Big cut coming to NJ’s gas tax? A new plan has been introduced

If New Jersey's gas tax is going to keep rising in the face of declining fuel demand, what's going to happen when a good chunk of the state is reliant on electric vehicles over gas-powered cars?

New legislation introduced in Trenton aims to significantly reduce the state's gas tax, which is utilized to replenish the state's Transportation Trust Fund for road projects.

The legislation, which has a version in the Senate and in the Assembly, also calls for an addition to the annual registration fee for electric vehicles, to help put a dent in the funds that may be lost by a lower tax on motorists at the pump.

According to New Jersey Globe, which first reported the story on Thursday, the lawmakers behind the legislation are seeking a 33% cut in the state's gas tax.

To go along with its other proposed moves, the bill would also authorize the Department of Transportation to conduct an "alternative revenue feasibility study."

Gov. Phil Murphy has plans to completely phase out the sale of new gas-powered vehicles by 2035. By 2027, electric vehicles must account for at least 51% of new vehicles sales in New Jersey.

A state law from 2016 requires New Jersey to collect roughly $2 billion in gas tax funds per year to keep the TTF afloat. If actual fuel consumption doesn't match projections, the state's gas tax rate has to move.

On Oct. 1, the per-gallon tax on gasoline in New Jersey inched up by less than a cent. The gas tax had declined in the two years prior.

The new legislation is backed by five Democrats in the Assembly and two Democrats in the Senate.

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