New Jersey Implements Gas Tax Increase and EV Fees to Fund Transportation Infrastructure

This week, New Jersey implemented increased gas taxes and introduced a new fee for electric vehicles aimed at funding transportation infrastructure. Governor Phil Murphy signed legislation earlier in the year to extend the Transportation Trust Fund for another five years, which was originally established in 1984 and has seen multiple renewals since.

According to Murphy, this move is intended to overhaul and maintain the state’s transportation network, create jobs, and alleviate property tax burdens for local governments.

Under the new law, the Petroleum Products Gross Receipts Tax rate will be adjusted annually based on a revenue target linked to 2016 highway fuel tax collections.

This adjustment translates to nearly a 2 cents per gallon increase in gas prices each year. Additionally, new fees are being imposed on electric vehicle registrations, starting at $250 and increasing annually by $10 until reaching $290 by 2028.

The legislation also authorizes significant funding measures for the Transportation Trust Fund. These include approximately $10.37 billion in appropriations for the State’s Annual Transportation Capital Program from FY 2025 to FY 2029, as well as up to $8.84 billion in bonding authority over the same period. Moreover, about $1.5 billion in pay-as-you-go funding is earmarked for transportation projects.

A recent report from a National Transportation Research Nonprofit highlighted key infrastructure challenges in New Jersey. It revealed that 22% of major roads in the state are in poor or mediocre condition, and 6% of bridges are rated as poor or structurally deficient, with 55% of them being at least 50 years old. Over the past two decades, vehicle travel on New Jersey’s roads has increased by 17%, underscoring the strain on existing infrastructure.

These legislative measures and funding allocations are part of a broader effort to address New Jersey’s infrastructure needs, aiming to improve road and bridge conditions while adapting to the growing demands of a modern transportation system.