The New Jersey legislature on Jan. 11 overwhelmingly approved a ballot measure proposal to amend the state’s constitution to dedicate all motor fuel tax revenue—including the additional petroleum products gross receipts tax—to transportation infrastructure construction and maintenance. New Jersey voters will decide on the measure in the November 2016 general election.
Currently, revenue from the state’s 10.5 cents-per-gallon gas tax is deposited into its Transportation Trust Fund, as is 10.5 cents of the 13.5 cents-per-gallon diesel tax. The petroleum products gross receipts tax, an additional 2.75 percent tax on the gross receipts from the first sale of petroleum products in New Jersey (charged as 4 cents-per-gallon since June 30, 2000), has deposited a minimum of $200 million annually into the state’s Transportation Trust Fund. An analysis of the bill, Assembly Concurrent Resolution 1, estimates that dedicating the entire amount of the petroleum products gross receipts tax will result in a Transportation Trust Fund increase of $15 million per year. The legislation also ensures that any future motor fuel tax increase will be used only for transportation purposes.
The resolution was approved unanimously in the Assembly, and passed with a vote of 35-2 in the Senate.
If new revenue is not generated, New Jersey officials have repeatedly warned that the state would not be able to fund transportation construction projects or debt payments beginning July 1, 2016. Furthermore, additional funds must be raised to match federal funds for the Hudson River tunnel project. Both Democratic and Republican lawmakers released plans Dec. 14, 2015 to increase transportation funding, but did not make any progress on creating new revenue before the 2014-2015 legislative session ended on Jan. 11, 2016. The 2016-2017 legislative session began Jan. 12.