N.J. set to hike gas tax by 23 cents a gallon

Posted at 9:59 AM, Oct 05, 2016
and last updated 2016-10-05 09:59:01-04

New Jersey drivers are about to see their state’s gas tax nearly triple. But they’ll still pay less than their neighbors.

The state legislature is expected to vote Wednesday to hike the gas tax by 23 cents a gallon, the first increase since 1988, to pay for road and transit improvements. At the same time, New Jersey will trim its sales tax, increase breaks for retirees and the working poor and eventually eliminate its estate tax.

New Jersey state gas taxes currently total 14.5 cents a gallon. Only Alaska pays less, according to the American Petroleum Institute. Even after the increase, New Jersey drivers will pay less in state gas taxes than those in Pennsylvania, at 50.5 cents a gallon, and New York, at 43.4 cents.

New Jersey drivers also pay the second lowest average gas price in the nation, according to AAA — just over $2 a gallon, higher only than Texas. That’s despite a state law requiring gas pumps to be full service rather than self-serve.

The tax increase will bring New Jersey gas prices roughly in line with the national average of $2.23 a gallon.

Republican Governor Chris Christie and leaders of the Democratic-controlled legislature struck a deal on the increase last week. The increase takes effect as soon as Christie signs it, while the other tax cuts will be phased in.

The state’s transportation trust fund had essentially run out of money this summer.

Drivers nationwide also pay a federal gas tax of 18.4 cents per gallon. It hasn’t been raised since 1993.