A 9.3 cent increase to the gas tax for motorists went into effect Thursday morning, after the state treasury announced the move on Aug. 28 following COVID-fueled record-drops in travel.
All told, motorists will have to shell out 50.7 cents a gallon beginning Oct. 1, which is deposited into the Transportation Trust Fund and in turn used to finance road, bridge, highway and other transportation projects across the state.
For months, a ban on all non-essential travel and public gatherings was in effect in New Jersey, causing gas consumption to fall 38.7 percent between March and May, the state Treasury said in its August announcement, “as many people continue to work from home and limit extracurricular activity.”
State Treasurer Elizabeth Maher Muoio, in the Treasury’s August statement, decried the 2016 gas tax law enacted under then-Gov. Chris Christie, a Republican.
It contains a “specific formula to ensure that [gas] revenue is meeting a certain target. When it does not, the gas tax rate has to be adjusted accordingly,” Muoio said.
Under the 2016 law – struck between Christie, Senate President Stephen Sweeney, D-3rd District, and then-Assembly Speaker Vincent Prieto – the gas tax increase to finance the Transportation Trust Fund lasts eight years and clocks in at $16 billion over its lifetime.
Lower gas consumption means the tax needs to go up. By contrast, if consumption rises, the tax goes down. The announcements are made each august by the state Treasury as to whether the gas tax will rise or fall.
“Any changes in the gas tax rate are dictated by several factors that are beyond the control of the administration,” the state treasurer said.
Gov. Phil Murphy said 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 on 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.”
Any changes to how the gas tax is calculated would need to pass out of the state Legislature and then be signed into law.