NJ revs up high gas tax
It was only a couple of years ago that New Jersey had the second-lowest gas tax in the nation — but, soon it’ll have the ninth highest.
The stunning U-turn began in 2016 when, faced with a running-on-fumes Transportation Trust Fund and crumbling infrastructure, the state Legislature raised the tax for the first time since 1988, from 14.1 cents a gallon to 37.1.
The hike came with a nowin condition: If revenues in the fund dropped below a predefined level, the tax could be increased to make up the difference.
As higher prices spooked drivers, gas-tax revenue fell short of its $2-billion-ayear goal by $43 million for the 2016 fiscal year and $125 million in 2017.
And so, on Thursday, Gov. Phil Murphy announced the state will hike the gas tax again — by 4.3 cents, to 41.4 cents. The increase takes effect Oct. 1.
By comparison, New York’s gas taxes add up to 45.76 cents per gallon.
According to the AAA, the average price of a gallon of regular gas on Tuesday was $2.87 in New Jer- sey and $2.99 in New York state. Nationally, the average was $2.83.
Experts warn that New Jersey’s pegging the tax to a predefined revenue number will create a situation where the tax continues to increase as more and more drivers avoid increasingly pricey pumps.
“The [customer] pool is going to get smaller every year, so that means the rate is going to have to get higher every year, which is going to cause the pool to get smaller,” Sal Risalvato of the New Jersey Gasoline Automotive Association told NJ.com.
State Sen. Christopher Bateman said he plans to introduce legislation to eliminate the automatic hikes.
“We’re just getting into this vicious taxing cycle,” he said. “What’s the limit? That’s the problem. There’s no ceiling.”
The state’s Treasury Department pointed the finger at the Christie administration for kicking the can down the road.