Renewal of Transportation Trust Fund Awaits Murphy’s Decision

Bill includes gas tax of 1.9 cents per gallon; charges EV owners $250 fee

Bill includes gas tax of 1.9 cents per gallon; charges EV owners $250 fee

The bill aimed at renewing the state’s Transportation Trust Fund (TTF) passed both houses of the state legislature on Monday, March 19 and now awaits Gov. Phil Murphy’s signature. The comprehensive legislation includes a 2-cent increase in the gas tax and an additional registration fee for zero emission vehicles. 

An independent state government agency, the TTF was created in 1984 TTF to help maintain and improve New Jersey’s roads, bridges, rail lines, and buses. The reauthorization of the TTF will allocate additional funds to municipalities and counties for road projects, albeit with a slight reduction in funding for NJ Transit and the Department of Transportation.

A fee was added to zero emission vehicle registrations since those car owners don’t pay the gas tax, which is considered a fee for using roads and goes directly into the fund, per reports. The fee applies to both battery electric and hydrogen fuel-cell vehicles,

“At the end of five years, this body will make the largest investment in property tax relief. From 2027 to 2029, it will be the largest amount returned from the Transportation Trust Fund,” State Sen. Assemblyman Paul Sarlo (D-Wood-Ridge) told

The EV fee was calculated using a $267 annual cost calculated by the Eastern Transportation Coalition that the owner of a gas powered vehicle pays annually in federal and state fuel taxes, per the Murphy administration.

The Assembly bill and its Senate companion were introduced on March 4. If the bill is signed into law by Murphy, the TTF will be renewed for another five years beginning July 1. 

The TTF is currently funded from tax of 42.3 cents per gallon of gasoline and 49.3 cents per gallon of diesel, plus a portion of the state’s 6.625% sales tax. Gas tax in the Garden State is the seventh highest in the nation.

New Jersey’s gas tax rate increased by 0.9 cents per gallon Oct.1, 2023 because actual consumption in Fiscal Year 2023 was slightly below projections made the previous August. Taxes on gasoline and diesel increased by 9.3 cents a gallon in 2020 due to the pandemic and funding shortages with people driving less.

The announcement of a possible gas tax hike comes just weeks after tolls went up on the Garden State Parkway and New Jersey Turnpike to help maintain the state’s central toll roads. In addition, New Jersey Transit has proposed increasing bus and rail fares by 15% starting July 1.