Planet Princeton

New NJ Gas Tax Could Go into Effect July 1

The New Jersey Assembly approve a 23-cent per gallon hike for the state’s gas tax early Tuesday morning, along with a one-cent reduction in the state sales tax that would be phased in over 18 months.

If State Sen. President Steve Sweeney posts the bill and it is approved by the Senate, the gas tax increase could take effect as early as Friday. Senators on Tuesday said they were unsure whether they would support the deal Gov. Chris Christie struck with the Assembly.

The sales tax cut was a last-minute addition to a tax plan that has been debated for months. Some of controversial original proposals that were part of the plan, including phasing out the estate tax, were cut and a reduction in the sales tax was added in negotiations with  Christie.

The 1-cent sales tax reduction would cost the state an estimated $1.3 billion in revenue annually. The sales tax would drop to 6.5 percent on Jan. 1, 2017, and drop to 6 percent on Jan. 1, 2018.

The assembly vote was 53-23. Local assembly members Andrew Zwicker and Jack Ciattarelli voted against the plan. Assembly members Reed Gusciora and Liz Muio voted for it.

“This is the first broad-based tax cut for all New Jerseyans since 1994. I think it was needed, necessary,” Christie said of the plan.

The gas tax hike is projected to cost drivers and fliers about $1.4 billion annually. The money would help fund about 2 billion a year  for roads, bridges and rail projects in the state. The state’s Transportation Trust Fund has run out of money and the additional tax would replenish it.

As part of the tax plan, taxes on retirement income would change over four years. Currently a married couple can exclude $20,000 in retirement income from taxes and a single person can exclude $15,000. The threshold would increase to $100,000 for married couples and $75,000 for individuals starting in 2020. Taxpayers with income between $100,000 and $150,000 would become eligible for partial exclusions — 50 percent if their incomes are $100,000 to $125,000 and 25 percent if it is between $125,000 and $150,000, starting in 2021.

Krystal Knapp

Krystal Knapp is the founding editor of Planet Princeton. She can be reached via email at editor AT planetprinceton.com. Send all letters to the editor and press releases to that email address.

  • Tax this

    Actually, I heard most of this money was to be earmarked for light rail projects, not roads, bridges, etc. The whole thing is bogus.

  • Joe

    The tolls collected from the NJ Turnpike and the GS Parkway are dedicated to those roads, their maintenance, upkeep, improvements and all their employees. There’s still a shortfall for all the other non toll roads.

  • Don’t tolls already pay for those major roads and bridges?

  • South where? I’d rather go west.

  • George Copeland

    Excluding the removal of or increase of the estate tax threshold from the gas tax was touted as insignificant. Why then continue it at the now unrealistic level, the lowest in the Country ($675,000)? This condition has undoubtedly contributed to the exodus of many New Jersey residents and the loss of tax revenues from sales and income taxes. Note the State population distribution is aging (Baby Boomers) consistent with the nation and will likely exacerbate the situation.

  • PrincetonResident

    It was reported on WNYC today that NJ spends 3x what other states do, per mile, to repair roads. It seems our money is not being spent well.

  • Robert Dana

    The State has more than enough tax revenue. It is inefficient and corrupt.

  • Robert Dana

    Incredible. We finally get the benefit of lower gas prices and the state government takes an action that pretty much negates it. $0.23 a gallon is a huge amount.

    The middle class can not get ahead.

  • Sftware

    Get out of NJ while you can. I am leaving in two months for the south with better pay and 65% reduction in taxes. Oh yeah building on your own land does not need 20 permits, 10 inspectors and a council to approve.

  • Joe

    The TTF would go broke July 1 unless the gas tax was raised. They had to enact the gas tax immediately due to the TTF’s imminent demise. Do you think roads, bridges and the infrastructure are free or cheap to maintain? I hate paying more taxes but I also hate being on a collapsing bridge.

  • bigpicture

    NJ taxes are undeniably one of the highest in the country. Talented people are leaving in droves because living in this state is too expensive. The last thing we need is another tax.
    In typical corrupt political fashion, the tax would take effect immediately, but the minuscule sales tax relief would take 2 years to go in effect. By that time, we’ll forget the promise; “can’t lower the sales tax because we need the money.”
    NJ spends more money per road-mile than any other state (http://www.nj.com/news/index.ssf/2013/07/jersey_highway_spending_ranked_highest_in_nation_despite_fourth-worst_roads_report_says.html) “New Jersey, with 3,333 miles of state highways, spends 8.4 times more than the national per-mile average,” the report states. I understand NJ is heavily populated, but with the existing tolls, sales tax, and fees the problem isn’t money; it is mismanagement and corruption.

    I have no illusions that this madness will end and I’m doing everything I can to extract myself from this cesspool!

  • Blake Cash

    A tax reduction of one cent takes two years, a tax increase of twenty three cents takes a few days. Sounds like New Jersey.

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