Credit: (AP Photo/Julio Cortez, File)For years, New Jersey motorists were charged one of the nation’s lowest gas-tax rates as governors and lawmakers from both parties chose to finance a significant share of the state’s transportation-infrastructure spending with borrowed money.
That all changed in 2016, when the per-gallon rate was increased in one shot from 14.5 cents to 37.1 cents.
At the time, the state’s Transportation Trust Fund, which is supported by the gas tax, had run dry, and the Democratic-controlled Legislature was at odds with then-Gov. Chris Christie, a Republican, over what to do next.
They eventually struck a compromise that raised the gas tax by 22.6 cents. It also renewed the TTF for another eight years as part of a broader $16 billion transportation-spending initiative. Other tax policy changes made as part of that compromise included a reduction of the state sales tax and a phaseout of the estate tax.
But largely overlooked at the time was language that lawmakers inserted into the TTF renewal law that allowed for additional — automatic — gas-tax adjustments to occur annually if a set amount known as the “Highway Fuels Revenue Target” is not met.
Under that language, each year in mid-August the state treasurer must meet with the top budget official from the nonpartisan Office of Legislative Services to determine whether the current rate is generating enough revenue to maintain the roughly $2 billion that’s needed annually to support planned trust-fund spending.
— Graphics by Genesis Obando
