Despite tax hike, NJ gas is still a bargain (Analysis)

Despite lingering resentment over the gas tax hike passed in 2016, fuel costs in New Jersey have remained surprisingly low when compared to most other states. In fact, gasoline prices in New Jersey don’t even make the top 10 most expensive places to buy gas, despite having the eighth-highest gas tax in the U.S. according to Kiplinger's.

New Jersey’s gas tax stands at 41.4 cents per gallon. That includes the 23 cents from 2016 and another 4.3 cents added on to that in 2018 because gasoline sales were not producing the projected revenue. A clause in the 2016 law signed by then-governor Chris Christie allows for an annual adjustment of the gas tax if revenues are lagging. Gov. Phil Murphy’s treasurer, Liz Muoio, was hopeful another increase would not be needed this year, but left open the possibility.

Taxes make up approximately a quarter of the cost of a gallon of gas in New Jersey. The federal tax is 18.4 cents per gallon. Combined with the Jersey tax, you pay 59.4 cents in tax for every gallon. The average state tax for gasoline is just over 33 cents per gallon.

For years, New Jersey had among the lowest gas taxes in the nation. It was a small comfort for a state that is overburdened with the highest property taxes in the nation. It was also a boost to gas stations near the Pennsylvania and New York borders, where the higher gas taxes made NJ gas a bargain.

Pennsylvania still has the highest state gas tax at 58.7 cents per gallon and New York is just barely above New Jersey at 44.3 cents, but the price difference at the pumps is often so small it doesn’t pay to cross the river for a fill-up. Sal Risalvato, executive director of the New Jersey Gasoline, Convenience Store, Automotive Association, says border stations have seen a drop in revenue due to the increased tax in New Jersey.

However, as the summer driving season arrives, New Jersey gas is still a relative bargain. According to AAA, the most expensive gas is in California, which averages over $4 per gallon. Hawaii, Washington state, Nevada, Alaska, Idaho, Utah, Arizona, and Pennsylvania round out the top ten for gas prices all over $3.00 per gallon. New Jersey comes in at No.  15, cheaper than both Pennsylvania and New York.

Top 10 Highest Gas Taxes by State **

10. Connecticut: .37
11. Michigan: .38
12. New Jersey: .41
13. Florida: .42
14. Indiana: .43
15. New York .44
16. Hawaii: .46
17. Washington: .49
18. California: .54
19. Pennsylvania .59

**Kiplinger's

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