N.J. gas tax to rise 23 cents a gallon on Nov. 1
Gov. Christie on Friday signed legislation raising New Jersey's gas tax by 23 cents a gallon as part of an eight-year plan to boost investment in roads, bridges, and transit systems.
Gov. Christie on Friday signed legislation raising New Jersey's gas tax by 23 cents a gallon as part of an eight-year plan to boost investment in roads, bridges, and transit systems.
The gas tax hike goes into effect Nov. 1.
The law also includes various tax cuts, including a reduction in the sales tax from 7 percent to 6.625 percent by the time Christie, a Republican, leaves office in January 2018; the elimination of the state's estate tax over the same period of time; and an increase in a tax credit for the working poor, among other provisions.
The law demonstrates "our commitment to providing tax relief for working New Jerseyans of all income levels, senior citizens, military veterans and property owners, while ensuring solid, reliable, state-of-the-art roads, bridges and mass transit systems," Christie said in a statement.
"Over the next eight years, a record $32 billion in state and federal funds will be invested in infrastructure improvements and modernizations in New Jersey," the governor said.
The increase in the gas tax is New Jersey's first since 1988. The tax will rise from 14.5 cents to 37.5 cents per gallon and will raise about $1.2 billion annually, according to the nonpartisan Office of Legislative Services.
The state's fund for transportation projects had been empty since July.
A ballot question next month will ask voters to dedicate all new gas tax revenue to transportation projects.
Business groups praised Christie's decision, saying infrastructure improvements will boost the state's economy.
But the tax cuts will open a $1 billion budget hole by 2021, according to Moody's Investors Service. That means less money for services such as education.
The Wall Street ratings agency said this week that the tax changes were "credit negative" because they will "strain the state's operating budget amid rapidly rising pension contributions and below-average revenue growth."
Moody's said state revenues would have to grow 5 percent annually to cover pension payments and other expenditures. New Jersey has experienced an average of 3 percent revenue growth annually since the recession, according to Moody's.
Lawmakers were close to a gas tax agreement in June, but the Senate refused to agree to a deal struck by Christie and Assembly Speaker Vincent Prieto (D., Hudson), which would have resulted in a greater sales tax cut.
The state Senate last week voted 24-14 in favor of the latest agreement, and the Assembly passed it 45-27.
On Friday, some legislators began discussing an effort to repeal the tax hike almost as soon as Christie had signed it. That seems destined to fail.
"The overtaxed people of New Jersey have demanded that we find another way to fund our transportation needs without taking more out of their pockets," said Sen. Kip Bateman (R., Somerset).
Christie on Friday also repealed an executive order he signed in June that ordered a shutdown of all nonessential transportation projects.
856-779-3846
@AndrewSeidman