Americas

Gas Tax Spikes in N.J. Because of Pandemic’s Impact

Motorists in New Jersey began reaching deeper into their wallets on Thursday to fill their gas tanks as the state’s fuel tax rose by more than 9 cents a gallon to the nation’s fourth-highest rate — a spike linked to a steep decline in traffic during the pandemic.

Drivers in New Jersey purchased nearly 40 percent less gas between March and May as businesses and schools closed and more people began working from home.

That revenue loss chewed into funds the state was required by law to set aside to pay for improvements to rails, roads and bridges and, in turn, mandated a 9.3-cent tax increase, state officials say. The new rate took effect on Thursday.

It is the second major jump in gasoline taxes since 2016 in a state once known for its bargain fuel prices, which lured drivers across the border from New York. And it comes on the heels of major increases in tolls on the state’s two main highways.

“I don’t like it,” said Hany Hannu, who works in a parking garage and was filling up at a BP in Jersey City. “I have rent, three children and first the tolls go up, now this.”

The state’s treasurer, Elizabeth Maher Muoio, said that the state had no flexibility to deviate from a funding formula that was enacted as part of a 2016 law adopted under former Gov. Chris Christie.

“The gas tax rate has to be adjusted accordingly in order for us to meet our obligation under the law and fully fund the state’s many pressing transportation infrastructure needs,” Ms. Muoio said in a statement when the gas tax increase was announced in August.

In 2016, following a contentious battle that brought transportation projects to a halt for months, Mr. Christie, a Republican, agreed to raise the gas tax by 23 cents a gallon to replenish the depleted Transportation Trust Fund, which the state uses to repair and improve roads and bridges.

As part of that deal, lawmakers also required that about $2 billion in gas taxes be set aside annually for the trust fund — a threshold that was harder to meet this year during a lockdown imposed to stop the spread of the coronavirus.

The same funding formula led to a 4.3 cent increase in gas taxes in 2018.

The tax on a gallon of gas purchased in New Jersey is now 50.7 cents, behind only California, Pennsylvania and Illinois.

In California, motorists pay 62.47 cents per gallon; Alaska has the country’s lowest gas tax, 13.77 cents per gallon.

In New Jersey, the increase in the gas tax was part of a double whammy for drivers: Less than a month ago, tolls climbed by 36 percent on the New Jersey Turnpike, 27 percent on the Garden State Parkway and 37 percent on the Atlantic City Expressway.

Jeff Tittel, the director of the New Jersey Sierra Club, said the decline in car usage had the potential to lead to a reduction in pollution.

But he said the revenue generated by the toll increases should be used to offset pandemic-related losses in fuel taxes, not to expand highways.

“We need to move forward with clean vehicles because the gas tax will only continue to rise,” Mr. Tittel said in a statement. “The people have shown that we want cleaner fuels and a greener economy. Now we need to put the pressure on our elected officials to make it happen.”

Kevin Armstrong contributed reporting.

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