28 June 2016
The New Jersey Assembly voted early this morning for a 23 cent per gallon gas tax increase. Â If the Senate agrees and it is added to the existing 14.5% tax, NJ will have the seventh highest gas tax in the country, but still lower than New York and Pennsylvania.
Currently, New Jersey has the second lowest gas tax in the country, after Alaska. Â And we donâ€™t pump our own fuel.
New Jerseyans dodged a bullet. Â Lawmakers were considering a tax based on the sales price of the fuel, which would have risen as the price of gas does. Â And it will, inevitably.Â The low gas prices of 2016 have been just a blip, the result of a global economic slowdown. Â This proposal at least caps the tax.
The state consumes 10.8 million gallons of gasoline each day. Â Spread over New Jerseyâ€™s 8.9 million residents, the tax increase amounts to an average of $102 per person. Â Itâ€™s not spread evenly, though. Those who use mass transit wonâ€™t be hit hard by the tax, but should benefit by a renewed source of funding to their buses and trains. Â More than fifty percent of NJ Transitâ€™s operating budget is covered by subsidy. Â A ticket, in other words, covers less than half the cost of running the train or bus.
Lawmakers were pressed to find a solution for the failing state Transportation Trust Fund, which would have run out of money for projects in July.Â This fund is used for the state portion of state-federal projects, like the Gateway Tunnel. Â In the overall scheme, an additional billion for the Transportation Trust Fund isnâ€™t much, but it will attract more federal dollars. Â
As part of the deal, the Assembly voted to lower the state sales tax by a half of one percent in 2017 and another half a percent in 2018.Â The NJ Senate hasnâ€™t voted yet to put a bow on this deal. Â Nevertheless, itâ€™s expected this week with the tax taking effect Friday. Â Wow.Â Thatâ€™s brisk.Â And the sales tax reduction, if itâ€™s approved, wonâ€™t take effect for a while.