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Yes, you read that right. A tax in New Jersey is going down.
The state’s gasoline tax fell 8.3 cents per gallon to 42.4 cents per gallon on Friday. The drop comes after the state hit drivers with a 9.3-cent-per-gallon hike last October to make up for hundreds of millions in lost revenue when drivers stayed home and off the roads during the pandemic. coronavirus.
But fuel consumption in 2021 fell in line with projections from last year, according to the state. This allowed for an adjustment this year.
Lower taxes could facilitate high payments at the pump. The average cost of gasoline in the state is currently $ 3.22 per gallon, up more than $ 1 from $ 2.17 at the same time last year, according to the American Automobile Association. .
Drivers will now pay a tax rate of 42.4 cents per gallon, up from 50.7 cents in the past year. Taxes on diesel drop from 57.7 cents per gallon to 49.4 cents, the state said in August.
The state’s national average tax on gas is 38.19 cents per gallon, according to a July survey by the American Petroleum Institute.
The state has long had one of the lowest gasoline taxes in the country. But the tax has jumped more than 36 cents per gallon since 2016, largely due to a 23 cent per gallon increase to raise money for road and rail projects under former Governor Chris Christie.
The tax now fluctuates based on the amount of gasoline purchased by drivers. But it needs to generate $ 2 billion a year to fund an eight-year $ 16 billion transportation trust fund program launched in 2016.
Governor Phil Murphy increased the tax by 4.3 cents in 2018.
Sal Risalvato, executive director of the New Jersey Gasoline-Convenience-Automotive Association, said the cut could help New Jersey gas stations recoup business they lost to neighboring states.
As a result of the 2016 hike, Risalvato said, New Jersey lost about 400 million gallons each year from 2017 to 2019 to other states.
“With the increase of 9 cents, we started to see people from New Jersey buying gasoline in New York, because it’s cheaper,” he said. “It’ll at least bring us back to balance, and at least some of the gallons we’ve lost over the last year, hopefully we can get them back.”
NJ Advance Media reporter Matt Arco contributed to this report.
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Amanda Hoover can be reached at [email protected]. Follow her on Twitter @amandahoovernj.
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