Who said taxes only go up in New Jersey?
On Monday, the state Department of the Treasury announced the gas tax actually will go down. Not much. Just a penny. But that’s better than an increase.
The decrease will take place Oct. 1
The tax, of course, is mandated to be reviewed annually to ensure that it is properly funding the Transportation Trust Fund, which is used for infrastructure projects. In other words, if a lot of gas is being sold, it goes down. If it isn’t, it goes up.
The Treasury, after a thorough review of fuel consumption statistics and consultation with the legislative budget and finance officer, said the rate should go down.
“Because actual consumption in Fiscal Year 2022 was moderately above our projections made last August, and consumption in the current fiscal year is projected to be slightly above last fiscal year’s levels, our analysis of the formula dictates a 1.0 cent decrease this coming October,” Treasurer Elizabeth Maher Muoio said.
“We are pleased that this dedicated funding stream continues to provide billions of dollars across the state to support our critical transportation infrastructure needs.”
Under the 2016 law (Chapter 57) enacted prior to Gov. Phil Murphy’s administration, New Jersey’s TTF program is required to provide approximately $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.
What is generally called the “gas tax” or the “highway fuels tax” is actually two separate taxes on gasoline and diesel fuel: The Motor Fuels tax and the Petroleum Products Gross Receipts tax.
Under the formula explicitly outlined in the 2016 law, the PPGR tax rate will decrease Oct. 1 from 31.9 cents to 30.9 cents for gasoline and from 35.9 cents to 34.9 cents for diesel fuel. When combined with the Motor Fuels Tax, which is fixed at 10.5 cents for gasoline and 13.5 cents for diesel fuel, the total tax rates that motorists will pay for gasoline and diesel fuel will be 41.4 cents and 48.4 cents, respectively.