Suspend the NJ gas tax? New plan is being formulated as prices rise
With record-high prices for gasoline continuing in New Jersey, a plan is taking shape to reduce and possibly even eliminate the state gas tax for a period of time if prices at the pump continue to go up.
Legislation, A3669, being introduced by Assemblyman Paul Moriarty, D-Gloucester, would reduce the state gas tax by 50% if the average price of a gallon of unleaded regular in the Garden State reaches $4.51, during the months of June, July and August.
If gas prices go as high as $5.01 a gallon during the summer months, the state gas tax would be reduced by 75%, and the tax would be completely suspended if the price of gasoline tops $5.50 a gallon in New Jersey.
The current state gas tax is 42.4 cents a gallon, which means if the average price goes to $4.51 the price would drop by 21 cents a gallon assuming the bill is approved and signed into law.
Right now the average price for a gallon of gas in New Jersey is $4.32.
People need help
“We are looking at reducing the sales tax or eliminating it completely for the summer months, to help people as these prices continue to soar,” Moriarty said. “We recognize that people are having difficulties right now with inflation, with gas prices soaring, we need to do something to help alleviate these rising prices.”
Moriarty said drivers are not the only ones who need relief.
“You have businesses that have fleets of trucks or cars and it adds to the cost of business, and that adds to the cost that consumers pay for goods and services,” he said.
The measure stipulates the state treasurer, in consultation with the Office of the Economist in the Board of Public Utilities, would be required to determine the average retail price per gallon of unleaded regular gas on a monthly basis.
Moriarty stressed the benefits of any reduction or suspension of taxation have to be passed onto consumers in the form of reduced retail prices for gas.
Some people have to drive long distances to work
“We need to help people to be able to get to work, we need to help people that have no other choice or no other alternative but to take their cars,” he said.
Under current state law, all revenues collected under the motor fuel tax and the petroleum products gross receipts tax are deposited into the Transportation Trust Fund to support the state’s transportation system.
He said to offset any reductions in gas tax revenues and petroleum products gross receipts tax revenues that occur as a direct result of this bill, money collected from the state sales tax would be deposited into the Transportation Trust Fund.
Nothing is set in stone
Moriarty stressed the legislation is still taking shape, and changes may be made in the coming weeks.
“All of the details of this plan have to be worked out but I think it’s important that we move forward in helping people,” he said.
Last week Gov. Phil Murphy seemed to rule out a holiday for New Jersey’s gas tax, saying the state’s options are limited, but Murphy did indicate he would like to see costs for gas go down.
The measure is being co-sponsored by Assemblymembers Sadaf Jaffer, D-Somerset, and Yvonne Lopez, D-Middlesex.