The statewide gas tax goes down Oct. 1, by 8.3 cents to 42.4 cents per gallon. It comes after the COVID-19 pandemic shut down travel last year, driving up the tax rate by 9.3 cents per gallon.
Under a bill former-Gov. Chris Christie signed in 2016, the tax goes up if fuel consumption drops, and it goes down if more people are buying gas. The proceeds go toward the $16 billion state Transportation Trust Fund, which lasts eight years and pays for road, highway and bridge projects throughout the state. State officials announce each August whether they will increase or decrease the tax, which takes effect Oct. 1 each year.
The average driver spends $3.22 at the pump in New Jersey, compared to a nationwide average of $3.192 per gallon, according to data from AAA.
With stay-at-home orders, bans on non-essential travel and overall anxiety about public health, travel and, by extension, gas consumption cratered in 2020, driving up the tax rate. At that time, State Treasurer Elizabeth Maher Muoio and her boss, Gov. Phil Murphy both stressed that because of the legislation Christie signed, their hands were tied and they were unable to prevent an increase.
Murphy – who is facing reelection in November – 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 determined by 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.
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 be filled up at the pump.