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Gov. Phil Murphy. (Photo: Kevin Sanders for New Jersey Globe)

Murphy didn’t know about gas tax increase during budget address

Governor says he learned of 9.3 cent hike a day or two before Friday announcement

By Nikita Biryukov, August 31 2020 2:53 pm

Gov. Phil Murphy said he was unaware of a planned increase to the state’s gas tax when he delivered his revised budget address last Tuesday.

“I believe we announced this on Friday, and I knew of it some time — maybe a day or two — before, I can’t actually recall, but it has nothing to do with the budget,” he said. “It’s not in my control.  I have literally nothing to do with it.”

On Friday, State Treasurer Elizabeth Muoio announced the state would levy an additional 9.3 cent tax on each gallon of gasoline and diesel fuel effective Oct. 1, bringing the total gasoline tax to 50.7 cents and the total diesel fuel tax to 57.7 cents.

The increases are mandated by a law signed as part of an agreement between former Gov. Chris Christie and Democratic legislative leaders in 2016.

That deal saw the state’s sales tax reduced from 7% to 6.625% and eliminated the state’s estate tax in exchange for a 23 cent increase to the gas tax, which is dedicated to the Transportation Trust Fund, which pays into infrastructure improvements in the state and was largely depleted by that point in Christie’s tenure.

The pandemic stopped almost all New Jerseyans from traveling in parts of March, April and May, though traffic has since edged back toward pre-crisis levels in the intervening months. Still, the reduction in driving left gas tax revenues $154 million short of their target for the 2020 fiscal year.

State law requires adjustments to the gas tax to ensure it reaches its funding goals for the TTF, though Murphy suggested he would be open to reexamining that system sometime in the future.

“Am I open-minded at some point down the road to reassessing how it’s calculated? As long as we can keep the Transportation Trust Fund viable,” he said. “And again, the prior administration had allowed it to virtually go bankrupt. The answer is I’m open to viable ways to keep that fully solvent but also unleaven the burden on our residents.”

At the very least, New Jerseyans shouldn’t expect to see any surprise increases to tolls or fares in the near future.

“I’m not sitting on any tolls or taxes, to the best of my knowledge, that we’ve not addressed,” Murphy said.

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