for yearly increases if the state’s collections go down – and that could happen each year through 2026. Collections were $125 million short of the goal last year, so the tax is rising 4.3 cents.
Assemblyman Jay Webber, R-Morris, said the automatic tax increase is an outrage. He has proposed a bill that would require the Legislature to directly approve future changes, rather than run them through a formula that hinges on gas sales over the past year.
“How come it always seems in New Jersey that it’s heads, the tax takers win, and tails, the taxpayers lose? That’s what they’ve set up and it needs to stop. It needs to change,” Webber said.
That seems unlikely to be approved, given that the law was designed with the prospect for future increases in mind, to ensure the state a guaranteed stream of money to help fund $2 billion a year in road, bridge and transit capital projects.
“We can’t put tax increases on autopilot and expect that’s going to be OK with the people of the state of New Jersey,” Webber said.
Senate President Steve Sweeney, D-Gloucester, said the increase will have an impact. But he noted that the tax could go down after a year in which gas consumption increases.
“It was designed that it could do it either way. If there’s more people driving and consuming more gas, the gas tax would actually go down. It was designed that way to keep a level funding level,” Sweeney said. “You know, no one’s happy about it.”
Critics of the gas-tax increase say sales are down because prices are up. But more fuel-efficient cars, and alternative-fuel vehicles that don’t even use gasoline, are also a factor.
Sweeney said the Legislature is going to have to take a look at the impact electric cars are having on gas-tax collections.
“The reason for a gas tax is to maintain the roads,” he said. “And if you have cars that are running up and down the highway that aren’t using any gas at all, it’s wonderful for the environment, but it’s not fair to the people that are driving cars that do have gas.”
Sweeney says that’s a conversation for down the road.
“I’m not proposing anything, OK. Let me make it be clear,” Sweeney said. “But at some point they’ll have to discuss that.”
With the increase, New Jersey has the nation's ninth-highest gas tax, according to data published last week by the Tax Foundation. The tax is higher in California, Connecticut, Hawaii, Indiana, Michigan, New York, Pennsylvania and Washington.