ROADS/BRIDGES: N.J. to raise gas tax by 23 cents in order to address its road and bridge troubles

Jersey residents also will see in a reduction in sales tax, but not until 2017/2018

October 04, 2016
road work sign
road work sign

New Jersey Governor Chris Christie and state Democratic leaders announced late last week they have reached a deal for transportation funding that will raise the state gas tax by 23 cents per gallon, ending a summer-long standoff and statewide construction freeze.

For drivers, the higher gas taxes could come in early October, if the legislature moves on the measure efficiently. It will be offset somewhat by a reduction in the state sales tax from 7% to 6.875% in 2017 and 6.625% percent in 2018.

The sales tax reduction is part of a package of tax cuts lawmakers agreed to in exchange for the first gas tax hike since 1988. The compromise also eliminates the estate tax, eases taxes on retirement income, boosts the Earned Income Tax Credit for the working poor and creates a tax deduction for veterans.

The deal seeks to replenish the state's Transportation Trust Fund, which pays for road and rail projects and is backed by gas taxes. The fund ran out of money for new projects last month.

Gov. Christie this past July halted some 900 road and bridge projects, as well as hundreds of rail projects, to ration what money remained in the trust fund.

Both houses of the State Legislature will be called into a special committee hearing and voting session tomorrow morning. Provided it passes, the gas tax increase would take immediate effect following legislative approval and signature by the Christie.