New Jersey’s gas tax will increase by 4.2 cents per gallon beginning January 1, under a statutory formula tied to funding requirements for the state’s Transportation Trust Fund (TTF).
The increase is triggered by provisions enacted during the Christie administration as part of a 2016 transportation funding package. Under that law, the Transportation Trust Fund is required to reach a specific annual revenue target, which gradually increases each year through 2029, when it is scheduled to reach $2.366 billion.
State officials said the upcoming adjustment is the result of both the rising statutory funding target and lower-than-expected fuel consumption.
“Due to the new statutory target, and because actual consumption has trended below last fiscal year’s levels, our analysis of the new formula dictates a 4.2 cent increase this coming January,” State Treasurer Elizabeth Maher Muoio said in a statement. “We emphasize that this dedicated funding stream continues to provide billions of dollars across the State to support our critical transportation infrastructure needs.”
The gas tax adjustment mechanism allows rates to rise or fall annually based on whether revenue projections meet the required funding level for the Transportation Trust Fund. The fund finances highway, bridge, and transit projects across New Jersey.
Since the 2016 legislation took effect, New Jersey’s gas tax has increased significantly. Prior to that year, the state had one of the lowest gasoline taxes in the nation. Today, New Jersey ranks among the states with the highest gas taxes.
The Transportation Trust Fund has faced longstanding financial challenges. In previous years, the state relied heavily on borrowing to finance transportation projects, which led to concerns about debt levels and the sustainability of the fund. The 2016 deal aimed to stabilize transportation funding by increasing gas taxes while setting annual revenue benchmarks.
According to transportation cost analyses, New Jersey ranks near the bottom nationally in highway cost-effectiveness, with maintenance expenses reported at more than $1 million per mile. Comparable costs in states such as New York, Florida, and Massachusetts have been reported at significantly lower levels.