TRENTON — New Jersey’s current tax rate on gasoline will remain stable for this fiscal year at 41.4 cents per gallon, the State Treasurer announced Wednesday.
The diesel tax will remain at 48.4 cents per gallon, Treasurer Elizabeth Maher Muoio said. Fiscal year 2020 ends next June 30.
“We’re pleased that fuel consumption levels, coupled with our realistic projections last year, have allowed us to avoid an increase in the gas tax rate for this year,” Muoio said.
State law requires the tax to raise about $2 billion a year for eight years, to support the state’s Transportation Trust Fund program and improvements to the state’s roadways and bridges. Since the 2016 law was enacted, the state has distributed a total of $4.34 billion for local, county and state projects, including NJ Transit, according to the treasurer.
Gasoline consumption in New Jersey has continued a multi-year decline, and is expected to go down another 3% this year, the state has estimated. But last year’s 4.3-cent increase that went into effect Oct. 1 helped boost FY 2019 revenue enough to avoid the need for an increase this year. That fiscal year ended June 30.
The state missed the FY 2019 Highway Fuels Revenue Target of $2.073 billion by just $33.4 million, a significantly smaller gap than the previous two-year shortfall of $125.2 million.
The treasury estimates the new FY 2020 Highway Fuels Revenue Target of $1.981 billion can be achieved with the current tax rate.
As a result, the 26.9 cent Petroleum Products Gross Receipts (PPGR) tax rate will remain stable for the coming year. When combined with the motor fuels tax, the total gas tax rate will remain unchanged at 41.4 cents per gallon and the total diesel tax rate will remain unchanged at 48.4 cents per gallon.
Last year’s 4.3-cent rate increase was needed to make up for a combined revenue shortfall of $125.2 million over both FY 2017 and FY 2018, according to the treasurer.