In the fall of 2016, Gov. Chris Christie and the Democratic-controlled Legislature agreed to raise the motor fuels tax 23 cents a gallon to fund road and rail projects in New Jersey.
But because that revenue is dependent on how much gas people buy, they also wanted assurances that they would have enough money to pay for those projects.
They agreed that a three-person committee should review the tax’s performance each year to determine if it’s bringing in enough, too much, or not enough money to pay the bills.
If gas sales are booming and gas tax dollars are flowing into state coffers, then the treasurer could reduce the tax. If sales are slowing and it’s not generating enough money, the treasurer could raise the tax.
That’s what has happened here.
Revenues fell $125 million short of the $2 billion target in the fiscal year that ended in June and $43 million short the year before.
Murphy’s administration announced it needed another 4.3 cents per gallon for the gasoline and diesel fuel taxes to hit their target.
The two tax hikes come after New Jersey enjoyed a long period without any increases. Prior to the 2016 increase, the gas tax had not been increased since 1988.