Gas tax to increase by 9.7 cents (to 50.7 cents) due to fewer drivers on road

New Jersey will raise the gas tax by 9.3 cents (to 50.7 cents) on Oct. 1 to compensate for lower consumption of gasoline during the pandemic, the Department of the Treasury announced Friday.

The increase, which treasury officials said was done in consultation with the Legislative Budget and Finance Officer, is not by choice. It is necessary to ensure compliance with the 2016 law that requires a steady stream of revenue to support the state’s Transportation Trust Fund program.

The gas tax requirements came from a 2016 law signed by then-Gov. Chris Christie. The program is required to provide $16 billion over eight years to support critical infrastructure improvements to the state’s roadways and bridges.

In order to ensure the state has the funds necessary to support these projects, the law dictates that the Petroleum Products Gross Receipt tax rate must be adjusted accordingly to generate roughly $2 billion per year.

“As we’ve noted before, any changes in the gas tax rate are dictated by several factors that are beyond the control of the administration,” Treasurer Elizabeth Muoio said. “The law enacted in 2016 contains a specific formula to ensure that revenue is meeting a certain target. When it does not, the gas tax rate has to be adjusted accordingly in order for us to meet our obligation under the law and fully fund the state’s many pressing transportation infrastructure needs.”

The consumption of gasoline declined a total of 38.7% from March to May, while diesel fuel consumption declined 16.5%.