Two powerful Democratic senators plan to introduce legislation extending the Transportation Trust Fund (TTF) for another five years through a gradual increase in the gas tax to just under 10 cents per gallon over a five-year period, according to guidelines of the draft legislation obtained by the New Jersey Globe.
Senate President Nicholas Scutari and Budget & Appropriations Committee Chairman Paul Sarlo are proposing a gas tax increase of roughly 1.9 cents annually for the next five years.
The plan also seeks to address parity for electric vehicle motorists who aren’t affected by the gas tax and don’t pay into the TTF.
Scutari and Sarlo are proposing a new annual registration surcharge of $250 for electric vehicles that will increase to $290 by 2029.
“To actualize climate goals of the current administration and to provide a buffer against potential costs from the introduction of a possible federal EV registration fee, it is broadly considered important that a NJ EV registration fee is appreciably less but still relatively close to the annual cost of gas taxes paid by NJ motorists that consume gasoline,” ,” an internal memo stated.
Most of the money to fund the state’s transportation infrastructure system comes from the 42.3 cents per gallon gas tax.
“This source of revenue has functionally declined for years, even before the mass introduction of EVs, due to the full saturation of motorists on the road system (~89% of households already drive in New Jersey), the increasing fuel efficiency of US vehicles, and inflation,” the memo said. “Without additional revenues, the TTF is projected to have a negative cash flow in the tens or hundreds of millions of dollars by 2029.”
The bill authorizes the Transportation Trust Fund Authority to issue up to $8.822 billion in bonds between July 1 and June 30.
POLITICO first reported the proposal for an extra 2 cents per gallon.