UPDATE- MARCH 28: New Jersey Gov. Phil Murphy (D) approved legislation March 28 that increases the state gas tax and phases-in a new $290 electric vehicle registration fee.

“New Jersey sits at the heart of one of the busiest stretches of commerce in the entire world,” said Governor Phil Murphy. “Whether it’s trying to get home to their families after a long day or shipping critical goods to keep our economy humming, our residents and our businesses depend on the strength of our transportation system to get where they need to go. This legislation will ensure we deliver for them by enabling us to rebuild and maintain our entire transportation system, while creating thousands of good-paying jobs in the years to come and easing the burden of property taxes by offsetting these costs for local governments.”

Read the governor’s full press release here.

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What happened: New Jersey lawmakers approved legislation March 18 that increases the state gas tax and phases-in a new $290 electric vehicle registration fee.

Why it matters: The state’s Transportation Trust Fund was set to expire June 30. The bill renews the fund and authorizes a $10.367 billion capital program from Fiscal Year (FY) 2025 through FY 2029, with bonding capacity up to $15.6 billion. The legislation gradually increases the gas tax over the next five years at an amount that would ensure the capital program is fully funded. The tax will continue to be set annually by the State Treasurer and is expected to increase approximately 2 cents-per-gallon annually.

If approved, New Jersey would be the first northeastern state with a Democratic government trifecta to approve an electric vehicle registration fee. In 2023, Gov. Phil Murphy (D) pledged to require all new vehicle sales be zero-emission or plug-in hybrid electric models by 2035. To-date 35 states have enacted an electric vehicle registration fee.

What’s next: Gov. Murphy has 45 days to sign or veto the bill, after which it automatically becomes law.

Visit the ARTBA-TIAC State Legislation Dashboard for legislative updates.