NJ opts out of climate program that could have raised gas tax 17 cents

New Jersey has opted out of a regional climate program that could have raised state gas taxes by as much as 17 cents per gallon.

New Jersey most recently raised its gas tax by 9 cents in October, to 50.7 cents for regular gas. The diesel fuel tax is another 7 cents higher than that. It was the latest increase following the 2016 state referendum, under then Gov. Chris Christie, that empowered lawmakers to raise the gas tax by nearly 23 cents in exchange for a requirement the additional money go to the state's Transportation Trust Fund.

The 2016 measure also included a formula that requires yearly reviews to ensure New Jersey raises a set amount of money, roughly $2 billion a year — potentially resulting in smaller annual increases. This year's hike was higher than usual, because of decreased travel in the coronavirus pandemic.

Connecticut, Massachusetts, Rhode Island, and the District of Columbia all signed on to the Transportation and Climate Initiative Program, a cap-and-trade initiative that could have also meant $750 million a year in revenue to New Jersey for infrastructure projects. The program was initially proposed by the Georgetown Climate Center for 13 states and the District.

Gov. Phil Murphy said Monday he liked the idea "conceptually" but the "devil's in the details a little bit, and I'm conscious of the sticker shock potentially, because it would require some amount of payment at the gas pump."

Murphy said he was reluctant to burden New Jersey residents with higher gas taxes in an economic crisis spurred by the pandemic and related economic shutdowns.

"To say it's an unusual economic environment is the understatement of the day," Murphy said.

New Jersey and other jurisdictions that declined the program did signal, however, they would continue talks and could sign on for a version of the initiative at a later date.

Murphy had been pressured to support or decline the agreement from groups that are often allies.

Essex County Freeholder Brendan Gill, co-chair of the New Jersey leadership council of the group Elected Officials to Protect America, said earlier this month the issue is an old one taking on new urgency due to the respiratory issues around COVID-19. On Monday, the group said 115 elected officials had signed on to a letter urging Murphy to sign a memorandum of agreement to join the climate program.

“Pollution just from transportation costs lives. It costs billions of dollars and it threatens the safety of our residents,” Gill, who managed Murphy’s 2017 gubernatorial campaign, previously said.

Some environmental groups opposed the proposal, calling the tax regressive and saying the plan doesn’t guarantee emission reductions in high-pollution urban areas.

— with previous reporting by Michael Symons