New Jersey’s gas tax rate will decrease by 8.3 cents per gallon beginning Oct.1, the state's treasury department announced Tuesday.
According to the New Jersey Treasury, after a review of fuel consumption statistics and consultation with the Legislative Budget and Finance Officer, the gas tax rate will decrease in accordance with the 2016 law that requires a steady stream of revenue to support the State’s Transportation Trust Fund (TTF) program.
The “gas tax” or the “highway fuels tax” is actually comprised of two separate taxes on gasoline and diesel fuel - the Motor Fuels tax and the Petroleum Products Gross Receipts (PPGR) tax.
Under the formula outlined in the 2016 law, the PPGR tax rate will decrease on Oct. 1, from 40.2 cents to 31.9 cents for gasoline and from 44.2 cents to 35.9 cents for diesel fuel. In addition to 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 be 42.4 cents and diesel fuel will be 49.4 cents.
“Because actual consumption in Fiscal Year 2021 was so closely in line with our projections made last August, coupled with the fact that consumption in the current fiscal year is projected to be above last fiscal year’s levels, our analysis of the formula dictates an 8.3 cent decrease this coming October,” State Treasurer Elizabeth Maher Muoio said in a statement.
Under the 2016 law enacted during former governor Chris Christie's administration, New Jersey’s TTF program is required to provide $16 billion over eight years to support infrastructure improvements to the state’s roadways and bridges. The law dictates that the Petroleum Products Gross Receipt tax rate must be adjusted accordingly to generate roughly $2 billion per year in order to have the necessary funds for these projects.
“We are pleased that this dedicated funding stream continues to provide billions of dollars across the state to support our critical transportation infrastructure needs," Muoio went on to say.