Is New Jersey considering raising the gas tax?


LOW GAS RATES THREATENED: New Jersey’s Transportation Trust Fund is out of money. Will a higher gas tax be used to pay for transportation projects?

By Damien Salamacha |

New Jersey’s Transportation Trust Fund, which provides $1.6 billion a year in state funding for highway, bridge, and mass-transit construction projects, will be nearly $800 million short for the upcoming budget year.

Recent hearings were held by the New Jersey Assembly Transportation Committee to find ways to replenish the state’s Transportation Trust Fund and raise the $1.6 billion needed to meet the state’s annual transportation spending obligations. Among much of the discussion where hints at increasing the state’s gasoline tax.

New Jersey residents enjoy the second lowest gas tax in the nation at 14.5-cents per gallon when adding the 10.5-cent per gallon gas excise tax on retail gas and the 4-cent per gallon petroleum products gross-receipt tax (on top of the 18.4-cents federal tax). Gas is relatively cheap in New Jersey, especially compared to the taxes imposed on gas by the neighboring states of New York (50.6-cents per gallon) and Pennsylvania (41.8-cents per gallon).

A major reason the trust fund is out of money is because capital costs for transportation projects are extremely high. According to the Reason Foundation’s 21st Annual Report on the Performance of State Highway Systems, New Jersey spends $2.02 million per mile of highway, the most of any state.

According to the report, New Jersey’s administrative spending on state highway is the sixth highest in the nation at $44,000 per mile, which is four times the United States average of $10,500. Also contributing to the higher costs are project labor agreements and prevailing wage legislation.

Read the complete story on