⛽ Murphy/lawmakers reportedly reach deal on hiking gas tax

⛽ The increases will replenish the Transportation Trust Fund

⛽ Owners of electric vehicles will also be asked to pay

Gov. Phil Murphy plans to fund New Jersey Transit with a billion-dollar tax hike on New Jersey businesses.

Now, Murphy is moving to fund road and bridge repair by dipping deeper into motorists' wallets.

Legislation will be introduced on Thursday that would hit drivers with another gas tax hike.

Sponsored by Assembly Transportation Committee Chairman Clinton Calabrese, D-Bergen, the legislation would revise the way the state funds the Transportation Trust Fund.

New Jersey Gas Tax Illustration
aaa.com via Canva

The biggest change: A higher gas tax.

There have been rumors of changes to the gas tax for months as Murphy and the legislature face a July 1 deadline for replenishing the TTF.

READ MORE: Bizarre things New Jersey taxes, and things it does not

Without legislative action, the state will lose the power to borrow against the gas tax revenue to pay for road and bridge projects.

Politico is now reporting a deal has been struck to further increase the gas tax 1.9 cents a gallon a year in each of the next five years.

The money would guarantee at least $2 billion per year would be available for state and local infrastructure projects.

New Jersey drivers currently pay the seventh highest gas tax in the nation at 42.3 cents in tax per gallon of gasoline.

TSM Illustration
TSM Illustration

The devil may be in the details

While the Calabrese bill is listed on the agenda for a Thursday hearing, the actual text of the bill has not been made available.

Under the changes to the gas tax implemented by then-Gov. Chris Christie in 2016, the state treasurer meets with the top public financial official from the nonpartisan Office of Legislative Services to ensure the TTF is fully funded.

If there is a shortfall, the gas tax is raised to make up the difference. If there is a surplus, the gas tax is reduced.

Last year, the gas tax was reduced by one cent. In 2020, a sharp drop in fuel sales due to the pandemic necessitated a 9.3 cent increase in the gas tax.

It is unclear how Calabrese's bill will alter the formula or whether it will bet a set increase of 1.9 cents annually.



READ MORE: NJDOT begins massive pothole repair project — What drivers need to know

EV owners will also pay

If you own an electric vehicle, you are currently exempt from the fuel tax if you don't buy gasoline.

The Calabrese bill will change that by establishing a "annual fee for zero-emission vehicles."

Politico reports that EV owners will be charged an initial $250 fee that will increase $10 per year beginning in 2025.

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Gallery Credit: New Jersey 101.5

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