More News:

June 21, 2016

N.J. lawmakers propose 23-cent per gallon gas tax to fund transportation projects

Offset would be reducing taxes on retirement income, raising tax credits for working poor, eliminating the estate tax and increasing deductions for charitable giving

A bi-partisan mix of New Jersey legislators in both houses have proposed bumping up the state’s gasoline tax by 23 cents a gallon.

The increase would pay for overdue and underfunded transportation infrastructure work on highways, bridges and railways.

New Jersey would be able to fund a $20 billion transportation program over the next 10 years that doubles the annual aid to municipalities to $400 million a year.

The proposed increase would be on top of the existing 14.5 cent-per-gallon tax, which is the second-lowest in the country.

The combined 37.5-cent tax would give New Jersey the seventh highest per-gallon, gas tax rate in the United States. If approved, it would be the first fuel tax hike in 28 years for the Garden State.

AAA says the poor condition of New Jersey roads costs each driver about $600 a year in repairs, a figure that should decline as infrastructure is fixed and upgraded, resulting in vehicles suffering less wear and tear.

Legislators proposing the increase also say the additional gas tax would be offset – in part – by a slew of proposed tax reductions.

Related story: Death and Taxes – Should NJ trade the estate tax for a gas tax?

They include a reduction in the amount of retirement income subject to income taxes, raising tax credits for the working poor, eliminating the estate tax and creating deductions for charitable donations.

While the bill has the support of leading members of both parties, some have criticized the proposal as a shell game.

Gov. Chris Christie has spurred the plan to cut some taxes while raising the fuel tax, but it is not clear if he believes the tax changes go far enough to satisfy him.