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New Jersey Set to Increase Gas Tax

Lawmakers in New Jersey approved a 23 cents-a-gallon increase on gasoline in order to pay for much-needed transportation projects and end a statewide construction freeze. It is the first increase in taxes on gasoline in the state since 1988, according to the National Stone, Sand and Gravel Association (NSSGA).

The new tax may take effect this month and will be offset by a sales tax reduction – from 7 percent to 6.875 in 2017 and 6.625 percent in 2018. The tax will finance an eight-year, $16 billion transportation program that Gov. Chris Christie said will improve the state’s infrastructure and economy. Christie still has to sign the bill, which will go into effect on Nov. 1 or two weeks after the bill is signed, whichever is later.

New Jersey is one of several states evaluating different methods of increasing their transportation trust funds in 2016. This summer, 14 other states began focusing on mileage-based user fees instead of gasoline taxes.

“It is encouraging to see that states continue to work out ways of paying for transportation projects. It is unpopular to raise taxes, but it seems like New Jersey lawmakers understand the importance of investing in infrastructure,” said Michele Stanley, NSSGA director of legislative and government affairs.

NSSGA continues support increasing the national motor fuel user fee as a short-to-medium term solution. “It will be difficult to do at the national level, given the current political realities, but NSSGA will continue to ask Congress to come together and find a sustainable way of addressing the Highway Trust Fund shortfalls with a durable solution,” Stanley said.