A classic New Jersey-ism states Jersey girls pump their fists, but don’t pump gas.Another fact of life in the Garden State has been traditionally low gasoline taxes. While Jersey girls won’t have to learn to pump gas, they will have to pay a LOT more for that fact is not going to change, New Jersey IS going to see a dramatic rise in the price of gas in the very near future. Governor Christie and the Democratic leaders of the State Legislature reached an agreement to raise per gallon taxes on gasoline from $0.145 to $0.375, adding 23 cents per gallon when you fill up your tank. This more than doubles the existing taxes.
In exchange, there is some good news for New Jersey residents. The New Jersey sales tax will drop from 7% to 6.625% over the next two years; and will totally eliminate the New Jersey Estate Tax in 2018. The Earned Income Tax Credit will go up, and there would be additional tax breaks for Veterans and retirement income.
The most important factor behind the increased gasoline tax was New Jersey’s aging and crumbling transportation infrastructure. The State needs to replace, repair, and maintain bridges, roads, highways and tunnels, but the New Jersey Transportation Trust Fund is literally broke. The State suspended ALL transportation infrastructure projects earlier this year because it had no money. This deal would provide money to rebuild, but you will be reminded of that fact each and every time you fill up! At least your children won’t have to pay taxes to New Jersey if you leave them anything.
The Governor and Legislative leaders have been debating various deals and negotiating a settlement since the spring. Everyone knew something had to be done, but it took time to work out a deal they could live with. The proposal still needs to be passed by the State Legislature, but there appears to be enough support to do so.
At least Jersey girls can still pump their fists.
(This article was written in a deal announced by Governor Christie released on September 30, 2016 disclosing a 23-cent increase to gas, while working to cut the sales tax and eliminate the estate tax.)