New Jersey will lower its gas tax rate by 8.3 cents, effective October 1, the New Jersey Treasury Department announced Tuesday.
A 2016 law requiring revenue for the State’s Transportation Trust Fund (TTF) program rose the tax rate, but since the 2021 revenue streams and gas consumption are project to be higher than last year, the Treasury has declared there can be a gas tax decrease.
“We are pleased that this dedicated funding stream continues to provide billions of dollars across the state to support our critical transportation infrastructure needs,” said State Treasurer Elizabeth Maher Muoio.
The 2016 law, signed by Democrat Governor Phil Murphy, enacted the Motor Fuels tax and the Petroleum Products Gross Receipts (PPGR) tax on gasoline and diesel fuel. The additional funds would be directed to the TTF, which is expected to provide $16 billion over eight years to support infrastructure upgrades to the state’s roadways and bridges. In order to supply the money, the gas taxes needed to bring in $2 billion every year.
As projected fuel consumption is expected to bring in more than the amount of revenue necessary to reach the levels set in 2016, the gas taxes could be adjusted lower.
The PPGR tax rate will decrease on October 1, 2021 from 40.2 cents to 31.9 cents for gasoline and from 44.2 cents to 35.9 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 42.4 cents and 49.4 cents, respectively.