NJ Drivers Brace For Gas Tax Hike This Weekend

In just a few short years, New Jersey has gone from having one of the lowest gas taxes in the nation to among the highest.

Drivers are bracing for another increase which goes into effect on Sunday.

A New Jersey law from 2016 requires the state to collect roughly $2 billion in gas tax funds per year in order to replenish the state's Transportation Trust Fund.

In order the generate that revenue, The Department of the Treasury announced the per-gallon tax for gasoline would rise about one cent to 31.8 cents for gasoline and from 34.9 cents to 35.8 cents for diesel fuel.

When combined with the Motor Fuels Tax, which is at a fixed rate, motorists at the pump will pay a 42.3-cent tax for gasoline and a 49.3-cent tax for diesel fuel.

As of July 1, New Jersey had the seventh-highest gas tax rate in the nation, according to Tax Foundation. States' rates range from 9 cents per gallon to 78 cents per gallon.

Chris Christie raised the gas tax

In 2016, then-Gov. Chris Christie muscled through legislation to link the gas tax to the fund that pays for road and bridge repair.

It was an enormously unpopular scheme that immediately raised the gas tax by more than 26 cents per gallon.

Prior to signing the legislation, New Jersey's gas tax was set at 14.5 cents per gallon. It had not been raised since 1988.

The legislation also created a formula that mandated $2 billion dollars per year be collected from the gas tax.

If collections fall short, the Department of the Treasury must adjust the gas tax upward to ensure the revenue meets the target.

Conversely, if more than $2 billion dollars is raised, the gas tax has to be lowered.

The rate fell by a penny in October 2022, after dropping by more than eight cents in 2021. New Jersey's gas tax increased by more than 9 cents in October 2020, after going unchanged in 2019.

Gas prices have also been rising

The increase in the gas tax, and costs to drivers, was made worse by rising gas prices shortly after the law was enacted.

In 2016, the average cost for a gallon of regular gasoline was $2.14.

As we headed into the pandemic, gas prices had spiked to nearly $5.00 per gallon. The extreme increase had triggered several efforts to reduce or suspend New Jersey's gas tax to give drivers a break, but no legislation was ever enacted.

While gas prices have come down a bit in recent weeks, the average cost to New Jersey drivers as of Friday was $3.65, according to AAA.