Murphy frustrated at higher gas tax but says it’s needed
VINELAND, N.J. (AP) — New Jersey Gov. Phil Murphy said Friday that though he doesn’t like raising “any tax,” the recently announced hike of more than 10 percent in the gas tax is necessary to keep the state’s transportation trust fund viable.
Murphy, a first-term Democratic governor, spoke after a ribbon-cutting at a new school in Vineland on Friday, a day after his administration announced the gas tax would climb by 4.3 cents per gallon to 41.4 cents.
He cast blame for the higher rate on the 2016 bipartisan law enacted under his predecessor, Republican Chris Christie, though he didn’t name the former governor specifically.
“I’m frustrated like a lot of things we’ve inherited, in this case projections on fuel consumption, that were not realistic,” he said. “You never like raising any tax but this is the formula, and if we’re going to keep the funding at the level that we need to keep it at to fund the projects in the transportation trust fund, then we have no choice.”
Murphy’s administration announced the increase on Thursday.
The 2016 law calls for a steady revenue stream to support a $2 billion a year trust fund for road, bridge and other transportation work. The law, which was widely lobbied for, including from labor and business groups, bumped up the fund from $1.6 billion.
To do that the measure calls for the treasurer and legislative officials to review revenue and set the tax rate to reach the target figure. This year officials say they concluded the rate would have to climb by 4.3 cents.
The Treasury added that Christie overestimated fuel consumption last year and failed to raise the rate 1.7 cents. Had that happened, then the rate would climb 2.6 cents this year, according to the Treasury.
This will be the second time since 2016 the gas tax has gone up. It reflects nearly a tripling of the rate that stood at 14.5 cents per gallon for nearly three decades.
Treasury officials say legislative action is required to change the formula, and they add that the change must secure reliable annual revenues for the trust fund, which supports capital projects across the state.
Republican state Sen. Kip Bateman said he will introduce legislation to do away with the potential for automated increases under the 2016 law. Murphy said he hadn’t reviewed the proposal and stressed keeping transportation capital projects funded.
“We have to keep the transportation trust fund funded,” Murphy said It was allowed to go virtually bankrupt. It was as you know it was the ultimate can -getting-kicked-down-the-road and I was as a candidate — even when it wasn’t popular —I said we’re going to have to take some medicine here and raise the gas tax to fund this.”
The conservative Tax Foundation recently published 2018 data that showed New Jersey’s new gas tax would make it the ninth highest in the nation, from No. 11 before the hike.