New Jersey Treasury: COVID-19 pandemic forces increase in state’s gas tax

The New Jersey State Treasury has announced that the state’s gas tax will increase by 9.3 cents per gallon starting on Oct. 1.

News 12 Staff

Aug 28, 2020, 6:45 PM

Updated 1,332 days ago

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The New Jersey State Treasury has announced that the state’s gas tax will increase by 9.3 cents per gallon starting on Oct. 1.
The increase means that tax on gasoline will increase from 30.9 cents to 40.2 cents per gallon, and from 34.9 cents to 44.2 cents for diesel fuel.
When combined with the current 10.5 cent Motor Fuels Tax rate on gasoline and the 13.5 cent rate for diesel fuel, the total tax rates for gasoline and diesel fuel will be 50.7 cents and 57.7 cents, respectively, according to the Treasury.
A 2016 law signed by then-Gov. Chris Christie states that the gas tax must increase when the revenues fall below a certain level. The law requires the state to take in roughly $2 billion per year in gas sales to fund transportation projects.
Democratic Assemblyman Roy Freiman serves on the Transportation Committee. He was elected the year after gas tax went through. He says that the idea of the gas tax law is counterintuitive.
“We need a better way of funding this important aspect because we have to maintain our transportation infrastructure,” he says.
He says that the pandemic is not a good time to be raising taxes, even if these transportation projects need to get done.
“When we were in the Great Recession, they talked about shovel-ready projects. That was the way to get the economy going again. So, it is a double-edge sword,” he says. “One hand, not the right time. This is a bad time to be increasing taxes. On the other hand, a fantastic time to get these construction projects moving.”
State Treasurer Elizabeth Maher Muoio says that the COVID-19 pandemic caused gasoline consumption to go down by more than a third between March and May. Diesel fuel use also decreased by 17%.


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