Despite fears around a sluggish travel rebound, administration officials announced that gasoline consumption has been high enough that the state will not have to increase the gas tax this fall.
Instead, motorists will see the surtax drop 8.3 cents, meaning they’ll pay 44.2 cents per gallon at the pump, down from the current 50.7 cents, starting Oct. 1.
“Because actual consumption in Fiscal Year 2021 was so closely in line with our projections made last August, coupled with the fact that consumption in the current fiscal year is projected to be above last fiscal year’s levels, our analysis of the formula dictates an 8.3 cent decrease this coming October,” reads a statement from State Treasurer Elizabeth Maher Muoio.
Former Gov. Chris Christie signed the gas tax increase in 2016, which dictates that the tax increases if fuel consumption decreases, and vice versa.
This reality came to be true during the worst of the pandemic last year, when bans on non-essential travel, restrictions on businesses, and overall travel anxiety, in turn cratered gas collection. That led to an increase of 9.3 cents a gallon.
Muoio and her boss, Gov. Phil Murphy – who is facing reelection in November – both stressed last year that because of the legislation, their hands were tied and they were unable to prevent an increase.
The funds are used to finance the state’s $16 billion Transportation Trust Fund, which lasts eight years and pays for road, highway and bridge projects throughout the state.
Murphy said last year that he was “open” to redoing how the gas tax is calculated, but maintained that he has little if nothing to do with the increase in the tax.
“Am I open-minded down the road to reassessing how it’s calculated?” Murphy said. “As long as we can keep the TTF viable and again, the prior administration allowed it to go bankrupt.”
One proposal floated in March by the nonprofit Eastern Transportation Coalition calls for enacting a mileage-based user fee based on how many miles a motorist has driven.
Any changes to how the gas tax is calculated would need to pass out of the state Legislature and then be signed into law.
But as more electric cars, hybrid and fuel-efficient vehicles make their way onto New Jersey roads, transportation officials and lawmakers have eyed how to recapture lost revenue from gas that might not need to fill up at the pump.