The New Jersey Department of Treasury today announced that the gas tax will decrease 8.3 cents per gallon beginning October 1, 2021. The transportation capital plans remain unchanged for NJDOT (including Local Aid) and NJ Transit.
UTCA worked for language in the 2016 reauthorization of the Transportation Trust Fund that mandates an annual evaluation of the gas tax to ensure the state can provide a $2 billion transportation capital program. Pegging the rate to the size of the capital plan was necessary to avoid the political hurdles that enabled over two decades of neglect and debt that ultimately led to a complete shutdown of our industry in 2016.
Up until 2020, the “true-up” language has produced several small increases to the tax. In 2020 a 9.3 cent increase was necessary due to a pandemic-related decline in consumption. Citing a “swifter than expected economic recovery,” Treasury stated that gasoline and diesel fuel consumption had risen beyond stated projections, requiring under the law the decrease announced earlier today.
This action is not unexpected. UTCA anticipated a 2021 decrease in the tax given the rapid return of drivers and increases in-home deliveries. This provision of the TTF law is working as intended, to guarantee NJ has adequate funding to maintain its vast transportation network without overburdening the driving public.