The NJ Gas Tax Is Going Up Almost A Penny On Sunday
The NJ Gas Tax Is Going Up Almost A Penny On Sunday - As of this Sunday, October 1, New Jersey's gas tax is set to increase by less than a penny, marking a small but noteworthy adjustment that directly impacts motorists throughout the state.
Oct 01, 20238009 Shares148309 Views
As of this Sunday, October 1, New Jersey's gas tax is set to increase by less than a penny, marking a small but noteworthy adjustment that directly impacts motorists throughout the state. This increase is the result of a 2016 law that was designed to provide vital support for transportation projects across New Jersey.
According to an announcement by Governor Phil Murphy's administration earlier this month, the state's gas tax will see a slight uptick, bringing it to a total of 42.3 cents per gallon. Additionally, the tax on diesel fuel will rise to 49.3 cents per gallon.
The funds generated from this tax increase are directed towards the $16 billion Transportation Trust Fund, which plays a crucial role in financing essential infrastructure initiatives, including road and bridge projects, all aimed at improving the state's transportation network.
This modest increase in the gas tax comes at a time when drivers are grappling with inflation and fluctuating gas prices. As of Thursday, AAA reported that the average price per gallon stood at $3.66. However, experts caution that New Jersey is currently in the midst of hurricane season, which has the potential to cause sudden spikes in gasoline prices.
Comparing the current prices to a year ago, gas costs have risen from $3.46 to the current average, indicating the ongoing challenges faced by motorists. Nonetheless, this remains a significant improvement from the highest-ever recorded price of $5.05 per gallon in June 2022.
During the summer, New Jersey witnessed some of the highest gas prices since December, as reported by GasBuddy.com.
The tax rate is subject to annual adjustments based on a formula specified in state law. In the recent announcement, New Jersey Treasurer Elizabeth Maher Muoio explained that the lower-than-projected demand was influenced by reduced diesel consumption and a slightly higher consumption rate for the current fiscal year when compared to the previous one.
The trajectory of the gas tax has seen fluctuations over the past few years, with two consecutive decreases in 2021 and 2022, amounting to 8.3 cents and 1 cent, respectively, after an initial increase during the COVID-19 pandemic. The tax rate's movement is closely tied to gasoline demand – when demand rises, the tax decreases, and vice versa.
The 2016 law that introduced these changes stipulates that the program must provide approximately $16 billion over eight years for infrastructure projects, with the gas tax rate adjusted to generate around $2 billion annually to sustain this funding commitment.
This incremental rise in the gas tax, though minimal, underscores the ongoing efforts to maintain and improve New Jersey's vital transportation infrastructure.
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