Beginning in October, the Garden State’s gas tax rate will increase by just under 1 cent per gallon, or 0.9 cents.
The announcement was made Sept. 1 by the Treasury Department, which says that the move brings the state in line with a 2016 state law requiring a steady stream of revenue to support the Transportation Trust Fund (TTF) program.
The TTF is required to provide roughly $16 billion over eight years to support critical infrastructure improvements. To hit that threshold, the law dictates that the Petroleum Products Gross Receipt tax rate must be adjusted accordingly to generate those funds.
“What is generally called the ‘gas tax’ or the ‘highway fuels tax’ is actually two separate taxes on gasoline and diesel fuel – the Motor Fuels tax and the Petroleum Products Gross Receipts (PPGR) tax,” the Treasury Department said in a press release. “Under the formula explicitly outlined in the 2016 law, the PPGR tax rate will increase on Oct. 1, 2023, from 30.9 cents 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 fixed at 10.5 cents for gasoline and 13.5 cents for diesel fuel, the total rates that motorists will pay for gasoline and diesel fuel will be 42.3 cents and 49.3 cents, respectively.”
The Treasury Department says that the annual review process was conducted in August by Treasurer Elizabeth Maher Muoio in consultation with the Legislative Budget and Finance Officer (LBFO) Thomas Koenig.
“Because actual consumption in Fiscal Year 2023 was slightly below our projections made last August, primarily due to lower diesel use, and because consumption in the current fiscal year is projected to be just above last fiscal year’s levels, our analysis of the formula dictates a 0.9 cent increase this coming October,” said Muoio. “As mandated by the 2016 law, this dedicated funding stream continues to provide billions of dollars across the state to support crucial transportation infrastructure needs.”
The Treasury also put out some of its consumer and revenue projections as well as supporting stats and rationale for the slight increase, which can be found here.